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No Middle Ground

"The grocery segment is extraordinarily healthy. The lone exception to that, of course, is Winn-Dixie, and we're all keeping our fingers crossed that they will survive the financial problems that they've got."

Rick McAllister
CEO, Florida Retail Federation

Two chains continue to dominate Florida's hypercompetitive supermarket industry. Longtime leader Publix -- which registered a 9% earnings increase for the third quarter of 2005 -- claims a 41% share of the market by catering to quality-oriented customers. Wal-Mart, meanwhile, dominates the budget-conscious crowd. The future is less clear for stores that fall somewhere in the middle, including Winn-Dixie, Albertsons and Kash n' Karry, which is undergoing a transformation to Sweetbay Supermarkets.

Winn-Dixie, the eighth-largest food retailer in the U.S., filed for bankruptcy protection in 2005 and announced a plan to sell or close 326 stores. The company, which reported a net loss of $833 million in fiscal year 2005, hopes to regroup through aggressive marketing and merchandizing and by focusing on customer service. Kash n' Karry's changeover to Sweetbay shows early signs of success as a more upscale grocer. Albertsons is in a state of flux: The company sold its seven stores in Jacksonville in April and then in September announced it was "exploring strategic alternatives" that could include the sale of the company.

Nevertheless, given the steady influx of wealthy Baby Boomers and Winn-Dixie's uncertain future, Florida still appears "under-supermarketed," says Barton Weitz, executive director at the Miller Center for Retailing Education and Research at the University of Florida. Weitz predicts success for ethnic-oriented supermarkets, such as Publix Sabor in south Florida and "extreme-value food retailers" that underprice even Wal-Mart. "Save-A-Lot and now Family Dollar and Dollar General are selling a lot of grocery-type products and deal with a lot of rural and suburban markets," says Weitz.

Florida's Chains

  • Publix - 635 Florida stores
  • Winn-Dixie - 387 Florida stores
  • Wal-Mart - 170 Florida stores (includes eight Neighborhood Markets and 39 Sam's Club stores)
  • Albertsons - 119 Florida stores
  • Kash n' Karry / Sweetbay - 87 / 22 Florida stores
  • Fresh Market - 14 Florida stores
  • Whole Foods - 8 Florida stores (plus 4 under development)

Sources: Individual companies

Shopping Around

Consumers are shopping less often at traditional grocery stores, according to ACNielsen. In 1995, the average American made 92 trips to the grocery. By 2004, that number fell to 69. Supercenters, meanwhile, have seen the most dramatic increase in number of shopping trips, while dollar stores have witnessed the strongest long-term growth.

Source: ACNielsen Homescan 52 weeks ending 12/25/0
For more information: acnielsen.com