From The Albertsons Florida Blog Newsdesk:
They say 3rd time's the charm, right?
News broke yesterday from a few Cincinnati area news outlets that Kroger is very much looking into making a push into Florida. All of the online speculation has now leaked to almost every news station and business paper in Florida, creating a media frenzy, with most signs pointing to another attempt by Kroger to purchase Winn-Dixie to make their grand Florida debut, again.
Cincinnati's WCPO-9 News and the Cincinatti Business Courier were the first to begin dropping hints about Kroger wanting to enter a new market, however the Courier just announced that Kroger is willing to make another large purchase, hinting at what may happen with Winn-Dixie. Kroger recently purchased North Carolina based Harris Teeter in 2014, who has one Florida store in Fernandina Beach near the Georgia line. That purchase is what started most of these Kroger Florida rumors. Kroger has said in recent comments that if it had not been for their recent purchases of Harris Teeter and Vitacost.com, they would have entered a new market sooner. That new market Kroger has been hinting at for a while now will most likely be Florida.
Before we talk more about this new attempt by Kroger to purchase Winn-Dixie, let's look at the last two attempts. Kroger's first attempt with purchasing stores from Winn-Dixie was in 2000, when they tried to do a partial buyout of Winn-Dixie by purchasing all of their stores (72 at the time) in Texas and Oklahoma, two of Winn-Dixie's weaker markets at the time. That purchase was blocked by the FTC. Then, after Winn-Dixie's crippling 2005 bankruptcy, Kroger once again tried to make a move to buy Winn-Dixie, this time for the whole chain. That deal later fell apart as Winn-Dixie started to emerge out of bankruptcy.
Now here we are in 2015. Winn-Dixie has 485 stores at the moment, with most of them in Florida. Kroger's purchase would also scoop up Bi-Lo and their 300 stores in the Carolinas. Winn-Dixie is back to more store closings at the moment, with stores in Boynton Beach, Lake Worth, and Lake Placid all closing as we begin the new year. Not to mention the 23 stores Winn-Dixie shed back in October. Winn-Dixie, although on a partial remodeling kick with some stores, just doesn't have enough money or backing to do much about really competing with Publix, Walmart, and the new specialty grocers that have been entering Florida recently. Winn-Dixie is still in a bad place ten years after the bankruptcy, and a buyout by Kroger can really shake things up.
Nothing is official yet, and both Kroger and Winn-Dixie are keeping things quiet. Big things are in store for the Florida supermarket scene in in 2015, and Kroger will most likely be a major part of that. If this Kroger/Winn-Dixie deal does go through, it is more than likely that the Winn-Dixie name will be retired in favor of the stronger Kroger banner. With much stronger Kroger in charge, Winn-Dixie's aging store base would get a major and much needed overhaul, something Kroger will have no problem providing chainwide, as Kroger is no stranger to a remodel rampage.
 |
| An aging Winn-Dixie store that's barely been touched since the 80's |
Anyway, until next time,
The Albertsons Florida Blogger
The Winn-Dixie name is tainted, but it's also a legacy brand. Looking at the Louisiana market, if Kroger goes in with W-D, it can get itself back into Louisiana and put Albertsons on the defensive, or buy up a bunch of dated stores and risk alienation, especially if consumers don't get on board with the Kroger card. Over in Florida, the situation is different, except there's no putting Albertsons on the defensive, but still risks things by dumping the name. It would be a gamble.
ReplyDeleteI know there are quite a bit of people still who won't step foot in a Winn-Dixie to this day due to bad experiences from over 10 years ago. The one thing a buyout of Winn-Dixie would do is get Kroger some prime real estate in areas like South Florida and Tampa Bay, where large lots to build a new grocery store on are extremely difficult to come by, and it would get them in the state in the #3 position. If Kroger was to dump the W-D name, the best thing for them to do would be convert some of Winn-Dixie's better stores right away to the Kroger name after a light remodel, and take another 2 years or so to phase out he rest of the Winn-Dixies as they remodel/close the remaining older stores that still give W-D their reputation for being and dirty and unpleasant. When Winn-Dixie converted the Sweetbay stores last year, they were quoted saying they wanted to keep all of Sweetbay's decor and layouts completely in tact in their converted stores to create the illusion that shoppers were still in their neighborhood Sweetbay, as they felt if shoppers thought they were in a Winn-Dixie, they would run off to Publix for their shopping. That really says something about what many people think about them. I think it would be split if the name were to go away. I'm sure people would be upset since a company that's been around since 1925 would be gone, but like I said before, I know many people would like to see Winn-Dixie get wiped out by someone else with a better reputation. As far as the card issue, Winn-Dixie also has one, so it wouldn't shock to people around here if Kroger came in with one also.
