Winn-Dixie Stores Inc. Chairman Peter Lynch, calling the chain’s transformational stores “a game-changer” for the company, said Monday that at least one more Jacksonville area supermarket will undergo the floor-to-ceiling renovation in the current fiscal year.
Lynch did not identify the stores, but said at least one of the company’s 53 area locations would be among the 17 being transformed in the fiscal year that began July 1.
Of those 17, two have been completed already, including the transformed Winn-Dixie in St. Johns County at 2220 County Road 210. The project was completed in mid-August.
The stores are renovated at a cost of about $5.5 million, almost triple the average renovation cost of $2 million.
The changes result in increased sales, which Winn-Dixie has said reach an average $475 per square foot, a 60 percent increase from the average $300 at its other stores.
In a meeting with reporters to discuss the company’s annual financial report and its plans, Lynch said Monday the company is embarking on more transformational projects than standard remodels.
He said all of the Jacksonville Winn-Dixie stores were remodeled as of three years ago. He said stores typically need upgrades every seven or eight years.
“Right now, our focus is the transformational strategy,” he said.
To determine whether a store would be a candidate for transformation, Lynch said the company studies its market and also employs “third-party validation” to ensure the decision is a solid one.
He also said that if the next 15 stores being transformed in fiscal 2011-12 are as successful as the first ones, “we might look at speeding up the process.”
Winn-Dixie embarked on the program to “transform” selected stores among the 484 it operates in the five states of Florida, Georgia, Alabama, Mississippi and Louisiana.
The St. Johns County store is not far from Duval County and is located near St. Augustine and several golf-course communities.
The transformation is focused on fresh fruits, vegetables, meats and seafood along with freshly prepared foods and specialty stations, as well as a wine area. The St. Johns County store features higher ceilings, wood and polished concrete floors and improved shelving.
Winn-Dixie has five completed “transformationals” in Mobile, Ala., Covington, La., and in Margate, Apopka and St. Johns County. “Each one continues to exceed our expectations,” said Lynch.
The company operates 53 stores in its Jacksonville market area.
Winn-Dixie reported Monday that it expects to invest about $200 million in capital expenditures in the current fiscal year, including $125 million for store remodeling and new store development and $75 million for retail store improvements and maintenance, information technology systems, warehousing and transportation.
It also expects to begin “to build the pipeline” for remodels and new store development for fiscal 2013.
Lynch said that he would have the locations decided for the next area transformational stores by the next earnings meeting, expected in three months.
Winn-Dixie reported annual sales of $6.88 billion, down 1.4 percent from $6.98 billion the year before. It reported a net loss from continuing operations of $29.8 million compared with net income of $36.8 million the year before. Fiscal 2010 included an additional week.
For the last quarter of the year, net sales of $1.6 billion were down 3.8 percent from the year before. Net income from continuing operations was $5.6 million, down from $16 million.
Identical-store sales were down 0.1 percent over the year, but were up 3.2 percent in the fourth quarter from the year before.
Lynch said the company expects “positive sales” up 2 1/2 to 3 1/2 percent this year in identical stores, which are those opened during the entire year, calling it “very good momentum.”
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