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Jax Daily Record Friday, May 31, 201312:00 PM EST

Bi-Lo's Onstead expects Delhaize deal to add Jacksonville jobs

by: Mark Basch Contributing Writer

Bi-Lo Holding LLC has cut about $100 million in labor costs since acquiring Jacksonville-based Winn-Dixie Stores Inc. in March 2012, but a deal announced this week to buy three other supermarket chains from the Delhaize Group could result in more jobs in Jacksonville, Bi-Lo President and CEO Randall Onstead said Thursday.

"When we announced this merger (with Winn-Dixie) last year, we announced we would grow this company," said Onstead, who was the keynote speaker at a JAXUSA Partnership luncheon at the Hyatt Downtown.

"As we increase the number of stores we open, we expect to increase the number of employees here in Jacksonville to support our store base," he said.

Onstead, who has been running Bi-Lo since 2008, moved to Jacksonville last year as the merged company located its headquarters at Winn-Dixie's corporate office at 5050 Edgewood Court in West Jacksonville.

His address to the economic development group was his first major public appearance in Jacksonville since the merger.

The combined Bi-Lo Winn-Dixie employs about 60,000 people, with 686 supermarkets in eight Southeastern states, but the company has cut some personnel since the merger.

Earlier this week, Bi-Lo announced its first acquisition since the Winn-Dixie deal, agreeing to buy the Sweetbay, Harveys and Reid's chains from Delhaize, which operates 165 stores in the Southeast.

Onstead told reporters after the event that he could not discuss details of that acquisition because the deal still has to complete a federal antitrust review, but he does expect it to have a positive impact on the Jacksonville headquarters.

"Suffice it to say this is a big acquisition. It's going to add a lot of top-line volume to our company," he said. "It does have a ripple effect throughout our support staff."

Onstead also said the company expects to build new Winn-Dixie stores. He said the company is bringing in a new senior real estate executive next month who will scout out new locations.

"We know that we need Winn-Dixie stores not just here (in Jacksonville) but all over our footprint," he said.

Onstead would not say if the three chains it is acquiring from Delhaize will keep their brand names or be folded into the Winn-Dixie and Bi-Lo chains.

During his keynote speech, Onstead said the company's three-part plan to grow the company consists of acquisitions, capital investment and increasing sales at existing stores.

He said spending money on acquisitions will not prevent the company from making capital investments to renovate existing stores and build new ones.

Onstead said Bi-Lo Winn-Dixie's basic strategy is to connect with the communities that its supermarkets serve.

"We are going to be the neighborhood grocer people shop the most," he said.

Before the last recession, the supermarket industry operated under the assumption that a successful grocer had to differentiate itself, perhaps being a low-price leader competing with Walmart or a high-end grocer competing with the likes of Whole Foods, he said.

Onstead said Bi-Lo changed its approach as it was trying to turn around its business in 2009 and decided it could successfully operate in "the middle." It didn't have to compete on low prices or high-end service.

"We stopped trying to be something we couldn't be," he said. "We love being positioned between those two operators in the middle."

Onstead said the company adopted another strategy after he met with former Winn-Dixie CEO Dano Davis, whose family built the Winn-Dixie chain but lost its entire investment in the company when Winn-Dixie went through a Chapter 11 bankruptcy restructuring in 2005 and 2006.

"He said you need to bring back 'the beef people,'" which was Winn-Dixie's long-time slogan when the Davises ran the company. Onstead said the company is putting more emphasis on its beef products.

As a new resident of Jacksonville, Onstead said he is often asked how he likes the city.

"When they ask you that question in Jacksonville, they really want to know," he said.

Onstead said he has become very comfortable in Jacksonville, because he sees a lot of similarities with his hometown of Houston.

"Both cities have a wonderful quality of life," he said.

Among the similarities are that, like Jacksonville, the nation's largest city in terms of square miles, Houston is a big sprawling city that ranks 5th in square miles.

He also said both are port cities, both have "world-class medical facilities" and "both cities have a pro-business workforce."

Both cities host major PGA Tour events each year, both have hosted a Super Bowl — and both have NFL teams that would like to play in a Super Bowl someday, he said.

Onstead said he's only found one downside to his new home in the Riverside neighborhood.

"I have to drive by multiple Publix grocery stores to get to the nearest Winn-Dixie," he said.

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