US grocery giant Safeway Inc is to sell its Chicago-based Dominick's supermarket chain after staff refused to take pay cuts (Retail Week, November 15).
Safeway said that it could not continue to run the chain unless staff made concessions on new contract agreements.
Employees at 113-strong Dominick's threatened to strike, but came to an agreement - unsatisfactory for Safeway in the long term - on Sunday, when 9,000 workers signed eight-month contracts without taking pay cuts.
Safeway will now seek a buyer for the chain, which it bought in 1998 for US$1.2 billion (£770 million) as well as taking on US$646 million (£414 million) of debt.
The grocer plans to improve the business prior to a sale and is to focus on better merchandise. Potential buyers of Dominick's include Kroger and Supervalu, but US analysts believe that Safeway will get considerably less than it originally paid.
Dominick's is the number two grocer in the Chicago area.
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