Winn Dixie back on expansion/remodel campaign

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Winn Dixie back on expansion/remodel campaign

Post by cjd »

I noticed the local Winn DIxie on the north end of town is about to get the new green remodel. It presently has the late 2000s decor, which was installed in 2008. I don't know why people call it the 2005 decor, but it's not. Winn Dixie came out of bankruptcy in 06, and in Florida at least, didn't start these redos until 08,

Anyway, I've been told the plan is to have all the stores in the chain remodeled to either the red decor that debuted in 2014, or this new more colorful variant by 2024.

That's quite an ambition, considering the late 2000s decor was Winn Dixie's last ambitious remodel campaign, and I think only half the stores even got to that. But, I think they can probably pull it off this time.

It is nice that they are trying to get all of the stores finally to a cohesive decor, because they really never have been able to! They have stores out there that still have the 90s Marketplace decor in the salmon/blue or less intrusive yellow/teal colors. There are stores that have the early 2000s cheap white decor which was mostly a repaint and new signs in their stores that originally had the 80s chrome and neon decor. Along with the 2008 decor, and some stores that still have the decor they inherited from Sweetbay.

I will say though that I have been impressed with Winn DIxie's seeming improvement the last couple of years. They are opening new stores which up until now is something that really hasn't happened post-bankruptcy. (Aside from the inherited Sweetbay stores, which often ended up replacing WD's existing locations.) They also seem to have done a nice job with their inherited Earth Fare stores, which have made up the majority of their grand openings this year. The new more colorful decor I think is an improvement over the red, and it seems that the stores that are getting these remodels are seeing increased sales, due to the new environment.

From the pictures I've seen, these stores really do not look and feel like a traditional Winn Dixie.

I have my doubts it will last, as WD to me generally doesn't strike me as the company that has typically kept it's momentum going. (A good example of this is the Transformational stores that we heard the same thing about (it doesn't feel like you're in a Winn-Dixie) yet those never really took off, aside from a select few new locations. I feel that if they can keep these new remodels going, that they could win in the long run. I do think they are in a better position than we'd have expected a couple of years ago even.

But, it is nice to see WD's sales up some and we really need a competitor to just Publix, Walmart and Aldi. While obviously, I don't think Publix will ever have to worry about them much as competition, it will be interesting to see if they can move up some as a second tier grocer.
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Re: Winn Dixie back on expansion/remodel campaign

Post by storewanderer »

What is most impressive is they've made it this long. They have had some promising remodels as well as some promising pricing programs. How many of those super low volume stores are they still sitting on? I would think by now they have fewer of those types of super low volume operations. There seems to be some core group of stores that actually performs well enough to fund the ongoing operation of the chain as well as these ongoing investments. As you point out they picked up some stores from Earth Fare and some from Lucky's Market as well and though smaller footprint than typical those were fresh food focused stores with a modern and upbeat interior (so different from a typical Winn Dixie) and if they could get a working formula into them, which maybe they did, that would be good.

It seems like Winn Dixie can never keep its momentum going but does gain some other new momentum fairly quickly which may or may not work. The fact that they keep going like this is more interesting.

There is definitely room for them in some form, given the lack of competition. Plus the loss of new entrants Lucky's and (not as new) Earth Fare. They just need to be a better competitor. Purchases of modern concepts that had promise but failed for whatever reason (Sweetbay, Lucky's, Earth Fare) usually is not a sound strategy but when you are Winn Dixie and your base stores are so bad, suddenly it actually seems to work out.

Their base product quality seems to be decent, it is just rotation problems in those super low volume stores... and unappealing fresh departments that can't (too few sales)/don't put enough product out. In some of their medium or higher volume stores I felt they had a perfectly competitive fresh offering.

Part of the problem may be the stores in general. Some of these locations just may not demand much in the way of fresh departments. They may be more center store focused type of places with very low fresh department sales (like a Food Lion). I feel like they had a format for that idea anyway and it was an old Food Lion affiliate anyway- Harveys?
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Re: Winn Dixie back on expansion/remodel campaign

Post by cjd »

The store that will be getting the decor updates is one of those low volume stores. At one time, it was the only WD store in my town, which is pretty pathetic as the county seat. It's a smaller 80s store, and there's really no space to expand it on either side. The service departments are pretty small, although they really tried with the 2008 remodel to expand the selection. By replacing single deck coolers with multi-deck, adding island coolers, etc.

It seems to be a fairly well run store. I knew a guy that worked in the seafood dept that got fired for telling a customer at the end of the night that they couldn't steam their lobster. In actuality they had already cleaned the steamer and too lazy to clean it gain. Sounds pretty strict for a WD to me.

It is very clean and organized well.

