Winn-Dixie Closing 35 More Stores

Discussion
Mar 01, 2006
George Anderson

By George Anderson


Winn-Dixie has concluded that it will need to sell or close another 35 store locations as part of its reorganization under Chapter 11 bankruptcy protection.


In a released statement made yesterday, the grocery chain’s CEO Peter Lynch said the company had completed its review of store operations. “We believe the 550 stores in our continuing footprint will provide us with the most solid possible foundation on which to build a more profitable future for Winn-Dixie.”


The grocer plans to close 28 stores in its home state of Florida, three in Georgia and two each in Alabama and Louisiana. It had previously closed 326 locations as part of its effort to turn the company around.


Moderator’s Comment: Have Peter Lynch and company put Winn-Dixie’s business in sufficient order to give the company a fighting chance once it emerges
from Chapter 11 bankruptcy protection?

George Anderson – Moderator

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8 Comments on "Winn-Dixie Closing 35 More Stores"


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Race Cowgill
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Race Cowgill
15 years 1 day ago
Thank you for sharing your data, David; this is the kind of information I find so much more useful. Our own data shows W-D could have prevented all this from happening. Ironically, the fundamental errors that we found got W-D into trouble are still occurring. According to our numbers (please chime in, anyone, if you have more to add), as of the early 90’s, W-D had been operating for many years under the assumptions that their target market (those of slightly lower than average income) felt good about the W-D shopping experience — the quality of goods, presentation of goods, selection, store layout and store “tone,” service levels, etc. Our data at that time showed that customers felt overwhelmingly that the stores and goods were “fair” or “poor” on all measures. Here is the kicker: when presented with this data, W-D rejected it as wrong, incorrectly gathered, etc., despite full disclosure of how it was gathered and analyzed. A number of mid-level executives at the time suggested off the record that upper management “had a… Read more »
Gene Hoffman
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Gene Hoffman
15 years 1 day ago

Winn-Dixie reminds one of a fading movie star: once excellent but now winkled, warped and getting treated harshly by the vicissitudes of time and by contemporary competition.

Today, W-D is no longer an attractive, desirable retail ingenue, and all its wart removal and cosmetics will only let it rise to the level of possible survival. W-D is handicapped by having an arsenal that contains mostly yesterday’s memories as it tries to go on the offense against today’s retail realities. Nonetheless, good luck, Peter Lynch. “You put up a good battle at Albertsons but got to Winn-Dixie too late and me thinketh the dye was/is cast.”

Len Lewis
Guest
Len Lewis
15 years 1 day ago

Cost cutting and store closings are fine. But the key is what you do with the ones that are left.

Winn-Dixie needs to find its niche. They ain’t “The Beef People” no more.

Michael L. Howatt
Guest
Michael L. Howatt
15 years 1 day ago

So Peter, what was the result of the review of store operations? Answering the question “What can Winn-Dixie do to “upgrade” their low impression in the marketplace?” would have been time better spent. I think part of their problem is their determination not to change. It’s the “we’ve been doing it this way” for a long time mentality that is killing them. If it’s broke, you had better fix it, or sell off to a larger more progressive company.

ellis naro
Guest
ellis naro
15 years 1 day ago

To me, it’s still up in the air as far as whether this is going to help or not. The employees are my main concern…losing their jobs. How is Winn-Dixie going to pay its creditors when the stock is down and business looks bad?

David Livingston
Guest
15 years 1 day ago
Winn-Dixie is not even close. We did a store by store review last year and found only 3% of their stores were performing at a sales per sq. ft. level that was equal or greater than the national average. For the most part, they were running about 35% below average. All of their store closings are only getting them up to about 30% below average. Then, to compound the issue, some of their best performing stores were blown away by Hurricane Katrina and probably won’t be rebuilt since there is no one around to sell groceries to. On a positive note, Winn-Dixie stores in areas that many evacuees have moved to are experiencing sales increases much higher compared to their competitors. Some stores are reporting sales up 100%, but 40% to 50% is not uncommon, while the competition is up about 25%. All this does is get them up to average. It also invites competitors to move in knowing Winn-Dixie is an easy mark to steal sales. I credit Winn-Dixie’s strong increases in these areas… Read more »
Mark Lilien
Guest
15 years 1 day ago

I’m sure that the Winn-Dixie creditors are carefully trying to determine if the company is worth more dead than alive. Is it worthwhile to keep it going or would it be more valuable if it simply sold off the real estate? That’s the number one issue for all Chapter 11 retailers. A generation or two ago, many retailers could operate in Chapter 11 for years and then emerge as newly solvent companies (Federated, Toys R Us, etc.). It seems that the current environment is less forgiving, so the time allowed to recover during Chapter 11 is much shorter. My guess is that if Winn-Dixie can’t show a meaningful turnaround in the next few months, it will be gone within a year.

Bob Bridwell
Guest
Bob Bridwell
15 years 1 day ago

The other contributors are right on. The key is getting the customers in the door and then getting them to spend money. Low or poor performing stores usually means a lack of direction – no direction from headquarters to set the pace, or poorly motivated managers.

We all know managers that could go into the lowest of the low and get it profitable in a reasonable time. He or she will say, “If you want it profitable, these are three or four things that I’m going to change today.”

I think unless you change all the years of plodding along into a whole new philosophy, then you’re still going to fail…just a little later with the court’s indulgence.

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