David Livingston

Winn Dixie: Why the Market Is Wrong Again

What was not mentioned is that Winn Dixie operates some of the lowest sales per sq ft grocery stores in the United States. Perhaps there is one chain doing worse, but not much worse. Winn Dixie continues to operate stores 30% below market average on sales per sq ft. Market share is declining. This analyst is only going by Winn Dixie's cooked books, press releases, and the bull crap management is feeding him

Analysts Can't Agree on Grocery Sector Outlook

I agree that the analyst all have their own agenda and many are regularly wrong.

Unfortunately for the analysts, the grocers that are doing the best are privately held. The smartest people in the industry typically work for the best run privately held grocers.

The stock market, individual grocery stocks, and how well a grocery is actually doing operations wise, are much of the time mutually exclusive events. A grocer can be doing quite well, but if the stock is selling off, the price dives. A grocer can be doing poorly but if some analyst can find a reason to promote the stock, they will, and the price will rise for a day or two.

Many analyst only make their assessments on public documents, conference calls, and executive interviews. Those are probably the three worst sources of information.

Winn Dixie's Roller Coaster Ride

Do some more math. Market share is plummeting. Sales are not increasing faster than inflation and population growth. Competitors continue to open stores while Winn Dixie does minor remodels. Remodeled stores only get 9% lifts. This is terrible considering Winn Dixie probably is the lowest sales per sq ft supermarket chain in the country. Nine percent of nothing is nothing.

Competitors are targeting the few successful stores to build new stores nearby. The assumption is that if Winn Dixie is doing well, there is plenty to go around and it will be like taking candy from a baby. They view Winn Dixie as an ineffectual competitor that will not be able to respond defensively.

Watch Winn-Dixie Dance

Yep, those plastic bottles are going to save Winn Dixie from the onslaught of more Wal-Marts, Publix, and Aldi. Compound that with the fact that Winn Dixie has never been a good operator and never will be. Definitley another bankruptcy coming. You can't add a coat of paint, some new carts, and expect shoppers to suddenly stop shopping at superior competitors.