It's biggest problems as you mention are low volume. I rarely shop there but one Friday night I stopped in to pick up some strawberries for the weekend because I was at the Goodwill next door and it was storming out badly. I would've gone to Publix ordinarily. When I got to the strawberries they looked like they weren't all that fresh, and the produce clerk came over and informed me that they were BOGO. I just needed one and honestly I didn't want two because they didn't look like they would last long in the freezer. They practically begged me to take both, obviously they wanted to get rid of them!

The second thing is out of stock items. My mother used to shop here before they got the larger and much busier south Sweetbay location. And almost every time she would leave frustrated because the sale items were out of stock.

Only a few people I know personally shop this store and I think most of them are friends with the manager. Otherwise everyone goes to the south one. I even know people that I would think would be grocery snobs that do the majority of their shopping at that south WD! So it's probably not too bad, and its higher volume keeps things fresher.
Last edited by cjd on September 6th, 2021, 6:52 pm, edited 3 times in total.
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Re: Winn Dixie back on expansion/remodel campaign

Post by cjd »

In the smaller towns in CFL, most of the only stores were Walmart, WD and Sweetbay. In most of these places the WD stores were Marketplace stores from the early to mid 90s that had never been updated.

Most of the Sweetbay stores in those markets started out as Kash N Karry stores in the mid 80s, with expansion and full remodels in the early 2000s. Then they got some mostly decor updates in the mid-late 2000s as Sweetbay. So they weren't the most up to date, but I wouldn't call them outdated. And certainly more modern than WD's existing locations.

So unsurprisingly, in most of these towns, WD ended up keeping the Sweetbay locations and closing the WD. Since the FTC ruled they couldn't operate two locations due to low competition.

OTOH in north parts of FL and along the coasts, a number of former Sweetbay stores are very modern, and have pretty impressive layouts, as they were some of the last ones built before selling to WD, and were nearly new at the time. WD got some great locations with these. They also seem to do a high volume in stores like The Villages locations.

One good thing about the former Sweetbay stores is WD did not want to alienate their existing clientele. So they tried to change as little as possible. While Sweetbay had some issues at the end, they overall were pretty well run locations and did decent volume. At least in the one here, WD chose to keep the existing management, which was a good thing, and I don't think sales really ever fell. Although in general, I consider it a somewhat bland store, compared to Publix.

While I think Publix has far better fried and rotisserie chicken, WD's rotisserie chicken is pretty good. They also have some bakery items I really like. They offer an award winning apple pie that uses sour apples that is really good. They also used to offer some excellent heath bar cookies that were IMO as good or better than Publix. They also make some good tailgater slider sandwiches.

Unfortunately unlike Publix, which pretty much always has the same bakery items, you don't know necessarily what you'll get with WD. Some of their low volume locations especially have very little out.

There may well be still some pretty terrible WD stores out there. I am not personally aware of any though. Most of their base now seems to be at least up to unremodeled Marketplace stores or unremodeled Sweetbays at the worse. There may still be some rundown 80s stores that got the cheap white redos in the early 2000s. I really don't know. I remember reading about a location in Gainesville that you couldn't have paid me to go in. I don't even know how it stayed open, apparently the refrigeration was always failing and items thawed out. The deli sounded horrible. It actually still had the chrome and neon decor from the 80s when it closed a few years ago. Good riddance. I hope they don't still have stores out there like that and think just slapping some new decor on the walls will fix it.

If it were me I'd probably dump anything older than Marketplace or that hasn't at least has had decent capital put into it post bankruptcy. Remodel the rest up to current standard and if it's not worth putting the money in, dump it. I think that's kinda what their intention was with keeping the Sweetbays and closing the WD Marketplaces.

I guess when it just doesn't make sense to run a full line store, giving low volume/non service dept focused locations to the Harveys banner did help keep them separate from the WD line.

The Winn Dixie name is certainly not one that most people think of as a top line over the decades, but I do think their reputation is a lot better than it was in the mid 2000s, and it does seem to be getting better in the last decade or so. Whether or not it is consistent in time or location I think is the big if. I do think they are trying.
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Re: Winn Dixie back on expansion/remodel campaign

Post by buckguy »

The usual sequence of events with troubled retail chains is that they survive a long time because they have cash flow, but ultimately it isn’t enough for them to invest in their infrastructure at scale. Also, trying to implement stronger fresh foods or even basic perishables also is expensive.

