Winn- Dixie not closing

Published 12:00 am Saturday, May 1, 2004

Winn-Dixie Inc. announced Friday that it will close or exit 156 stores and let 10,000 employees go, but for now, the Greenville store remains safe.

Winn-Dixie will operate a streamlined core of 922 stores across 36 sales districts in Florida, Alabama, Louisiana, Georgia, and certain areas of North Carolina, South Carolina, Mississippi, and Tennessee.

According to a manager at the local store, who would only identify himself as Josh, the Greenville store is not on the closing list.

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&uot;From what I understand, Winn-Dixie is closing 46 stores throughout Alabama and the Greenville store is not one of them,&uot; he said via phone Friday afternoon.

Attempts to reach the district manager for the Greenville store were unsuccessful.

&uot;We are going to get a remodel in the near future and that is going to be all,&uot; Josh said at the local store.

Joanne Gage, a public relations specialist with Winn-Dixie, said no announcement on what stores will close in Alabama.

&uot;Alabama has been identified as one of our core markets and we are not announcing any closings there,&uot; she said.

The company plans to close stores in Bowling Green, Ky., Cincinnati, Ohio, Evansville, Ind., Greenville, Miss., Greenville, N.C., Lexington, Ky. Louisville, Ky., Memphis, Tenn., Myrtle Beach, S.C., Nashville, Tenn. Norfolk, Va., Paducah, Ky., Richmond, Va., Roanoke, Va., Wilmington, N.C.

According to a statement on the company’s website, Winn-Dixie will try to sell stores as ongoing businesses and anticipates that stores that cannot be sold will be closed.

Winn-Dixie’s stores are concentrated in the U.S. Southeast, where Wal-Mart Stores Inc. has been opening dozens of supercenters with full-line grocery stores. Winn-Dixie caters to middle-and lower-income consumers, the same customers that Wal-Mart targets.

&uot;The company is in a fight for its life and the outcome is far from certain,&uot; said analyst Robert Campagnino of Prudential Equity Group recently about Winn-Dixie’s decline.

These troubles are not new for Winn-Dixie that began faltering in the late 1990s after &uot;Big Box&uot; rivals began expansion across the southeast.

Winn-Dixie let its older stores continue downward while focusing on the new, larger Marketplace grocery stores.

Winn-Dixie was once considered the grocery powerhouse in the Southeast, but is now overshadowed by Wal-Mart as it continues its march across the area where Winn-Dixie was once the grocery king.

It is not a commonly known fact that Wal-Mart and Winn-Dixie once had close ties.

When Wal-Mart opened a new store, Winn-Dixie often followed, usually opening next door, if not in close proximity.

Such was the case when Wal-Mart arrived in Greenville.

A new Marketplace was built next door to the new Wal-Mart on Interstate Drive and the existing Winn-Dixie store in the Butler Square Shopping Center closed.

According to a timeline provided by Winn-Dixie, the early 1980s was considered a time of &uot;moving ahead&uot; and &uot;building community ties.&uot;

This was also the same time period when Wal-Mart founder Sam Walton sat on board of directors for Winn-Dixie from 1981-1986.

Shortly after leaving the board, Walton’s company opened its first supercenter.

Winn-Dixie said it would streamline operations within the next 12 months in a bid to cut costs.

&uot;This was a difficult decision, but it is a necessary part of our strategic plan to restore Winn-Dixie to consistent profitability,&uot; said Frank Lazaran, the company’s president and chief executive officer. &uot;We will make every effort to ensure a smooth and fair transition for affected (employees).&uot;

The company reported Friday a 5.5 percent decrease in first quarter sales, to $2.7 billion. For the 40 weeks ending March 31, sales were down 5.8 percent for the identical period last year, to $8.9 billion.

Winn-Dixie also said it will pursue the sale of its Dixie Packers, Crackin’ Good Bakery/Snacks and Montgomery Pizza manufacturing operations.

The grocery chain, which in January had suspended its dividend indefinitely, said it expects annual pretax savings of $60 million to $80 million due to the restructuring.

Winn-Dixie also said it expects to cut costs by $15 million in fiscal 2004, and about $100 million in fiscal 2005.