Winn-Dixie Tries to Burnish Image
"We had a tarnished image," Roberto Gonzalez, an area manager for Winn-Dixie, told The Tampa Tribune. "We’re working to change it."
The change Mr. Gonzalez was referring to involves a $100 million investment by Winn-Dixie to remodel stores, including one in Sarasota covered by the Tribune. Among the amenities in the decidedly upscale location were sushi and pizza bars, chef stations, a cafe with free Wi-Fi and more.
Winn-Dixie’s approach has been to localize assortments to build a deeper connection with consumers.
When the chain announced it was going to convert all its SaveRite stores to the Winn-Dixie banner in August, chairman, CEO and president Peter Lynch said, "For several years, Winn-Dixie’s business strategy has placed an emphasis on merchandising to the needs, tastes and preferences of local yet diverse neighborhoods, which means we strive to customize our product assortment to fit the lifestyles of the communities we serve. By aligning all 484 stores under one Winn-Dixie banner, we will be able to ensure a more consistent shopping experience for all of our guests — regardless of the type of neighborhood in which we operate."
Other steps taken by Winn-Dixie include an expansion of its fuelperks! Rewards Program.
According to a recent press release from the company, shoppers who purchase $50 worth of goods using their Winn-Dixie Customer Reward Card earn a discount of five cents per gallon on a fill-up at participating Shell stations. The amount consumers earn increases with larger purchases in stores: 10 cents off per gallon with $100 in purchases; 15 cents off with $150, etc.
So the question becomes, have the steps taken by Winn-Dixie worked?
According to company execs, the answer is "Yes." Sales at remodeled stores are up 10 percent.
Back in June 2010 when RetailWire ran a story on Winn-Dixie’s plan to remodel its way back to success, 69 percent of respondents to an accompanying poll said they were "somewhat" or "much more optimistic" about the chain’s prospects.
- Winn-Dixie Tries to Reformat Image – RetailWire
- Winn-Dixie boldly trying to change perception – The Tampa Tribune
- Winn-Dixie Expands fuelperks! Rewards Program Throughout Central Florida – Winn-Dixie Stores, Inc./Business Wire
- Winn-Dixie to Convert SaveRite Stores – Winn-Dixie Stores, Inc./Business Wire
Discussion Questions
Discussion Questions: Is Winn-Dixie on the right track to improve its image with consumers? What steps do you think it has to take to change negative perceptions about the company?
Remodeled stores might be up 10%, but they are still 25% below market average in sales per square foot relative to their competitors. That is a huge deficit. Typically, most stores are preparing to close at that point. These Winn-Dixie remodel stories get recycled one or two times a year, usually when their stock hits another low like it has recently.
Winn-Dixie can have all the fuel perks programs, try to copy Whole Foods and Publix, come out with new gimmicks and games, and at the end of the day, they are still Winn-Dixie. They can’t copy Publix because Publix is an employee-owned cult that doesn’t have to dance for Wall Street. Trying to be price competitive with Walmart is futile. The only thing left to do is play musical chairs at the bottom with Sweetbay and Albertsons to see who is left standing.
Has anything really worked at Winn-Dixie? The answer is in the stock price.
Images — particularly disappointing ones — in the consumer’s mind last a long time. Let’s give Winn-Dixie kudos for working on improving its image but they face the challenge of “I remember” … and to rise above that will probably take innovations beyond those of just catching up with today’s good competitors.
WD has a long way to go to improve its image. They have an industry reputation for thinking they know what they are doing that is not supported by their performance. Publix made them irrelevant to the Atlanta market and has taken it to them in Florida, splitting WD business with Walmart.
WD trying to go upscale is, as we say down South, like putting lipstick on a pig. My point is that trying to become upscale is unlikely to work for them — it’s a complete image overhaul. They need a different niche.
Every retailer needs to focus on improving the “customer experience” to the best of their ability. By consolidating the brand identity and renovating the stores themselves, Winn-Dixie is on the right track.
They have an opportunity with this revamp to think outside of the box when it comes to nontraditional marketing, introduce new POS technologies to modernize the overall feel of the store, and make the customer experience more convenient and efficient. Or take note from Home Depot’s on-floor social media analysts and employ digital marketing/social media efforts. Technologies can also assist in Winn-Dixie’s localized approach.
These are just a couple of examples, but the idea is to modernize the retailer’s brand, while also improving in-store processes.
A last ditch effort to see who controls last place? I do applaud some of the localization programs they are starting up, but this is something that should have been done long ago. Pizza and sushi bars and free Wi-Fi are yet more distractions from the issues facing their core business.
