Winn-Dixie to freshen look
By MARK ALBRIGHT
Published February 21, 2007
Winn-Dixie Stores Inc. is purging the dated pink and turquoise decor from its stores as the Jacksonville grocer resurrects its first chainwide remodeling effort in years.
It's going to take time. At an announced pace of 75 stores a year, the up-to-$2-million per store remodeling work will take about seven years to roll through the chain's 522 stores in five states.
That's about the same remodeling pace as most supermarket chains.
Done up in darker earth tones, the new look focuses on showing perishables such as produce in a more tantalizing light while removing aisle obstacles that block quicker shopping trips.
The first remodeled store with the new look opens next month in Jacksonville, with 35 more to be completed this year. The company did not disclose where the others will be or where its 37 stores in the Tampa Bay stand in line.
Peter Lynch, chairman and chief executive officer, said the model for the new Winn-Dixie is Publix, which uses a formula of price, quality and variety rather than a bargain-oriented "food warehouse" such as Wal-Mart Supercenters. He also pledged that staffing, recently beefed up to improve customer service, would not be cut.
"Too many grocers are taking the labor costs out of their stores, but we are not going to do that," said Lynch, a former Albertsons executive. "I feel pretty good about where we are going."
Trying to elbow in on Publix is the same strategy other traditional supermarkets are using in hopes of countering the relentless growth of Wal-Mart in the grocery business. Publix, which has 39 percent of the market, and second-place Wal-Mart, with 16 percent, were the only major grocers in the Tampa Bay area with market share growth in the January figures released by ACNielsen/TradeDimensions. Winn-Dixie ranked fourth among the six big players, with 8.4 percent.
After a few dozen South Florida Winn-Dixie stores got cosmetic remodelings before the chain went into Chapter 11 bankruptcy protection in 2005, Winn-Dixie put the brakes on full-blown overhauls to preserve cash. The chain, which used the bankruptcy action to close more than 400 stores, had stopped building new stores a few years before that.
Winn-Dixie outlined the remodeling program Tuesday when it reported quarterly earnings for the first time since emerging from bankruptcy protection Nov.21.
The company, which said it had $500-million in cash during its fiscal second quarter ended Jan. 10, reported a net loss of $9.9-million for the eight weeks since it emerged from bankruptcy protection. Revenue increased 9 percent to $1.2-billion. Earnings per share data were not broken out.
The company cautioned that because of fresh-start accounting procedures, earnings were not comparable to previous periods when the company was in bankruptcy protection. Sales in stores open more than a year were down 0.5 percent during the quarter, but were up 3.5 percent among stores not affected by spiked demand in the aftermath of hurricanes Katrina and Wilma in 2005.
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How Katrina and Wilma nudged sales
Winn-Dixie's sales in stores open more than a year were down 0.5 percent in the second quarter from a year ago, but that was not as bad as it sounds. Sales were still up 1.8 percent in the first half overall.
This year's second quarter sales performance was compared to sales spikes driven by post-Katrina and post-Wilma spending in areas devastated by hurricanes and the failure of the levees in New Orleans. In fact, same-store sales in areas affected by Katrina and Wilma were down 6.7 percent this time, pulling down a 3.5 percent increase in sales elsewhere.
How did hurricanes boost sales? Displaced people needed to replace supplies lost to the 2005 storms - money that was not being spent again in fall 2006.