Merchandising Features / Trend Features

Not Just Whistling Dixie

March 6, 2012
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KEY POINTS


Winn-Dixie is positioning for growth following its merger with BI-LO LLC.


A new “transformational” format features enhanced fresh departments.


Sustained improvement still is crucial for success.

The last few years have been very eventful for Winn-Dixie Stores Inc.

In 2005, the Jacksonville, Fla.-based supermarket operator filed for Chapter 11 bankruptcy protection, emerging in November 2006.

Then the company, which had steadily slashed its locations from more than 900 in 2005 to about 480 today, announced in December that it was merging with Greenville, S.C.-based grocer BI-LO LLC. The joint organization will have approximately 630 grocery stores and 63,000 employees in eight states throughout the Southeastern U.S.

Winn-Dixie, which has outlets in Florida, Alabama, Louisiana, Georgia and Mississippi, will operate as a separate company following the merger.

Among its ongoing activities is the rollout of Winn-Dixie “transformational” state-of-the art stores that the retailer says are designed to make shopping easy and fun.

Elements include international cheese shops with cheese specialists and free samples; Wi-Fi cafes with free coffee and comfortable seating; and on-site wine stewards and sushi chefs.

The outlets also emphasize fresh items, such as locally grown produce and ready-to-eat meals. Eight stores are operating and 17 are expected to be remodeled in the transformational format by the end of fiscal 2012 in June.

Among the transformational locations are Margate Fla., Miami, Mobil, Ala., and Port Charlotte, Fla., where stores also have expanded produce departments and expansive delis where experienced chefs direct preparation of a wide variety of foods and meal solutions.

Deli elements include seven varieties of chicken wings; a barbecue bar; a carving station with fresh fish and prime rib; wood burning rotisserie; and a custom sandwich and sub shop.

There also are enhanced meat and seafood departments, and expanded bakeries featuring a large selection of specialty desserts, pastries, made-to-order cakes and freshly baked bread.

In addition, hardwood flooring has been installed throughout the produce, bakery and deli areas, and an open-air farmers market leads into the produce department.
 

Winn-Dixie At A Glance

Name

  • Winn-Dixie Stores Inc.

Founded

  • 1925

Locations

  • 483

Market

  • Florida, Alabama, Louisiana, Georgia, Mississippi

Associates

  •  More than 46,000

Status

  • Merging with BI-LO LLC Kentucky
     

Analysts say such bold steps are needed if Winn-Dixie is to aggressively compete against such Southeast grocery powers as Publix Super Markets Inc.

“Winn-Dixie in the 1980s was one of the country’s leading-edge supermarket chains in their thought processes and implementation of new technologies,” says W. Frank Dell, president of Dellmart & Co., a Stamford, Conn.-based retail consultancy. “But they basically did nothing new for 15 years and the stores declined. They lost that preferred position to Publix.”

He notes that Winn-Dixie’s targeted customer base includes blue collar and middle-income shoppers and retirees, “which puts them dead-on against Wal-Mart.”
To prosper—and differentiate itself from Walmart Stores Inc.—it’s crucial that Winn-Dixie has superior fresh departments, Dell states.

“Winn-Dixie in the past emphasized beef; it was one of the things that set them apart from everyone else,” he states. “Today it is important to add lots of prepared foods, but that will be difficult to achieve in many stores because of the lack of available space.”

It also is crucial for Winn-Dixie to have strong private-label offerings to further stand apart from other chains, he says.

“The store brands have to generate at least 30 percent of sales if Winn-Dixie is to differentiate itself in the market,” Dell notes.

Winn-Dixie reports that its total private-level penetration is about 22 percent in sales and 26 percent in units.

Store brands include Winn & Lovett, which features premium products; Valu Time, which encompasses lower-priced items; and Winn-Dixie, which includes natural and organic selections.

The array of private-label offerings have been steadily expanding.

The company in 2010, for instance, introduced the Winn-Dixie Active Yogurt line, which is intended for consumers seeking products with added health benefits.

The Strawberry, Blueberry, Peach, Vanilla and Raspberry selections offer probiotics and prebiotics to support digestion, omega-3s and three grams of fiber per serving.

Stores themselves also are being enhanced.

Winn-Dixie has remodeled more than 200 locations apart from its transformational initiative, and is focusing on energy-efficiency at some sites.

An outlet in Covington, La. which opened in 2010, for instance, was reportedly the first grocery store in Louisiana to receive the U.S. Environmental Protection Agency’s GreenChill certification for cooling systems that help reduce refrigerant emissions.

Yet, while such initiatives are positive, analysts say Winn-Dixie still will be graded on food quality.

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