SEG Believes Restructuring Puts It In Best Position To Succeed

Shelby Market Profile

by Lorrie Griffith/editor-in-chief, editor–Southeast

Probably the biggest news coming out of the North Florida grocery market this year, thus far, has been Southeastern Grocers’ (SEG) prepackaged Chapter 11 bankruptcy filing in March.

The Jacksonville-based grocer had been the subject of speculation for a number of months, as financial analysts contemplated how the 700-store chain would be able to keep operating under its debt load.

(The Shelby Report requested an interview with Southeastern Grocers for this story. A spokesperson for the company declined, saying via email that the grocer would “pass on this opportunity right now as we focus on our upcoming remodels and business strategies.”)

In announcing the restructuring on March 15 via press release, Anthony Hucker, SEG president and CEO, said, “The agreement we announced today is an important step in Southeastern Grocers’ transformation to put our company in the best position to succeed in the extremely competitive retail market in which we do business.”

Hucker went on to say that the restructuring would decrease the company’s overall debt levels by more than $500 million, which would result in reduced interest expense, “allowing the company to invest more cash flow back into the business in the form of increased capital expenditures for store remodels and new stores.

He continued, “Southeastern Grocers is faced with a critical milestone in its transformation, and we have made choices for our future and long-term growth potential. We conducted a thorough review of our strategic options and determined that this financial restructuring is in the best interests of our associates, customers, supplier partners and the communities in which we serve. Southeastern Grocers is a strong, viable business and is building momentum with robust performance and new store concepts that resonate with our associates, customers and communities. This course of action enables us to continue writing the story for our company and our iconic, heritage banners in the Southeast.”

As part of the restructuring, SEG is shedding 94 stores, leaving the company with approximately 600 stores.

The closing list includes seven stores in North Florida: a Winn-Dixie banner store in Gainesville; two Harveys and one Winn-Dixie in Jacksonville; a Winn-Dixie in Orange Park; and two Winn-Dixies in Tallahassee.

Elsewhere in Florida, 27 Winn-Dixies and Harveys and one Fresco y Mas in West Palm Beach are on the list.

In SEG’s other markets, the closing list includes 10 Winn-Dixies in Alabama; 19 Harveys, Winn-Dixies and Bi-Lo (1) in Georgia; one Winn-Dixie in Louisiana; one Winn-Dixie in Mississippi; nine Bi-Lo and Harveys in North Carolina; and a combination of 19 Bi-Lo and Harveys in South Carolina.

Some SEG stores have gone to new owners. Six stores in Georgia and South Carolina will become Piggly Wigglys; three Alabama Winn-Dixies have been sold to independent grocers; and Thibodaux, Louisiana-based Rouses Markets has agreed to purchase a Winn-Dixie in Orange Beach, Alabama.

Remodeled Winn-Dixie opens in St. Johns

SEG’s remodeling campaign came to life in North Florida on April 12 at its St. Johns store, located at 2220 County Road 210 West.

The company said the changes at the store “came in response to customers who asked for an improved shopping experience.”

Hucker, noting that the chain has had a store in the St. Johns community for more than 15 years, said, “The newly remodeled store is designed with the needs of this unique community in mind. We’re excited to give our customers a store they can count on while continuing to offer a great shopping experience, providing exceptional service and the freshest products at the right price.”

The store features new façade signage; fresh colors and new signage inside; an updated produce department with an expanded selection of fruits and vegetables, including organic varieties; an improved deli with expanded grab-and-go meal options; a sandwich station offering hot and cold sandwiches; an array of lunch and dinner options, including a hot bar with rotisserie chicken, a wing bar with 10 different flavors, Smokehouse BBQ and ready-made salads available to go or to enjoy in the store’s new café-style seating area; a new in-store pizza shop with New York-style pizzas, hand-stretched crust and a full menu of assorted pizzas, including meat and vegetarian options; an expanded bakery department with new selections, displays and fresh bread daily; new SE Grocers Naturally Better branded gluten-free, organic and natural products; an expanded Cheese Shop with more specialty cheese varieties; expanded beer selections including craft beer and a variety of wines; a full-service meat department with a butcher on-site to make fresh cuts of meat by request; an updated seafood department with new sushi selections and expanded seafood varieties including fresh, whole fish and the option to select a “Seafood Made Easy” meal to cut down on cooking time at home; a new health and beauty section; expanded grocery aisles with additional products and assortments; and an updated floral department with a changing assortment.

