Portnoy Seeks to Strengthen Winn-Dixie Brand

ELLIOT ZWIEBACH

JACKSONVILLE, Fla. — Dan Portnoy, chief merchandising and marketing officer at Winn-Dixie Stores, is obsessed with retail.

“On a business trip or a family vacation, I drag everybody into any retail store I see — a clothing store, an electronics store or whatever,” he told SN.

Portnoy, 51, who served as president and chief executive officer of Kings Super Markets, Parsippany, N.J., from 2004 to 2006, joined Winn-Dixie here in mid-2007 after being out of retail for several months, during which he worked as a self-employed consultant as well as a part-time golfer and family cook.

“But I was looking for a challenge and a new opportunity, and I wanted a chance to run a bigger company [than Kings] and felt Winn-Dixie seemed like it would be a good platform,” he said. “Plus, I had heard a lot about Peter Lynch's abilities, and I was intrigued.”

Lynch — Winn-Dixie's chairman, president and CEO — “is a phenomenal leader,” Portnoy added, “who has given me the ability to formulate a marketing plan and a management team.”

The chain's biggest challenge, he told SN, is to make the stores more competitive as the number of remodels increases, to give Winn-Dixie the ammunition to attract more customers.

“We're moving forward with store remodeling, neighborhood marketing and strengthening the brand, because the challenge is really about changing our image with consumers and having it stick so we can get them to change their buying habits and switch to Winn-Dixie,” Portnoy explained.

“Especially in this economy, which will be with us for at least the next 12 months, consumers are looking for value, and that's what we're offering.”

Portnoy said he believes Winn-Dixie is beginning to meet the challenge.

“It takes awhile to change people's shopping habits, but we're getting a fair share of new customers, and we're growing our market share, which is a key barometer of our success.”

A related challenge involves changing the chain's image among suppliers, Portnoy said, and he believes the chain is making progress there as well.

“We tell suppliers this is not your mother's Winn-Dixie — it's a different place, and what we're doing with store service and merchandising is different than what we used to do,” he told SN.

“And since our merchandising is much better, it's easier to get them to listen, because we're walking the talk and delivering on what we've been telling them.”

Neil Stern, a senior partner with McMillan Doolittle, Chicago, told SN that Portnoy is well suited to deal with the challenges Winn-Dixie faces.

“Dan is obviously a very accomplished marketing guy, and looking at what he faced at Kings — which involved turning around a small company that had a tired store base and severe capital constraints — is like a microcosm of what Winn-Dixie faces. So he's lived that and was able to keep Kings in motion, and that's the skill set he brings to Winn-Dixie.”

According to Portnoy, “Having already been a CEO myself, I feel I have a unique perspective on understanding the kinds of situations and complexities that might arise and how everything ultimately fits together — something you really only get when you're at the top of an organization — and I believe I've been able to use that understanding to Winn-Dixie's benefit in some of the things I've tackled.”

Portnoy's responsibilities encompass marketing and consumer research, procurement and merchandising, category management, neighborhood marketing, pricing, private label and pharmacy, and he's also involved in the remodeling and store design program.

His initial challenge, he told SN, was to reorganize the merchandising team that was in place when he arrived — which he did primarily by going outside Winn-Dixie, to companies like Wal-Mart, Wegmans and Safeway, to hire new personnel — “people from companies with good brand images who understood the consumer and the complexities of a large company,” he explained.

Although he was reluctant to talk about pricing strategies, Portnoy acknowledged that Winn-Dixie has revamped its approach “to bring more value to consumers in the products we carry. In the past, responsibility for pricing had been scattered all over the company, but now we've consolidated it under one executive.”

As part of the effort to offer more value, Winn-Dixie has become smarter in how it communicates, Portnoy added. “One key challenge was gross margin — we were not hitting the targets a company of this size needed to hit,” he explained.

Those shortfalls have been eliminated by using a smoother, more balanced approach, Portnoy pointed out, and during the five complete quarters he's been at Winn-Dixie, all have been profitable — except for last year's fourth quarter, when Winn-Dixie became too promotional in what it has since acknowledged was an overreaction to competition.

Winn-Dixie had just started its remodeling program when Portnoy got there, he said, “but other than a Hispanic cluster, most merchandising was similar for the disparate consumer groups we served.

“We had always played to the blue-collar consumer, and as we remodeled, we were not always putting in the best merchandising programs for the neighborhood, so we developed a neighborhood marketing program to appeal to urban, affluent, resort and kosher segments of our customer base along with the Hispanic segment,” he explained.

Winn-Dixie has also developed a new discount format called SaveRite, geared to the low-income urban consumer, he added.

Portnoy said what he brings to Winn-Dixie is “energy, enthusiasm and drive.”

“I don't play my cards close to the vest. I'm a very open, direct guy who doesn't beat around the bush,” he said.

In what free time he has, Portnoy likes to be with his family or head out to the golf course. He also raises money for the Juvenile Diabetes Research Foundation, of which he is a director and former president.

Portnoy, who began his career at Star Markets, Boston, was working for Shopwell's Food Emporium in New York as a sales manager when the company was acquired by A&P; remaining at A&P, he was instrumental in launching the chain's Master Choice premium line.

He left A&P in 1990 to join Daymon Associates (now Daymon Worldwide) as group vice president, operations, overseeing European operations, and in 1995 he moved to Canada to oversee sales and marketing for Cott Beverages.

Because of his longtime admiration for Marks & Spencer, the U.K.-based retailer, Portnoy moved to Kings when M&S purchased it in 1998, starting as senior vice president, merchandising and marketing, and ending his career there as president and CEO.