CINCINNATI -- Winn-Dixie Stores, Jacksonville, Fla., completed its acquisition of Thriftway Food Drug here last week -- reportedly for a price of $150-200 million in Winn-Dixie stock, industry observers said.
With the completion of its acquisition of the 25-unit Thriftway chain, Winn-Dixie is expected to spend the next year fine-tuning the operation to position itself for the entry of Meijer supercenters into this market in about a year, observers told SN.
Thriftway was purchased from the Lindner family, which founded the chain in 1958. Winn-Dixie officials declined to pinpoint the acquisition price. Richard E. Lindner, Thriftway chief executive officer, has left the company, along with the chain's former top management team.
The Thriftways are Winn-Dixie's northernmost group of stores. Mickey Clerc, Winn-Dixie's director of public relations, said Winn-Dixie will retain the Thriftway name on all existing and future locations in the Greater Cincinnati area.
This includes two Thriftways under construction in Ohio and two stores under construction in Florence and Newport, Ky., that Winn-Dixie had originally intended to open under its own banner, Clerc said. The two Kentucky stores will open in mid- to late summer, he added.
Thriftway operates a store across from the new-store site in Florence, but no decision has been made on how that situation will be resolved, he noted.
"Our first goal was to complete the acquisition," Clerc told SN. "Now that we have done that, we will study the alternatives on how to operate the Thriftways as efficiently and as well as we can."
Most people here are aware that the Thriftways have been sold to Winn-Dixie, but Winn-Dixie does not plan to mention the change of ownership in its ads.
Other than adding its aged beef program to Thriftway almost immediately and eventually adding some Winn-Dixie private-label items, the new owners don't intend to make any significant alterations in the Thriftway operation, Clerc said.
Observers told SN that Thriftway generates annual sales of approximately $400-450 million and controls a market share here estimated
at nearly 22%, compared with 44% for Kroger Co., which is based here.
Rather than destabilizing the market by going after Kroger, Winn-Dixie is more likely to attempt to protect its store base prior to the entry of Grand Rapids, Mich.-based Meijer here next year, Ed Comeau, a securities analyst with Lehman Bros., New York, told SN.
He said the addition of the Thriftway stores looks like a good fit for Winn-Dixie. "Thriftway has a strong reputation for service and quality in the Cincinnati market, and its store base there is not in need of renovation or upgrading. Also, Winn-Dixie has ramped up its store program toward larger food and drug combos, similar to those operated by Thriftway."
The stores are of comparable sizes, Clerc noted: an average of 48,000 square feet at Thriftway, compared with a range of 45,000-52,000 square feet for new Winn-Dixie stores.
In terms of price image, both Thriftway and Winn-Dixie portray themselves as "the low-price leader" in the markets in which they operate.
The Thriftway stores will operate as part of Winn-Dixie's 60-store Midwest division, based in Louisville, Ky., which oversees stores in Kentucky, Tennessee, Indiana and now Ohio.
According to Clerc Thriftway will continue to be serviced by Super Food Services, Miamisburg, Ohio, for the immediate future.