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Finding your niche in the hyper-competitive supermarket business can be a challenge. Just ask the folks at Winn-Dixie. Owned by Jacksonville, Fla.-based Southeastern Grocers, the chain is up against perennial favorite Publix on the high end and one-stop Walmart on the low end, leaving it in what one industry observer calls “the muddled middle.” In an increasingly bifurcated marketplace, that’s considered no-man’s land.

“The main issue for Winn-Dixie is that it is a very also-ran supermarket,” says Neil Saunders, managing director-retail at New York-based GlobalData. “It’s not the most modern, it isn’t always the cheapest and it isn’t the most innovative. It’s just kind of OK. But in a cut-throat market, that probably isn’t enough to generate growth.”

‘The main issue for Winn-Dixie is that it is a very also-ran supermarket. It’s not the most modern, it isn’t always the cheapest and it isn’t the most innovative. It’s just kind of OK. But in a cut-throat market, that probably isn’t enough to generate growth.’

In fact, he continues, Winn-Dixie’s biggest strength might be that, well…it’s been around for a long time. “It’s an embedded part of many communities, so there’s a lot of habitual shopping at Winn-Dixie — consumers who go there just because that’s where they’ve always gone,” Saunders explains. “That’s probably not the strongest type of loyalty, but it works, to an extent.” The problem is that only helps the chain retain existing customers, not gain new ones. If Winn-Dixie wants to attract a significant share of the population that’s migrating to the Southeast, it’s going to have to do more.

Now complete in more than 70% of Southeastern Grocers’ footprint, store remodels have focused mostly on the perimeter.

The good news is that it’s trying. In the past several years, Southeastern Grocers has refreshed or renewed more than 70% of its more than 420-store footprint (which also includes the Harveys Supermarket and Fresco y Más banners), incorporating input from customers in each location. Most remodels feature expanded delis, bigger meat and seafood counters and more space for fresh, refrigerated items. Some even include tap rooms with craft beer. Unlike old stores, which Saunders describes as “a little tired,” new and remodeled locations are fresher and brighter — and more pleasant to shop. “But in some ways, the remodels are more about bringing Winn-Dixie up to scratch rather than about making it a leader,” he says. 

To be sure, the chain is now a better version of itself, and the improvements put Winn-Dixie in a better position to compete with rivals, says Saunders. “But they still don’t have a clear point of differentiation — especially against a retailer like Publix.”

Despite the obvious challenges it faces, Winn-Dixie does have a few things going for it, including a “reasonable” reputation for value (though it’s been undercut in recent years by Aldi and others). In fact, regular Winn-Dixie customers are much more likely than customers who patronize other supermarkets to say they shop there because of the prices and the promotions (see chart on page 50). No, the chain can’t compete with Aldi or even Walmart, but observers say it may have a slight advantage over other competitors in the muddled middle.


Winn-Dixie Rewards members earn a point for every $2 they spend, and 100 points equal a dollar off. But that’s just one of many ways to save.

Manufacturers we talked to give Winn-Dixie props for “strong weekly print ads” that include excellent feature offers as well as digital coupons. Then chain has also gotten some good press for its Down Down program, which offers deeper discounts on more than 150 most-shopped products for an entire season. Highlighted in store by signage featuring a red hand pointing down (down), the discounted items save consumers an average of 15% — just ahead of the rate of in-store food inflation. “It may be something of a defensive move [since] Winn-Dixie knows its shoppers could trade down to discounters, value players and dollar stores,” says Saunders. However, it’s a smart one nonetheless. 

But the real champion of Winn-Dixie’s savings trifecta just might be its rewards program. Ranked by Newsweek as one of the best supermarket loyalty programs in the country, the Winn-Dixie Rewards offers customers one point for every $2 spent, and 100 points equals a dollar off. “That’s a 0.5% rebate on everything consumers spend,” says Suren Wanasundera, associate consultant at Wilton, Conn.-based Cadent Consulting. But the real excitement comes with deals of the week and Mystery Bonus multipliers that kick in whenever a customer spends $30. “It’s gamified,” he says. “But it’s fun and keeps people coming back.”

“It appeals to the modern-day coupon clipper, which is exactly who shops at Winn-Dixie,” adds Cadent managing director Don Stuart. He’s also a fan of the chain’s private label program, which offers consumers yet another way to save. Comprised of approximately 8,000 items, the line includes four tiers: SE Grocers, SE Grocers Essentials, SE Grocers Prestige and SE Grocers Naturally Better.

