The supermarket chain is trying a new look and new merchandising in southeast Florida.
By MARK ALBRIGHT
Published August 20, 2004
Midway through a cost-cutting overhaul to revive its competitiveness, Winn-Dixie Stores Inc. on Thursday reported a $22.7-million loss for the fourth quarter and revealed some new experiments to win back shoppers.
The Jacksonville chain that once was so proud of its meats it branded itself "The Beef People," is adding Certified Angus beef in some stores. It also will sell decorated gourmet cakes in some bakeries, test more Thai foods and offer clerks more customer service training.
Wrapping up a fiscal year in which Winn-Dixie reported losing $100.4-million and announced a plan to pull out of 16 metro markets, the company's new chief executive officer said the chain will test a new look and the new merchandising in the Fort Lauderdale/Miami market. Winn-Dixie is a strong second in market share only to Publix Super Markets Inc. in that market.
"Clearly this has been a tough year that compelled us to take some different steps," said Frank Lazaran, Winn-Dixie chief executive officer. "We are making fundamental changes to be more competitive and we are making headway. But we are not going to turn around overnight."
Those were familiar words to Winn-Dixie observers who heard them from the company's third management team in six years.
Winn-Dixie has been shrinking to its strongest core markets in the Southeast for that long, yet 2004 sales in established stores have continued to slip. In the Tampa Bay market Winn-Dixie slid to fourth place behind fast-growing, third-place Wal-Mart and its Supercenters last year.
No supermarket chain has been so threatened by Wal-Mart as Winn-Dixie, so Lazaran has been looking for a way to co-exist and avoid a price war the less efficient Winn-Dixie cannot win.
The chosen strategy, he said Thursday, is to offer a neighborhood supermarket that relies on convenience, quality food and competitive pricing.
Winn-Dixie is pouring about $60-million into cosmetic remodeling of its 92 South Florida stores, which face little direct competition from Wal-Mart. Whatever new products work, he said, will be seen quickly chainwide.
For the quarter ended June 30, Winn-Dixie lost $22.7-million, or 16 cents share, compared with net income of $62.5-milion, or 44 cents a share in the same quarter a year ago. Most of the loss came from store closing expenses.
Not counting the stores being closed, the company lost $2.1-million, or 1 cent a share. Revenues for the quarter rose 3.5 percent to $2.56-billion, but were down 3.6 percent to $10.6-billion for the fiscal year.
Winn-Dixie also had to close many stores for a day or two because of Hurricane Charley and the power outages that followed the storm in many markets.
The company said its preliminary uninsured loss was $10-million, mostly from spoiled perishables. The loss is the annual deductible on the company's business interruption insurance policies.
