Analyst On Grocers' Hurdles

HOLLYWOOD, FL-Winn-Dixie’s troubles might not be over. An analyst at the International Council of Shopping Centers’ Conference on Open-Air Centers here predicted that the bankrupt grocer may close as many as 100 additional stores or even file for Chapter 11 again after it emerges from reorganization.

Jacksonville, FL-based Winn-Dixie filed for bankruptcy last February and has since announced 326 store closings, leaving it with 587 units. “I expect them to definitely come out with another round of closings,” says Wachovia Securities supermarket analyst Bryan Hunt. “They need so much capital to fix their asset base, so when they do come back [from bankruptcy], they’re going to struggle immediately.”

Hunt and other industry observers spoke during a panel on the grocery industry that focused primarily on the marketshare traditional supermarkets have lost to emerging players in the sector, like discount and convenience stores, as well as high-end chains. In 1988, traditional supermarkets accounted for 90% of food sales, but now they only have half of the market, according to Hunt. “Every channel you look at is outpacing traditional supermarket growth,” he says.