Winn-Dixie Tries to Reformat Image

Discussion
Jun 09, 2010
George Anderson

By George Anderson

Winn-Dixie is a long way from the chain’s heyday, but the
grocery chain is looking to make a new future for itself a few years after
having emerged from the protection of Chapter 11.

Part of the new Winn-Dixie
is a concept store that is being introduced to consumers in Florida for the
first time. A consumer in Louisiana, where Winn-Dixie first tested the concept,
told the chain’s CEO Peter Lynch that it was akin to a Whole Foods but without
the receipt shock.

"This store really speaks volumes about the fresh and local strategy
we’ve been working on,’ Mr. Lynch told The Miami Herald. "It really
gets this new brand image out there with the consumers. As they see these new
stores, they can see clearly where we’re heading for the future.’

Among the
store’s features are an expanded deli, a rotisserie bar where various meats
are carved to order, a barbeque bar and a global cuisine station. The store
has double the number of specialty items in the average Winn-Dixie and about
30 percent more organic products.

"Our customers are very time-challenged and we want to provide solutions,’
Nancy Gaddy, Winn-Dixie’s vice president in charge of deli and bakery, told
the Herald. "If people are thinking about what’s for dinner tonight,
instead of going to get fast food, we want them to come here.’

Winn-Dixie is making
a conscious effort to appeal to consumers with more upscale tastes in the
new concept.

"Obviously, we’ve lost a lot of those customers to Publix over the years
because we didn’t offer them what they were looking for,’ Mr. Lynch said. "This
is an opportunity to bring them back.’

Mr. Lynch said the concept stores in
Louisiana are grabbing share from competitors.

"It’s exceeded expectations and my expectations are big,’ he said.

Karen
Short, retail analyst with BMO Capital Markets, said of Winn-Dixie that they "are
good operators,’ but face an uphill battle with consumers and investors. "Winn-Dixie
has a perception head wind. I’m not quite sure what it takes to make that go
away," she told the Herald.

Discussion Question: Is Winn-Dixie on the right track with its new concept
store and other changes the company has made since emerging from bankruptcy
in 2006? How would you recommend they overcome the lasting perceptions of
shoppers?

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15 Comments on "Winn-Dixie Tries to Reformat Image"


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David Biernbaum
Guest
10 years 11 months ago

Winn-Dixie is working in the right direction to improve its image. Actions speak volumes. Stores with the expanded deli, rotisserie bar, and all the new specialty items will do well.

David Livingston
Guest
10 years 11 months ago

Winn-Dixie will give this a good shot but they will fall short on the labor end. Publix has snatched up the best employees, the ones needed to pull of this kind of concept. With this kind of concept, unless you have “Publix” labor quality, consumers will soon see through the facade. In the end, you have a large food museum. Big and beautiful but quiet and no customers.

Keep in mind that Winn-Dixie operates some of the lowest sales per square foot supermarkets in the United States. Is there a worse performing sales per square foot supermarket operator out there? Based on their past track record, I am not encouraged. I do predict they will have large percentage sales increases but will still be near the bottom of the sales per square foot standings.

Dan Raftery
Guest
10 years 11 months ago

It takes time and persistence to change a negative perception. If the folks at WD continue bucking the “headwind,” and if the chain can survive long enough, the old perception will fade. If there was a silver lining to operating in hurricane alley, it might be the loss of tired stores. More store replacements/remodels (without hurricanes!) will help a lot.

For what it’s worth: behind the scenes, I frequently hear positive comments from manufacturers about a refined business savvy at the chain. That can only help.

Paula Rosenblum
Guest
10 years 11 months ago

One area where Publix is vulnerable is in fresh/local. If Winn-Dixie can really do a “Whole Foods without the Whole Paycheck,” it has a chance.

Of course, on the other side of the equation, where I live there’s a Publix about every 25 blocks vs. less dense concentrations of Winn-Dixie’s, so they’ll have to work hard to make the customer go somewhere a bit less convenient.

Gene Detroyer
Guest
10 years 11 months ago

If this is an effort to move Winn-Dixie from worst to first, or at least something better than worst, and if it is truly a change in the profile of this retailer, then the most logical step is to change the name.

Yes, Winn-Dixie is a grand old supermarket name. But, even if they operate like they are in a whole new world, nothing will change with the consumer’s mind. The objective must be to get new shoppers into the stores — the ones that left Winn-Dixie years and decades ago. Don’t invite them back to Winn-Dixie, invite them back to something new.

Every retailer has little things that go wrong with a consumer. One thing you don’t want the consumer to surmise when that happens is, “Oh, this is the same old Winn-Dixie.”

Gene Hoffman
Guest
Gene Hoffman
10 years 11 months ago

Winn-Dixie is getting better with its new concept but its past warts are still a hanging tail on its slowly ascending kite. Unfortunately W-D mostly operates against the strong and swift Publix markets, the chain where the best employees already operate.

Currently W-D is getting its better looks from its leader, Peter Lynch, who is proving to be a good plastic surgeon. But when pitted against Publix, remember–the race is not always to the swift nor the battle to strong but that’s still the way to bet.

Roger Saunders
Guest
10 years 11 months ago

Peter Lynch took some tough-minded steps over the past 3 years in consolidating operations, reducing store counts, and exiting markets. Not an easy process for any organization.

