JACKSONVILLE, Fla. — Winn-Dixie Stores had a potential opportunity to add 49 stores across Florida when Albertsons LLC put them up for sale at mid-year, but the stores were ultimately purchased by Publix Super Markets, Lakeland, Fla.
Asked if the chain had any interest in acquiring the Albertsons locations, Peter Lynch, Winn-Dixie's chairman, president and chief executive officer, told SN, “That's water over the dam. But what the sale did was rationalize the marketplace without us having to pay a dime.”
Some observers said Winn-Dixie did the right thing by not going after those stores.
“It was more important for Winn-Dixie to spend the money remodeling its existing fleet, because that will provide a higher return than those Albertsons stores would have,” said Chuck Cerankosky, an analyst with FTN Midwest Securities, Cleveland.
Karen Short, a New York-based analyst with FBR Capital Markets, Arlington, Va., offered a similar opinion. “I'm glad Winn-Dixie didn't take those stores, especially at the price Publix paid — roughly $10 million per store. Maybe cherry-picking a few would have been nice, but I'm glad they didn't use up all their cash capabilities for those stores.”
However, Gary Giblen, executive vice president at Goldsmith & Harris, New York, said he thinks Winn-Dixie should have pursued the acquisition.
“Winn-Dixie says eliminating a competitor neutralizes the change in the market, but to me, it's just adding more soldiers to Publix's army, which is a negative for Winn-Dixie,” he said.
Lynch said the addition of 49 more Publix locations would not affect Winn-Dixie that much, since only 10 of the 49 are within a two-mile operating radius of a Winn-Dixie store that did not already compete with an existing Publix.