Tuesday, January 20, 2015

This Just In - Kroger may attempt to buy Winn-Dixie - Again!

     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
     I'll be sure to keep everyone posted on any updates and official announcements. If Winn-Dixie is willing to sell, this also would be a great opportunity for Albertsons to make an offer and get back in the Florida game, or at least pick up some more stores. Albertsons has been big on acquisitions recently to keep their store base afloat, plus they'd also get Winn-Dixie's distribution network, and extra stores in their strong Central Louisiana market. The chances of that happening are probably very slim, but I can still hope, right?

Anyway, until next time,

The Albertsons Florida Blogger      

Sunday, January 4, 2015

More Kroger Florida Developments

     The official announcement of Kroger coming to Florida may be getting closer than everybody thought as we kick off the New Year on The Albertsons Florida Blog. According to the Florida Business Observer, a Tampa based business newspaper, Kroger has been looking at potential store sites north of Tampa and in the Fort Myers area. This news comes from a commercial real estate broker who has been working with Kroger recently. Last March, Kroger made a public announcement that they were in the works to enter a new market they currently don't have a presence in, which could only be three possible regions in the nation: The Northeast (which is already highly competitive and over-saturated with grocery chains), The Upper Midwest (The Dakotas, Minnesota, and Wisconsin) or Florida. Over the past few years, Kroger has dropped some hints that Florida would be the most likely region out of those three that they would want to enter. First of all, Kroger is building a brand new, state of the art distribution center in Georgia to service their Southeast and Delta Region stores, which would be perfect to handle a Florida expansion. Not only that, but Kroger has tried to buy Winn-Dixie twice (in 2000 and 2005), with both buyouts unsuccessfully going though. I don't think Kroger ever wanted to leave Florida the first time back in the late 80's, however the supermarket industry in Florida was so overcrowded back then, it just wasn't worth it for Kroger at the time. Now with everything weeded out, Kroger could possibly compete successfully with Publix, who they already coexist with in the highly competitive Atlanta market. Publix currently has a 43% market share of the Florida supermarket industry, with Walmart in second place with 29%, and Winn-Dixie at 14%, according to the Motley Fool (who has a very good article about Florida's polarized supermarket industry and the fall of the middle of the road chains if you follow the link). If Kroger enters Florida, that could really shake things up. Publix is very protective of their home turf in Florida, and they are currently fighting a war with Walmart. While it would take a lot to dethrone Publix from the top, modern Kroger stores have a Publix like shopping atmosphere that will probably go over well with Florida shoppers, and will bring some much needed competition to the Sunshine State, something we've been lacking with the recent fall of stores like Albertsons, Food Lion, and Sweetbay. And most importantly, Kroger will fight with Publix, unlike those other chains have.  

     As usual, Kroger is keeping quiet about any official announcements that they may be coming to Florida soon, and they aren't responding to anyone's questions or comments about the topic. I also discovered this ad on Facebook left by a Realtor looking for investors in Publix and Kroger anchored shopping centers in the Tampa area. I'm pretty sure Kroger is coming to Florida, and all of you Kroger fans out on the West Coast of the state may not have to wait much longer to shop there. I'll keep everyone posted if I find out any more about Kroger's possible expansion into Florida.

So until next time,
The Albertsons Florida Blogger