The only chain of any size coming back from the dead was First National, which now is most forgotten. They once were the dominant grocer in New England—they had stores in literally every New England town of any size and had had some success in Westchester County near NYC. Like a lot of grocery chains, they converted to super markets but relied on familiarity and market saturation as they had with smaller grocery stores, rather than bringing something novel to the table. Their sales began to stagnate in the late 50s and early 60s, esp. in their larger markets where upstarts like Stop&Shop had emerged without having the destruction of having a lot of small stores. Instead of focusing on these markets, they decided to expand in the NYC a area by buying Safeway’s unprofitable operation which surrounded the city and included some stores in it, as well. This was a costly failure as the stores had high costs and were a mixed bag in terms of the actual stores. Things went down hill from there and they withdrew from much of the NYC area and later from many other markets. They were bought by an Ohio chain, Pick-n-Pay which had revived its own fortunes recently and was major player in Cleveland. The new merged company took the First National name and the Ohio management wound up closing more stores shrinking First National to Connecticut, Westchester and a few scattered locations elsewhere. The stores varied from big to small, well managed to not, but after a decade, First National was revived enough that it moved back into some of its old markets like Boston and some additional areas around NYC. They shifted to a price sensitive model using a prototype that had had some success in Ohio. The Ohio stores also probably gave them access to capital to enable this. Ultimately, they were attractive enough that Ahold bought them and integrated the Ohio stores into Tops (which ultimately failed) and the Northeastern stores became Stop &Shops. Some of the old First Nationals (circa1950s) still operate as Stop & Shops or some other chain.

So…….a return from the dead could happen given competent management, a fairly simple feasible model and access to capital. I don’t think Winn-Dixie has all of these. A price sensitive model has risk because stronger chains can take losses and wait out the pricing. First National was lucky because some of their locally owned competitors had problems of their own and were unable too invest in their operations. Winn-Dixie doesn’t have that kind of advantage—-they used to be the low cost operator and Walmart can always outdo them in that category. They may have some nice stores but they don’t seem to have niche they can carve outeasily nor do they have resources to build a niche at scale. Unless a major competitor stumbles, I suspect they will bumble along until they run out of cash.
Last edited by buckguy on September 12th, 2021, 5:34 am, edited 1 time in total.
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Re: Winn Dixie back on expansion/remodel campaign

Post by storewanderer »

I'm not sure Winn Dixie is exactly stumbling along per se at this point. They are developing better perimeters, better merchandising, and they seem to have an actual will to stay in business. What happens to them in the long term is anyone's guess. Do they get bought out by a larger chain? Does one of the wholesalers buy them out and run them as corporate stores? Do they ESOP the chain? There are a lot of things that could happen. At this point, I think they are going to stay in business in some form. 10-12 years ago I did not think that. I though they were dead chain walking 10-12 years ago. But if you look at them objectively now vs. 10-12 years ago they have actually made quite a number of improvements on mix, price, and overall store appearance/quality.

Will they ever be a revolutionary chain that people wish would expand into their market area? Will we see them opening new 80k square foot prototypes? Will we see them trying cutting edge technology? Probably not.
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Re: Winn Dixie back on expansion/remodel campaign

Post by Romr123 »

They have the good fortune of being in a growing part of the country....see what they did parceling out Bi-Lo. Had they been in a slower-growth area (Midwest)...they'da been toast (see how far fading #2/#3s in a low-growth region get you...Shop and Save in St. Louis/Dominicks in Chicago)
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Re: Winn Dixie back on expansion/remodel campaign

Post by buckguy »

Romr123 wrote: September 12th, 2021, 6:29 am They have the good fortune of being in a growing part of the country....see what they did parceling out Bi-Lo. Had they been in a slower-growth area (Midwest)...they'da been toast (see how far fading #2/#3s in a low-growth region get you...Shop and Save in St. Louis/Dominicks in Chicago)
Location didn’t exactly help them in the past. Being in a growing area means you have to be able to spend money to expand. A laggard can’t do that. My example of First National was in one of the slowest growing areas of the country—-competence and cash go a long way along with having a distinctive product. A niche chain like Wegmans has done well in all kinds of places because they know what they are doing and have something to offer.
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Re: Winn Dixie back on expansion/remodel campaign

Post by storewanderer »

buckguy wrote: September 12th, 2021, 7:54 am
Location didn’t exactly help them in the past. Being in a growing area means you have to be able to spend money to expand. A laggard can’t do that. My example of First National was in one of the slowest growing areas of the country—-competence and cash go a long way along with having a distinctive product. A niche chain like Wegmans has done well in all kinds of places because they know what they are doing and have something to offer.
Being in a growing area with higher barriers to entry can absolutely help a below average and stagnating chain. You can have your marginal, just getting by, 25 year old, never remodeled beyond a coat of paint around the walls, store sitting there. As the area surrounding said store starts to become more dense with higher density residential developments and other changes, suddenly your marginal store is sitting in the middle of an area with many more potential customers and there isn't anywhere for similar competitors to show up and open (or said competitors have already come and gone). Your store wasn't really bad per se in the plant- it was well located, a good size, good parking lot, etc. It was just poorly run due to bad merchandising, bad execution, bad pricing, whatever. Now you have more customers so you do an actual formal remodel to the store, maybe you even add some features. Suddenly those marginal stores that looked like they were just scraping along, are now doing quite well.

I am watching this happen with Save Mart in my area over the past few years- this is exactly what has happened with 2 of their Reno Stores.
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Re: Winn Dixie back on expansion/remodel campaign

Post by Romr123 »

If there was a geography more appropriate for keeping relevant a marginal operator, Florida would be it...
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