He has kept his commitment that he is a ‘builder’, as well. These new stores will appeal to a core group of Winn-Dixie shoppers who have deep loyalty to the brand. Winn-Dixie scores highly among their shopper base on Selection, Service, Price, Location, Quality, as well as willingness to recommend the stores.

As a Regional Chain, Winn-Dixie is worth watching.

Ed Rosenbaum
Guest
10 years 11 months ago

Winn-Dixie has a long road ahead to even get back in the ballpark with the other grocers who have stayed ahead of the curve over the past few years. In my area marketplace, they are not even a consideration by most shoppers. I would think the ranking is Publix, Wal-Mart, Target, then Whole Foods.

There are only so many dollars to go around. So to find a modicum of success two primary things have to change:
1 – Winn-Dixie has to change the public’s conception.
2 – They have to market and advertise better, stronger and more often than they currently do, never to let the public know they have changed, etc.

I do like the changes they are testing. It reminds me of how Wegmans–the Northeast chain moving South one store at a time–did it. Wegmans’ success was because they offered a change to the staid grocery store model that others followed. Now the Wegmans’ “footprint” seems to have caught on. I see Winn-Dixie now following along with Publix and others.

By the way, where is Albertsons?

David B. Feinstein
Guest
David B. Feinstein
10 years 11 months ago

It may have taken Winn-Dixie a number of years to realize they needed to re-evaluate the way they have been doing business and take a step back and re-evaluate their operations once emerging from Chapter 11. They had to become more aggressive. A new Winn-Dixie store format and a larger selection of product lines, plus an improved Deli and other specialty foods plus including a fresh new re-branding strategy will take them a long way.

Winn-Dixie will once again become a PLAYER in the Supermarket channel, giving Publix a run for the business…. Welcome back the “NEW WINN-DIXIE”

James Tenser
Guest
10 years 11 months ago

“Fresh and local” is a good buzz-phrase for any operator, and it should at least help position Winn-Dixie as an alternative to other chain competitors: I presume a little below Publix in price and a little less generic than Walmart.

The new store concept seems attractive, but there’s a lot of work ahead to transform the entire chain. Most shoppers will evaluate the W-D brand based on what they see–which will continue to be older, less vibrant existing stores for a while to come.

So Mr. Lynch still has steep challenges ahead–to update the store concept, banner perception and operating culture in visible and pervasive ways. If it can demonstrate an improving trend in store productivity, Winn-Dixie just might have a shot.

Craig Sundstrom
Guest
10 years 11 months ago

“Winn-Dixie has a perception headwind. I’m not quite sure what it takes to make that go away.”

What more can I say? (Sadly, other than my standard “best wishes,” not much.)

Interesting, I think, was Ms. Gaddy’s admission that WD “hadn’t been giving customers what they want.” After the story about Domino’s a few weeks back, it seems that contrition is all the rage in the corporate world…but will it really work?

Jeff Hall
Guest
10 years 11 months ago

Kudos to Winn-Dixie for introducing an attractive new concept store–and none too soon. The brand has a reputation of operating somewhat stodgy stores. Moving forward with a fresh, updated concept can’t help but to gain traction.

Safeway is one of the best known case studies for how to do reinvent the in-store experience the right way and gain lasting market share. Harris Teeter is another well-respected brand that’s continued to invest in creating inviting, experiential retail experiences. The key to success for Winn-Dixie will be a top level organizational commitment to the new, much more relevant and consumer-centric store design.

Ed Dennis
Guest
Ed Dennis
10 years 11 months ago
Anything Winn-Dixie does is not going to cure their long term problem, which is quality. To Winn-Dixie, quality means getting by. To their main competitor, quality comprised the entire spectrum of consumer delights. You can readily see Winn-Dixie’s problem if you enter any store at a peak sales period. The employees are having a party, yelling back and forth and management isn’t to be seen. Winn Dixie has long thought that the only way to compete was to hire cheap and this permeates their entire system. They can’t seem to execute anything consistently. They jump on any silver bullet that a consultant drags in the door (now they are selling gas discounts). Winn-Dixie should get their management to start working on what’s really important (hiring and training) and focus their efforts on their customers instead of this week’s marketing tactic. Just go in one of their stores and buy their PL canned pineapple and compare it to Dole. Well, that’s like comparing Winn-Dixie to Publix. I wish them well but I don’t really hold out… Read more »
jack flanagan
Guest
10 years 11 months ago

Winn-Dixie has been working on ‘changing perceptions’ for 5 years or more.

While the ‘new’ Winn-Dixie may be a (vast ?) improvement over the ‘old’ Winn-Dixie, the fact is that competitors have not stood still over that same time frame.

Aaron Spann
Guest
Aaron Spann
10 years 11 months ago

Just last week I was lucky enough to visit a Winn-Dixie store in the greater Orlando area. This store was fresh, exciting and not too big (which is quickly becoming a much-desired must-have for me). I saw no reason not to shop at this store on a normal basis. Albeit, I only visited the one store but if this is the “New Winn-Dixie” they have a great experience from ambiance to smiling faces to shopability.

I do however see them as “fill-in stores” which might work well in an area that is already established or in secondary markets where they can be leaders. In the area I visited there was a brand-new Publix but it was not easy to get to.

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