Winn-Dixie Relaunches Corporate Brands

JACKSONVILLE, Fla. -- In a bid both to help "rebuild trust in the Winn-Dixie brand" and improve profitability, Winn-Dixie Stores, Inc. here said yesterday it is completely redesigning and relaunching its corporate brands program, with the goal of having at least 1,000 redesigned SKUs on shelves by the end of fiscal 2008.

"Today 150 of our corporate brand products in the store feature newly redesigned packaging," said chairman, c.e.o., and president Peter Lynch, during a conference call in which the retailer also reported improved performance for the full-year fiscal 2007.

"In fiscal 2007, our corporate brand penetration rate for the categories we measure was 19.1 percent, compared to 18.1 percent in the prior year. Our target for 2008 is to increase that penetration rate by an additional 140 basis points," Lynch noted.

To support the relaunch, Winn-Dixie has begun issuing an internal newsletter to help educate associates about the existing and new private label products so they can recommend those items to customers, Lynch said. The retailer is also upgrading in-store signage, using FSIs, and increasing the presence of its corporate brands in weekly circulars.

Winn-Dixie's corporate brands program has included three tiers since the early 1990s, but the relaunch brings a new name to the premium tier: Winn & Lovett, which is a nod to the grocer's historical roots.

The Winn & Lovett tier will include specialty coffees, freshly baked gourmet breads, and fine baking and cooking items such as olives and special oils, Winn-Dixie spokeswoman Robin Miller told Progressive Grocer.

Thrifty Maid, its "good product line," is designed to match national and regional value brands in quality, while Winn-Dixie, its "better line," is designed to be equal to or better than comparable regional or national brand category leaders. The Winn-Dixie tier currently accounts for approximately 85 percent of the company's corporate brands, Miller said.

With regard to its year-end results, Winn-Dixie yesterday reported adjusted EBITDA of $85.9 million for the year ended June 27, compared to a loss of $27.8 million for the previous year.

The retailer also achieved gross margin of 26.9 percent compared to 25.9 percent for the previous year, and an identical store sales increase of 1.6 percent.

Net sales in fiscal 2007 were $7.2 billion, an increase of 1.0 percent. Its net income was $300.6 million, compared to a loss of $361.3 million in the prior fiscal year.

"The 2007 fiscal year marked an important turning point for Winn-Dixie," said Lynch, "not only because the company emerged from Chapter 11 last fall, but also because we made significant progress in the initial stage of a multi-year turnaround plan. We built a strong foundation to support the implementation of our five key initiatives: rebuilding trust in our brand, investing capital in our stores, merchandising for the neighborhood, training and developing our associates, and achieving profitable sales."

For the fourth quarter, net sales amounted to $1.7 billion, an increase of 1.5 percent, Winn-Dixie said. Identical store sales from continuing operations were up 1.3 percent, while net income was $20.6 million, as compared to a loss of $17.2 million in the fourth quarter last year.

Winn-Dixie said its store remodel program is on track, with 20 remodels completed in fiscal 2007. On a weighted average basis, recently completed remodels experienced an aggregate sales lift of approximately 12 percent in the period after completion of grand opening promotional activity, Lynch noted.

"The store remodeling program is one of our most important initiatives," he said.

The chain aims to remodel 75 stores annually, Lynch added. Twenty-five stores will be remodeled in the first half of fiscal 2008, and the remaining 50 remodels are slated for the second half of the year, he said. The majority of these remodels will be in its home state of Florida, Lynch said.

Winn-Dixie operates 520 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi.
-- Jenny McTaggart
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