In an interview with the Jacksonville Daily Record at the St. Johns store opening, Hucker reiterated that the bankruptcy filing had not slowed down the company’s plans to upgrade some of its stores but had instead accelerated those plans because of the lighter debt load.

According to the paper, Hucker declined to name other locations that would be remodeled but said customer feedback would be the guide in that process.

Walmart spending $200 million in Florida

Walmart said in in April that it will spend about $200 million in the state of Florida to build new stores and make improvements to existing stores. Forty-three stores are involved, six of them new stores.

In North Florida, the retailer will open two new stores in Jacksonville—a Neighborhood Market and a Supercenter.

Three Supercenters in Jacksonville also will be remodeled: 8808 Beach Boulevard; 10991 San Jose Boulevard; and 9890 Hutchinson Park Drive. In the Panhandle, the Lynn Haven Supercenter at 2101 S. Highway 77 also will undergo a remodel.

The investment includes the “rollout of several in-store and online innovations designed to help busy customers save time and money,” according to Walmart, which is spending about $11 billion across the country in fiscal 2019.

For one, online grocery pickup will be expanded. Walmart currently offers that service at more than 100 Florida locations and plans to roll out approximately 80 new grocery pickup locations at area stores in the coming year.

Second, Mobile Express Scan & Go, which allows customers to scan items with their mobile devices while shopping in store, pay instantly and skip the checkout line, currently is offered at all 49 Florida Sam’s Clubs and recently was launched at more than 10 Florida Walmart stores. Walmart said it will “continue evaluating opportunities to expand the service to more local customers in the coming year.”

Third, the Walmart Pickup Tower, which allows customers to pick up their online orders in less than a minute by scanning a bar code sent to their smartphone, currently is available at 15-plus Florida Walmart stores. Walmart will continue evaluating opportunities to expand the Pickup Tower service to Florida customers in the coming year.

“Making every day easier for busy families is at the forefront of everything we’re doing as a company,” said Elise Vasquez-Warner, a VP and regional GM for Walmart in Florida. “Customers have told us they want the convenience of shopping how, when and where they want. And, here in Florida, we’ll achieve that by building off the momentum we had last year, accelerating the rollout of customer-centered innovations, creating more than 1,000 jobs this year alone, and maintaining a sharp focus on improving our store experience.”

A new Walmart distribution center will open later this year in the city of Cocoa, on the east central coast of Florida.

More developing, refurbishing

A Publix store will be part of a planned shopping center in San Marco, according to an April 26 story in the Jacksonville Daily Record.

It has been 16 years since talks first began about developing the property at Hendricks Avenue and Atlantic Boulevard, the paper said.

Developer Regency Centers says the 30,000-s.f. Publix will be joined at the center by other shops and restaurants, not apartments as originally planned.

“It’s going to be a terrific shopping center that’ll be very favorably received by the neighborhood and what the neighborhood needs,” Regency Centers Corp. Chairman and CEO Martin E. “Hap” Stein, told the paper following his company’s shareholders meeting in Jacksonville, where it is based.

He said construction should start within the year and be completed a year after that. East San Marco is the name “for now,” he told the Record.

The Record also reports that independent grocer Rob Rowe is spending $2.7 million to renovate his Rowe’s IGA Supermarket on Blanding Boulevard in Jacksonville, which he opened about 13 years ago.

The paper says the store, which was built as an Albertsons in 1978, will get new food cases, shelving, refrigerated and frozen sections, paint, flooring, an additional checkout lane, a smokehouse, restrooms, and store and administrative offices.

Rowe acquired the 61,855-s.f. store in 2005 as part of his purchase of seven closed Albertsons stores. He sold one and opened six Rowe’s Supermarkets, the paper said. He kept the Blanding site and sold the other five eventually. He picked up some Food Lion locations when that grocer exited the North Florida market in 2012. He currently operates six stores in the Jacksonville area and is looking at possibly purchasing the Harveys store SEG is closing at 3000 Dunn Avenue, according to an April 13 article in the Record.

The store closing would create a food desert, according to the Jacksonville City Council.

Rowe, who worked for both Winn-Dixie and Albertsons early in his career, already operates a store on Dunn Avenue, about four miles away from the Harveys store that is closing.


Keep reading:

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Walmart To Invest An Estimated $200M In Florida Expansion This Year

About The Author

An observer of the grocery industry since 1988. Away from her editor job, she's a wife and mother of two grown sons and thinks cooking is (usually) relaxing.