“Southeastern Grocers made a big commitment to private label, adding lots of SKUs and costs,” he says. “Clearly, they want to stand out as a differentiated destination, which is not easy to do in Florida. But we think the program is an asset.”

Saunders agrees. “A very clear good, better, best segmentation…makes products selection a lot easier for the shopper,” he says, calling the program a big improvement from five years ago when quality was hit or miss.

How have consumers responded? Although she declined to share details around private label sales, vp of frozen and dairy merchandising Tracy Aquila reports, “We have seen an increase in customers opting for products in our SE Grocers line over their national brand counterparts, especially in categories such as cheese, eggs, frozen potatoes, water, shortening and oil, salty snacks, coffee bleach and toilet tissue.” 

Winn-Dixie gets high marks for its private label program, which spans four tiers, including the upscale SE Grocers Prestige brand.


Prepared foods are another positive at Winn-Dixie, especially in newer stores where deli counters have been expanded, says Saunders. Some stores even have dining areas for consumers who want to eat-in, which is especially popular among older customers, he adds. 

“Winn-Dixie has developed a nice laddering approach to prepared foods, with ready-to-heat meals starting at $5.99, ready-to-cook meals starting at $6.50 per person, and build-your-own hot bar meals for $7.99 a pound,” says Stuart. “And its Lip Lickin’ Chicken purportedly competes very well against Publix’s fried chicken offering.”

Although Winn-Dixie’s assortment has been described as ‘a bit bland,’ its Naturally Better own brand collection includes ample natural, free-from and organic options.

Known for decades as “The Beef People,” Winn-Dixie also gets high marks for its fresh meat program. But industry observers are less complimentary about Winn-Dixie’s center store offerings, which one described as “boring, not trendy at all.” 

Saunders tends to agree. “I’ve been impressed by the [perimeter] service counters and the produce, both of which are a big step up from before. But the main grocery offer feels a bit bland.” 

One problem, according to a manufacturer partner, is a rigid category review schedule “that precludes Winn-Dixie from jumping on emerging trends.” Another supplier says there’s simply not enough real estate for refrigerated and, especially, frozen products, which means several categories are already underspaced, leaving little room for unique items as well.

But an even bigger issue, according to one manufacturer, is the chain’s tendency “to gravitate toward inexpensive, lower-quality belly filler,” which suggests to potential middle and upper-middle class customers that perhaps they should shop elsewhere.

‘The company wants manufacturers to spend excessively so they can promote products at the same retails as the competition — at their regular margins.’

Another supplier said much the same thing about Winn-Dixie’s frozen entrée assortment. “The consumer has shifted to more premium, better-for-you options, but the majority of the chain’s sets are still filled with cheap, low-priced offerings.” While he understands that Winn-Dixie customers go there for low prices, that doesn’t mean they don’t want good quality food. It just means they want good quality food at good prices. 

Winn-Dixie’s prepared foods program, including grab-and-go options,
is considered a strength — and compares favorably to Publix’s.

Despite the rather pedestrian assortment, industry analyst Paula Rosenblum says she was pleasantly surprised by the breadth of Winn-Dixie’s organic and plant-based options when she stopped in recently. “I didn’t love the miles of 2-liter soda bottles,” says the co-founder and managing director of Miami-based RSR Research. “But when it comes to the stuff I want, I actually think Winn-Dixie’s assortment is better than its standard grocery competitors.” That said, however, “There’s just not enough differentiation for me to drive 100 blocks to get to Winn-Dixie versus four to Publix.” She adds that compared to Winn-Dixie, “Publix has so many bloody locations in South Florida — approximately one every 25 blocks. That may well be Winn-Dixie’s biggest challenge.”

Although Southeastern Grocers continues to expand in Florida (its next new store will open in Jacksonville’s College Park neighborhood in 2023), an improved e-commerce offer may provide another way to close the gap with Publix. Last month, the company announced a new partnership with DoorDash that allows consumers to buy groceries through the Winn-Dixie app or website at the same prices they’re selling for in-store. “We believe shopping online should be an extension of shopping your local stores, and our new offering is just that,” said chief customer and digital officer Andrew Nadin in a statement. Delivery starts this month while curbside pickup is expected to begin in early 2023.