DeleteI don't think this going to happen with the announcement of Winn Dixies new president
ReplyDeleteIt seems like all the hype about this has died down now, and probably won't go anywhere anytime soon. Kroger will eventually come to Florida, although it seems like right now, they might just try to expand in naturally if they come anytime soon.
DeleteOK, good, Kroger's not buying Winn-Dixie, though I still think that Albertsons South has a chance at maybe buying a few locations (perhaps a few recently-vacated Florida locations!).
ReplyDeleteHowever, in regards to Sweetbay's purchase, I didn't come away with the conclusion that "if shoppers thought they were in a Winn-Dixie, they would run off to Publix for their shopping", it's the stigma of when supermarkets buy each other, things get changed. Store brands change, prices fluctuate, employees are managed differently, and eventually the décor homogenizes with other stores in the chain. It's happened to stores everywhere.
W-D is probably irreparably damaged, it has a history but the name is associated with, at best, a neighborhood grocery store. It's not nearly as venerable as Kmart or Sears (damaged as they may be), they've always been pigeonholed as having rinky-dink stores, and they've had a reputation for being overpriced. If anything, they shouldn't have tried to expand all the way to Texas and should have focused more on replacing their store stock when they still had cash. Personally, after the bankruptcy, they should've picked a new name.
Since Kroger is still holding off, I think that Albertsons should start to reopen some store sites and offer a decent Publix alternative that Winn-Dixie (or Walmart) can't offer. I'm a bit worried about the future of the system...I know Jewel-Osco has gotten lots of love and remodels in its post-SuperValu years, though Acme is still getting the short end of the stick. At least Acme has its own division, while Albertsons Florida will always be (at least in the next 5 years, at best) an isolated collection of stores controlled by a division miles away. I suppose it could be worse...Safeway's Hawaii stores are over 2000 miles from their home division in Northern California.
Actually, at one point Winn-Dixie operated stores as far out as New Mexico, Ohio, and the Bahamas (although in some cases not under the W-D name). The New Mexico stores were gone by the 80's, however the Ohio and Bahamas stores lasted into the 2000's. Winn-Dixie really did practically nothing to the Sweetbay stores they purchased other than change the sign on the front and restock the shelves. The new stores were reopened in less than a week in batches of about 15-20 at a time. I wish I can find the article with the quote of where I saw that about why they didn't want to change anything.
DeleteNow would be a great time for Albertsons to try reopening stores in Florida, but if that were to ever happen, I'm sure it would be after they straighten everything out with trying to absorb Safeway. I doubt Albertsons would ever became as large as they once were here about 15 years ago with 120 or so stores in operation, although I do hear more people saying they miss their Albertsons stores than they do their closed Winn-Dixies. Of all the non-native to Florida supermarket chains that tried to build a Florida division (that is, not counting Walmart), Albertsons was the most successful, and had the longest presence of anyone else. It was after the American Stores buyout in 1999 and the failure of Albertsons short lived Miami area push in 2001 that everything began to turn sour for them here, and they slowly began to back out after that.
I just hope this Safeway purchase will bring some positive change and even expansion to Albertsons, and not backfire like the American Stores purchase did. Acme has lots of potential, and I really think they should have taken advantage of Safeway closing down their Genuardi's division back in 2013, however that was back in SuperValu's days. Jewel-Osco has opened 5 new stores over the last year, on top of acquiring 4 more stores from Dominick's when Safeway shut them down as well, along with numerous remodels. Other than two tear down and rebuilds on the site of previously existing stores, Acme hasn't opened a new store since 2008, and I think their serious remodels have been limited to about 4 stores out of their 110 or so since they were reunited with the rest of Albertsons (based on what I've seen on the Acme Style Blog). But then again, from what I've seen, the 4 Florida Albertsons haven't been touched since the mid-2000's (although the Clearwater store may have gotten a very minor refresh in 2012).
I am worried about financial strain, but remember that American Stores came part of a massive expansion binge in the 1990s with the Florida, Houston, and Dallas divisions getting flooded.
ReplyDeleteAcme not getting the love like it should is probably a side result of the damage under SuperValu, and probably not funding issues. If funding was an issue, the first to go would be division consolidations.
New Rumor says that Albertsons is in negotiations to purchase Winn Dixie
ReplyDelete