Dive Brief:
- Southeastern Grocers will close 20 stores in its Winn-Dixie and Harvey’s footprint, according to Supermarket News. The Jacksonville, Fla.-company also is considering laying off a number of store-level department heads. The publication reported that Southeastern is in talks to refinance its debt.
- The Jacksonville, Fla.-based retailer said the closures were part of a customary portfolio review and in some cases accompany lease expirations or the effects of renovations of neighboring stores. Southeastern Grocers, whose operations also include Bi-Lo, said two Winn-Dixie stores shuttered following flooding in Louisiana will not reopen.
- “From time to time, the successful execution of our strategy will require us to make the difficult decision to close stores,” Southeastern Grocers spokesman Joe Caldwell told Supermarket News in an email.
Dive Insight:
It seems each month a new retailer is announcing store closings and analysts warn that the rise of online grocery stores, Amazon and discount retailers entering the space more heavily may lead to further closings in the months ahead. Whole Foods announced in February it will close nine stores, while Central Grocers, which filed for Chapter 11 bankruptcy last week, has announced plans to sell some stores and close others. And Kroger announced in March it will cut new-store development, store expansions and relocations in 2017 by 35%.
Those following Southeastern Grocers might see the move as a surprise as the retailer has been moving in an upward direction the past year, renovating stores, starting new flagships and reaching out to niche markets, such as its Fresco Y Mas for the Hispanic consumer.
Leadership at the company said the closings have more to do with a strategic portfolio review than with any perceived trouble, and many of the stores shutting down were close to having their leases expire or were in areas where new stores entered the space. A spokesperson for Southeastern Grocers said sometimes “less is more” and the move is expected to be a good thing for the company as a whole.
With multiple challenges facing grocery stores, companies that are more in tune with customers demands or not saddled with high debt levels are most likely to survive. It remains to be seen just where Southeastern Grocers, which reportedly is in talks of refinancing its debt, will end up. The company has not sat idle amid sweeping changes in the industry, and that at least gives the supermarket operator a fighting chance that has evaded some of its competitors.