Closing 20 stores - not too bad when you consider the number of BI-LO stores out there, however, not reopening the damaged Baton Rouge stores is a bad sign, a company's in trouble when they don't reopen stores like thatklkla wrote:This article as more information. It looks like 20 stores are closing:
http://www.supermarketnews.com/retail-f ... tructuring
- Closing 20 stores
- Laying off some store department heads (no details given)
- Renovated 90 of it's 730 stores last year (12.3%)
- Sales fell 7% last year
- Same store sales down 3.6%
- Blames WalMart and other competitors, deflation and changes in food stamp program.
- Trying to refinance it's debt (never a good sign especially when interest rates have been so low for so long).
Laying off some store department heads - could mean anything though it could undermine operations further
Renovated 90 of 730 stores - doesn't break down remodeling, there was few like the prototype, basically repainting everything doesn't really count as a remodel
Sales down 7%/same store sales down 3.6% - THIS is the real problem. McLeod's been touting Down Down as a success (larger basket sizes, etc.) even though the profit is taking a hit. But now it looks like those aren't working at all. -3.6% is pretty bad even considering the deflationary atmosphere, and with McLeod's "big turnaround" going on.
Blames competition - Walmart has been a thorn in Winn-Dixie's side in the late 1990s, and most retailers managed to adapt to that. I don't think it's an excuse anymore. Except for Aldi and maybe Publix, the "competitors" are better than it. Why go to Winn-Dixie or BI-LO when there's an Albertsons or Kroger nearby?
It looks like things are slowly but surely going "Down Down the drain" and I wouldn't be surprised if McLeod's heading out the door soon. At this point, any turnaround is going to require some market exits and hard decisions.