The new service won’t change or replace any existing partnerships, says Aquila. “[It is] simply an additional shopping option that we are offering to our customers that provides added savings through in-store deals and promotions not available through third-party delivery services.”

More consumers are opting for private label cheeses over their national brand counterparts, according to Winn-Dixie.


To make shopping in-store easier, says Aquila, Winn-Dixie recently “realigned” certain categories previously merchandised in multiple locations. “For example, we moved all frozen breakfast items together, so whether a customer is looking for their sausage biscuit sandwich or their waffles, they can be found in one spot.” 

In fact, one manufacturer praised the chain for creating a destination section for frozen Asian food as well because it allows consumers to find all the products they need for an Asian meal in a single location.

Endcaps are reserved for advertised items, which are called out with bold signage that emphasizes value for the money. In addition, “Many Winn-Dixie stores have display bunkers, giving them an advantage over Publix, which has very little display space,” says one manufacturer partner. “But they could be merchandised more attractively or set up around themes such as breakfast or holidays.” That oversight points to a bigger problem, he continues. “Aesthetically, the chain doesn’t match up to the competition. The shelves look like they don’t receive enough attention, and shelf stock appears considerably lower [than other supermarkets] with more empty space.”

The frozen seafood set is situated alongside the fresh seafood counter so consumers can find all of their options in one place.

That complaint was echoed by several manufacturers. “Empty shelves and proper product placement are challenges,” says another supplier, who also lamented the chain’s reset process. “On-time resets are very inconsistent.”

What’s it like to do business with Southeastern Grocers? Suppliers we talked to were all over the map. The majority said category management teams are engaged, approachable and open to new ideas (though they often fall short when it comes to implementing truly “wow” strategies). But there were also a few criticisms. “In our category, the current team is dead at the desk, completely unresponsive,” says one manufacturer. “They need fresh blood or they will continue to get their asses kicked by Publix and Walmart.” 

Another was a bit more circumspect. “When a category manager is ‘on board’ with a program or product, they’re great to work with. When they’re not on board, it can be difficult to get a return e-mail or phone call to discuss.”

However, a bigger issue for many suppliers is the high cost of doing business with Southeastern Grocers, which relies on distributors to supply many items. “They still work with C&S, so we have to go through them. And they’re expensive to work with,” says one new manufacturer partner, citing a pricing structure that’s different from other distributors. “But so far, we like doing business with Southeastern Grocers,” he adds. “They’re fully aware of our total costs, so the slotting fees are reasonable.”

But not all manufacturers share that opinion. Thanks to not-so-favorable terms with UNFI, explains one, Southeastern Grocers’ procurement costs are fairly high. To offset those costs, “The company wants manufacturers to spend excessively so they can promote products at the same retails as the competition — at their regular margins,” which doesn’t sit right with some suppliers. In addition, “Southeastern Grocers charges $5,000 for any case pack change. That’s excessive,” he says. “It also charges slotting fees at a similar rate, while Publix doesn’t bill for pack changes or slotting.”

As a result, many manufacturers are priced out of promotional opportunities. “Southeastern Grocers has many vehicles to promote, which is great,” says a long-time partner. “But many are too expensive for smaller brands to participate in and seem geared toward big CPG companies.”

The same may be true for the Southeastern Grocers’ new digital advertising displays, which are being installed in key locations across its market area. Supplied by digital advertising network Grocery TV, the displays feature product promos, in-store specials and local events and allow Southeastern Grocers to earn passive income without impacting vendor trade spend.


Will all of the changes at Winn-Dixie make a difference? The jury is still out. But Saunders gives Southeastern Grocers a lot of credit for bringing the chain up to par. “Admittedly, it will never be Publix,” he says. But the improvements at least give it a fighting chance in Florida’s increasingly competitive grocery market. Still, it won’t be easy.

“My sense is that a lot of what they’re doing now is really just appealing to their core,” says Stuart. But the key to future growth is grabbing newcomers to the state, who, right now, are gravitating to Publix, Walmart and Aldi. “The challenge is that Winn-Dixie lags Publix in perceived quality but can’t compete with the others on price. So there’s pressure from the top and the bottom. But trying to muddle through the middle can be a tight squeeze.”

Denise Leathers

Denise Leathers

Denise is the Editorial Director for Frozen & Refrigerated Buyer.

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