Supermarket bankruptcy
Winn-Dixie, once the #4 US supermarket chain in number of locations and once the leader in the US South, recently declared Chapter 11 bankruptcy. The 80-year old chain which also owns the Buddies, Foodway, SaveRite, and Thriftway brands, has 920 stores, having closed over 200 in the past decade and slipped to #14 in sales. The company plans to sell of 156 more stores, and looks to be spiraling down fast. The smaller company will have less clout over vendors and less marketing money.
The company has lost money as it goes head-to-head against Wal-Mart through its whole territory. The reason: Wal-Mart prices are significantly lower than Winn-Dixie's. And it can be argued that the company is the architect of its own downfall - the company gave a $1.5 million retention bonus to its CEO shortly before declared Chapter 11, not a very cool move. It has also, according to reports, never firmly decided whether it would compete by being an upscale vendor or a discounter.
Yes, the market is being efficient and punishing the weaker companies. Many smaller regionalchains are being run out of business and even the big ones like Kroger and Safeway trembling. Other deeply troubled chains include A&P, Penn Traffic (Northeast) and Eagle Food Centers (Midwest). Wherever Wal-Mart turns it attention, competition and variety are being sucked out of the industry. The Winn-Dixie move is just another milestone in the rise of Wal-Mart, which got into the supermarket business in the late 1980s and has grown to be #1 and is still rapidly expanding.
6:50:56 PM 
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