If you have spent any time in Chicago in the last 100 years, the name Dominick’s is synonymous to you with grocery shopping. Dominick DiMatteo started the chain in 1918, which eventually expanded into a 130 store empire all over northeast Illinois. Dominick’s was among the very first stores anywhere in the United States to introduce the concept of the SuperMarket—offering a deli, meat counter, seafood counter, florist, et cetera—in one building. Dominick’s is a well-known Chicago business success story.

Coming soon to a Dominick’s near you—something else.

Until now. The parent company, Safeway, has lost $14 million on the chain and has had enough. All remaining 72 stores will close or be sold to other chains. Dominick’s will now be a memory, starting in early 2014.

Dominick’s traditional competitor, Jewel, is owned by Supervalu and likely owns a supermarket chain near you, if you have one. Jewel has almost 180 stores still in operation, and while Jewel seems to be maintaining some income, Supervalu overall is seeing declining sales.

So it must be tough to operate a supermarket in Chicago, right?

You might think so, if you did not look at where people are shopping. Fifteen years or so ago, you would be shopping at either Dominick’s or Jewel (or, if you’re from the Southwest side, “Jewel’s”) because there was little choice. Small markets still existed, but they had little volume with distribution and costs were much higher than the big guys.

But since then, Wal-Mart arrived in the Chicago suburbs, followed closely by Target. Within years, an explosion of competitors has arrived—Trader Joe’s, Pete’s, Valley, Caputo’s, and Mariano’s; the last is run by former Dominick’s CEO Bob Mariano, who was fired when Safeway took over the chain. Mariano was now free to start his own chain of stores, run the way he thought they should be run based on years of lessons learned at Dominick’s. Mariano’s is part of the Roundy’s network.

There are other, local stores as well that have one or only two locations around Chicago. All these newcomers have a wide selection of good that reflect Chicago and its suburbs well: a serious selection of meats and seafood, fresh produce, and thousands of ethnic foods ranging from Polish to Mexican to Italian to Indian as well as every other Chicago-area ethnic group. Stores are clean, brightly lit, with competitive prices, and in accessible locations.

One other thing they have in common is that all these stores are incredibly successful. In fact, some of them are opening dozens of new locations all over the area. Some of them, interestingly, are open within a mile or two of a competitor and both are doing handsomely.

And yes, there is one more thing these new powerhouses have in common: they don’t use union employees.

There, friends, is the critical difference. Jewel and Dominick’s are closed shops—to work there, you must be members of the United Food and Commercial Workers local 881. The UFCW ensures that their members are paid top dollar for the part-time or full-time help they employ.

Buy a cartload of groceries at Pete’s: $125. Buy the same stuff at Jewel or Dominick’s: $175. The difference is that hourly rate multiplied by all the employees. Those costs are passed on to you, the shopper.

The new stores are non-union, pay their employees about the same, net per hour: the UFCW reports a dues average of $209.29 per employee per year. The union guys get $4 more per week, but pay that right back in dues. The non-union employees make a little less each hour, but pay nothing back in dues.

This is why UFCW membership nationally is dropping like a plane with no wings.

But the non-union shops are successful, passing on their lower costs to the shopper. Go figure.

Dominick’s is dead, and Chicagoans are shocked to lose an iconic member of their childhood history. Jewel is struggling, changing its marketing, cancelling its frequent shopper program, and halting some popular services and product offerings. Ultimately, the union is to blame.

The Czar of Muscovy

Божію Поспѣшествующею Милостію Мы, Дима Грозный Императоръ и Самодержецъ Всероссiйскiй, цѣсарь Московскiй. The Czar was born in the steppes of Russia in 1267, and was cheated out of total control of all Russia upon the death of Boris Mikhailovich, who replaced Alexander Yaroslav Nevsky in 1263. However, in 1283, our Czar was passed over due to a clerical error and the rule of all Russia went to his second cousin Daniil (Даниил Александрович), whom Czar still resents. As a half-hearted apology, the Czar was awarded control over Muscovy, inconveniently located 5,000 miles away just outside Chicago. He now spends his time seething about this and writing about other stuff that bothers him.