Dominick's to Close 12 Stores Company Calls Decision Difficult but Necessary Step in Rebuilding Strategy

    CHICAGO, Jan. 12 /PRNewswire-FirstCall/ -- Dominick's announced today that
 it will close 12 underperforming grocery stores.  The eight suburban and four
 Chicago locations will close on March 13, 2004.  "Today's announcement marks a
 difficult but necessary step toward a better Dominick's for Chicagoland," said
 Randall Onstead, President of Dominick's.  "Closing these stores will make
 Dominick's healthier and allow us to focus on growing the business and
 bringing new products and services to consumers," Onstead said.
     Safeway Inc., the parent company of Dominick's, will record a $50 million
 to $55 million pre-tax charge for lease exit costs in its first quarter 2004
 financial results related to these store closures.  The elimination of
 operating losses from the closed stores will benefit earnings immediately and
 was already contemplated in the company's 2004 guidance.
     Under terms of labor agreements with the United Food and Commercial
 Workers union locals, most employees will have the opportunity to seek a
 position at another store. The company anticipates sales transfer from closed
 stores to other Dominick's locations in the same area thereby creating
 additional employment opportunities in those stores.  Dominick's will be
 working closely with employees to ease their transition.  "We are concerned
 for the well-being of our employees and we're taking every reasonable step we
 can to provide them continued employment within Dominick's," said Onstead,
 adding that most employees are eligible to receive severance pay if they
 choose to leave the company.
     To help maintain its customer base and to inform affected consumers,
 Dominick's is undertaking a comprehensive marketing and information campaign
 via direct mail, advertising and in-store materials in connection with the
 closings.  Customers in areas affected by store closings will be informed of
 other Dominick's locations.  Customers of Dominick's pharmacies in stores that
 are closing will be receiving letters providing information on the locations
 of other nearby Dominick's pharmacies.
     Addresses of Dominick's stores to close in the Chicagoland area:
      -- 3250 W. 87th Street      Chicago            60652
      -- 4014 W. Lawrence         Chicago            60630
      -- 3649 N. Central          Chicago            60634
      -- 7050 S. Pulaski Rd.      Chicago            60629
      -- 250 S. Randall Rd.       Elgin              60123
      -- 1440 Irving Park Rd.     Hanover Park       60103
      -- 1919 Skokie Valley Rd.   Highland Park      60035
      -- 5556 W. 159th St.        Oak Forest         60452
      -- 11024 S. Cicero Ave.     Oak Lawn           60453
      -- 1241 Rand Rd.            Prospect Hts.      60070
      -- 2855 Kirchoff Rd         Rolling Meadows    60008
      -- 600 W. Liberty           Wauconda           60084
     This press release contains certain forward-looking statements within the
 meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
 Securities Exchange Act of 1934.  Such statements relate to, among other
 things, business trends, pre-tax charges, and severance and buyout costs and
 are indicated by words or phrases such as "expects," "anticipates" and similar
 words or phrases.  These statements are based on Safeway's current plans and
 expectations and involve risks and uncertainties which are, in many instances,
 beyond our control, including general business and economic conditions,
 competitive factors, financial condition or business over time, or unfavorable
 legislative, regulatory or judicial developments that could cause actual
 events and results to vary significantly from those included in or
 contemplated by such statements.  The company undertakes no obligation to
 update forward-looking statements to reflect developments or information
 obtained after the date hereof and disclaims any obligation to do so.  Please
 refer to Safeway's reports and filings with the Securities and Exchange
 Commission for a further discussion of these risks and uncertainties.

SOURCE Dominick's

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