JACKSONVILLE, Fla. -- Bolstering its "Low Price Leader" value strategy, Winn-Dixie Stores here last week slashed prices on more than 3,000 items in its 1,178 stores -- its largest rollback since introducing everyday-low-pricing 10 years ago.
Winn-Dixie officials announced the plan, called the "Low Just Got Lower" program, at the company's annual meeting here last week. The price cuts stretch across all product categories and include national and private labels, spokesman Mickey Clerc said.
Each of the company's 11 divisions will decide which items will be marked down and by how much, Clerc told SN. Yet one category has already been targeted: Salty snacks will be sold chainwide for 15% less than the suggested retail price, he said.
The price rollback, coupled with planned capital projects and merchandising campaigns, is expected to fuel financial growth and lift sales and earnings, which saw only slight gains in the first quarter, President James Kufeldt told shareholders. (See story on Winn-Dixie's first-quarter report, Page 8.)
"We were disappointed with our first-quarter results, which also impacted our expense ratio. Our 'Low Just Got Lower' retail price-reduction program is designed to improve this sales trend," Kufeldt explained. "Along with more aggressive merchandising and controlling of expenses, we feel our results will improve during the remainder of the year."
The "Low Just Got Lower" program extends Winn-Dixie's current EDLP approach, he said at the meeting, noting that the chain lowered prices on 1,000 health and beauty items in 1992.
"We are committed to remaining a low price leader. This has been our philosophy since we embraced the everyday-low-price concept in 1986," Kufeldt told shareholders. "By holding the line on expenses and working with suppliers to lower merchandise costs, we were able to announce this latest action to help our customers continue to save on their total food bill. Our consumer research shows that customers today want lower prices whenever they shop, not just on special sales days."
Winn-Dixie began the new pricing program Sept. 29 in its Midwest division, with the other divisions following suit later in the week, Clerc said. Products and price cuts will vary according to local buying patterns and tastes, but the overall program will be supported by advertising in various media, in-store displays, shelf-tags, circulars and other marketing vehicles, he added.
Though declining to say how successful the program has been in its first week, Clerc said the company hopes to see some immediate results in terms of increased business and market share. He would not elaborate on whether the company has set a time frame to track the program's effect. "One of the things we are trying to do is grow our business and gain some new business. We would like to see increased sales once the ads break," Clerc said. "The truth is, it will take some time, but we expect to see some positive results immediately."
Winn-Dixie also is continuing with its capital projects. The company has budgeted about $390 million for capital expenditures in the 1997 fiscal year, 7% more than last year. Supermarket plans include 75 new stores and 110 store renovations.
Other capital plans include a 1 million-square-foot expansion of the chain's Orlando, Fla., grocery warehouse; construction of a new distribution center in Raleigh, N.C., to replace an older facility, and a 90,000-square-foot enlargement of its corporate headquarters. Construction for the North Carolina building began last week, and the headquarters project should be completed by the fall of 1997, Clerc said. He was uncertain of the completion date for the Orlando facility.