Winn Dixie plans store cuts
Published 12:00 am Saturday, February 7, 2004
With its recent financial disappointment in the latest quarter, Winn Dixie Stores, Inc., which owns and operates 1,078 stores in 12 Southeastern states, including one in Greenville, announced plans earlier this week to trim $100 million costs by July 1, which would include closing some of its stores.
Winn Dixie, founded in 1925 was once among the most profitable U.S. grocers but has seen its market share eroded by other warehouse grocery discounters, including Publix and, most notably, Wal-Mart.
While the fate of the Greenville store has yet to be determined, Winn Dixie’s director of public relations, Kathy Lussier, said the company is in the process of reviewing all stores and that a list of stores that will be closed should be released in April.
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&uot;We will be taking a second look at locations to determine what markets we could experience growth in and what markets we may need to scale back,&uot; Lussier said. &uot;But there is no list yet that I can tell you about.&uot;
With Super Wal-Mart set to open in Greenville by mid-year, speculation is that Winn Dixie may not be able to compete with the global discounter. A recent study by the Mississippi State University Extension Service on the impact a Super Wal-Mart has in smaller metropolitan market seems to indicate Winn Dixie, and other grocers, may have a tough time competing.
Mississippi, as it turns out, made for a good comparison of the before and after affects of a Super Wal-Mart on a host county because all food items are subject to sales tax in Mississippi unlike other states where similar studies have been done.
The results were dramatic. The comparison found that when a Super Wal-Mart came into a county, on average, existing food stores showed a 10 percent decrease in sales the first year after the Supercenter opened. On a cumulative basis the decline continued and five years after the opening, average food store sales from existing stores were nearly 17 percent lower compared to the year prior to the Supercenter’s opening.
While the study cast a bleak picture for grocers, it did show that overall county sales did increase following the opening of a Supercenter from 3.1 percent in years one and two to nearly 10 percent in years three and four before settling back to four percent in year five.
Lussier said that when Winn Dixie reviews each market, competition will be a factor, but it won’t be the only factor they look at.
&uot;Every market we have stores in we have competition,&uot; she said. &uot;As any business would, we take a look at the competition, whether it exits or whether it doesn’t exist and that can play a factor in a decision, but it’s certainly not the only factor in whether we would make a change in any market we’re in.&uot;
Even before its arrival Greenville residents were singing Wal-Mart’s praises.
&uot;I would probably give Super Wal-Mart a chance,&uot; said shopper Barbara Scott. &uot;If I didn’t find what I wanted I would probably come back to Winn Dixie, but I would give them a shot.&uot;
Another shopper wasted little time in stating where her business would go.
&uot;I would go straight to Wal-Mart, &uot; said Kate Perry. &uot;It would be convenient to be able to get all of the things that you need in one stop.&uot;
Local managers at Winn Dixie refused to comment on the possibility of their store closing and referred all questions back to the corporate office.