I think a better question is, how long will this prolong the inevitable? WD has been in a downward spiral for a long time and it appears the reasons are systemic. They can’t compete effectively with either Publix or Walmart. It seems to me it’s a matter of how long do they keep the lights on?
It takes a lot more than a sushi-bar or a better environment to deliver oneself from tarnish. This is a brand issue, so think of all the classic “P’s”: People, Place, Product, Price, Projection and Positioning. They’ve ALL got to move to a different, cleaner place. Assuming, of course, it’s not too late — which it may be. We shall see shortly through ROI.
As a Winn-Dixie customer, I can assure management that store remodels will not cure the problem. They need to work on getting the advertised price correctly to the cash register, keeping product in stock (especially anything that is on sale) and pay attention to in-store quality control (especially in the meat market). Winn-Dixie has a long history of reaching for silver bullets. They always seem to try to buy rather than earn business. What makes their situation even worse is that they share most markets with Publix, who seems to have figured out long ago that hiring right, training right and putting the customer first was a great formula for success.
Over the years in trips to the South, I had always considered Winn-Dixie to sort of be the A&P of the Southern Region of the U.S. That opinion should speak for itself entirely.
In August of 2010 in visiting an island area of Georgia I focused my shopping at Harris-Teeter. Scanner always does the vacation shopping as it’s an excuse to visit stores under the guise of being nice to my wife, of course.
If there was a short trip involved, Winn-Dixie was closer so I visited both Winn-Dixie and Harris-Teeter. I thought upon entering Winn-Dixie, “Hey, this isn’t as bad as I thought. I thought upon entering Harris-Teeter,, “Nice store, nice location, but gee, lots of out-of-stocks, not much service for a service-oriented store, and pricing — Wow!”
In August of this year, 2011, arriving at the same destination as last, I left Mrs. Scanner on our first day to settle in and hit the Winn-Dixie for some quick things to get us going. So I thought! I entered a nicely remodeled store. I was greeted three times prior to making it to the back aisle. The fresh areas had been all updated — especially the produce, cheeses and ready-to-eat foods. I was impressed.
In checkout, the cashier took care of me; could have taught customer service for the best of organizations in the world. She was fantastic. She recommended places all over the island. She mentioned that Davis Love III (PGA Golfer) had just been in because he liked their biscuits and they would go great with the wings I had in my cart. I said, “I didn’t see those.” She quickly had a clerk go and get them for me and he was back so fast that my few items’ checkout wasn’t even completed. This cashier not only dazzled me with personal service, but she up-sold me while doing it! Get it?
I would rate the store as an 8-8.5 out of ten and the service as off the charts. They won my business for the week and when I return next season, they’ll win it again by earning my first visit.
So, what’s behind this long story? Chains like Winn-Dixie do have a mountain to climb to overcome image issues as they have. There’s no question they have them. However, they overcome them one customer at a time and with intense focus in doing so. If anyone shopping there had the experiences I had, I’m sure they will return over and over again. Apparently, Davis Love III does a couple times a week for biscuits. These types of experiences, over and over again, will change perception. Not a matter of advertising, cards, or fuel discount; they’re all great, but the experiences change perceptions. Promotions get them in the door, so you have the chance. They never do it on their own.
Great job Winn-Dixie. You are on the right track. And, you just might have a leader in your continued success ringing up in lane five on an island in Georgia. Great job!
BTW: I understand why he liked the biscuits! Yum!
I am in Winn-Dixie stores on a regular basis to see how well they are doing. Perhaps 100 stores a year or so. I can tell you with confidence that the remodeled stores are the nothing more than the same old Winn-Dixie in a a spruced up building. The employees are the same except they might have nicer looking uniforms. The poor merchandising, high prices, low sales per square foot performance is still the same, just in a different package. Their very best performing stores are just barely at national average levels.
For Winn-Dixie to get to average, it is a big success for them. Funny, in New Orleans they perform quite well because of the shortage of grocery stores. However when comparing them to the sales per square foot performance of their competitors in New Orleans, they are still 25% below local market average. They just can’t ever seem to win.
Let’s see, $100M over almost 500 stores is $200K per store: about what a homeowner would spend on their house for a thorough makeover; of course not all stores are being done, so the actual per/store is higher…but then that means only a fraction of stores are being done.
It sounds hopeless (and after reading the other comments here, I believe it is).
No. Price, service and product selection all combine to identify a successful retail grocer. NOT discount programs or fancy store remodels. Winn-Dixie would be better to focus on its core competencies and maximize these, including eliminating out-of-stocks at store level, to better grow their business….