from staff
Winn-Dixie Stores Inc., the second-largest Jacksonville-based company on the Fortune 500 list of the nation’s biggest companies, emerged from Chapter 11 bankruptcy reorganization more than three years ago. The chain is rebuilding its brand, its culture and its stores. Currently, Winn-Dixie has spent about $360 million renovating 190 stores and by June that number will be 220. Peter Lynch, chairman, president and chief executive officer, met with the editorial staff of the Daily Record on Monday.
What did you do before joining Winn-Dixie?
I have been in the grocery business my whole life. I started in Boston at Star Market. I started as a bagger and became president. I then went to Salt Lake City to run American Stores. Then I went to Chicago to run Jewel-Osco and then to Philadelphia to run ACME and turned it around in a year.
When American and Albertsons merged, I went to Boise, Idaho, as president and chief operating officer. It was a great opportunity.
I then actually retired. I was in Palm Springs playing golf with my wife and these guys (Winn-Dixie) were after me. My handicap was not getting any better, so I said, ‘Let’s go do it.’
When I got here, I found the company was in worse shape than I thought. I took a walk on the beach and I thought, I’d rather be part of the solution and not part of the problem.
You have renovated nearly 200 stores. Are there any plans for expansion nationally or locally?
We will start building new stores in existing markets when we have a better market share. We opened a brand new store four weeks ago in Covington, La., which is just west of Lake Pontchartrain. The opening far exceeded our expectations. (The store has an open-air produce market outside.) Opening week, about 30 percent of the produce we sold was sold outside the store. There is no sliding door. Instead, you walk through a 28-foot wide opening.
When will we see new stores in Northeast Florida?
Our real estate division is always looking for sites. As soon as we find the right site, we will open a new store. We would love to have a new store in our hometown.
Do you spend time in the stores?
I’ll get in the stores and jump in once in a while. The good thing is, my roots are still there. I have worked every single aspect. I know what they (the employees) go through. The good thing is, they can’t pull the wool over my eyes.
Are you involved with charities or volunteering in the community?
I get involved with all of our charity funding and I see what we are going to do in the next year, which hadn’t happened before. This year I got involved with Susan G. Komen Race for the Cure. That’s a very good cause to support. Personally, I have a sister that has cancer, and she’s been fighting it for 26 years. She’s a survivor. Cancer touches everybody, so I think that’s something to get behind and help them find the cure. We also held a fundraiser for Shands Hospital’s TraumaOne, where my wife organized an event that converted a hangar at Craig Airfield into a great room for a fundraiser.
What are you doing to improve the company’s image for the health-conscious customer?
Our strategy is “Fresh and Local.” With fresh it’s about being healthy and eating healthy and changing the lineup of products we carry in the store. We are looking into a numerical system, which isn’t completed yet, that indicates, by product, the nutritional value of those products. The scale will be one to 100, with 100 being the best you can possibly eat and one is I better not eat that.
Our whole strategy for Fresh and Local is focused on health. We have 400 pharmacies in our stores, which is great for the public because one of the most trusted people in America is still the pharmacist. You can’t always talk to your doctor, but you can talk to a pharmacist about living a healthier lifestyle. When you consider the obesity problem in America, it’s going to take education in the schools to let kids know what’s good to eat and what’s bad to eat.
Two, we are going to have to assist the public by carrying the right products in our stores and having that type of educational material available to help people eat healthier. We’ve expanded what we carry in organic and natural lines. We’re not going to say that we’ve got everything yet, but we are heading down that road.
Plastic bags have been grabbing a lot of headlines lately as government leaders look for ways to reduce the amount of plastic bags in our landfills. What’s your recycling policy?
We have a recycling program, but right now we are doing a lot of work trying to figure out where this thing is going to head to. (Bans on plastic and paper bags are being considered in favor of reusable bags.) We sell the reusable bags. People like them, so we are encouraging that. In the end, plastic bags are probably going to go away and we’ll have something else. So we are watching and we’ll see where it goes.
How is morale?
I would say morale is very good in our company. Think about it. Here is a company that could have been extinct. We saved it, we’re on track, we’re stable, we have cash and haven’t even gone into the line (of credit) since I’ve been here. So they have jobs and think about this environment people are in today, where it’s tough. They’re feeling good about the direction of the company. They like seeing the stores remodeled. I think morale is very good at Winn-Dixie today.
How about for your shoppers? What are they saying?
They’re saying there’s been a lot of improvements in the store, particularly the ones that have been remodeled. But our challenge is always how do you get someone who’s been shopping at Publix or some other place the last 10 years because they got upset with something that happened at Winn-Dixie? And how do you get them back? That’s the tough part. That’s word of mouth, that’s by invitations to remodels and grand reopenings. You’ve got to win them back and you’ve got to win them back one at a time. That’s the hard part because they don’t just come back automatically.
You’ve been in the grocery industry your entire life. How has it changed? Have their been wholesale changes?
I’d say there are two things. One, I’ve watched the industry mature a lot. Two, I’d say the biggest game changer has been Walmart. Before Walmart, you could have in any one of these towns, you could have five or six pretty good food retailers. Today, with the advent of Walmart, you can typically in a big town only have three. For example in Jacksonville, it’s Winn-Dixie, it’s Publix and it’s Walmart. They really were a game changer.
But the companies have matured. When I say mature, you’re talking a little about health. I can remember one of my first jobs was to clean the meat room. Well the meat room guys cleaned it once a week. Now we clean it twice a day. Back then, they’d cut beef and poultry and everything else on the same band saw. Cross contamination is what we call it today. I’ve really seen it mature on the health and sanitation side. Ordering products has changed with computers. It’s a lot more efficient.
How about the future of the industry?
I really think the place you’ve got to watch is really health and wellness. I think the next thing you’re going to see — and I really believe in this because of this obesity thing — more focus in the schools through education. As a result, there’s going to be more pressure on the retailers to be more up to speed on health and wellness. So we’re going to get out ahead of the parade at Winn-Dixie and be a leader on this front. It’s all about health and wellness. People want to live to be 100, they’re trying to figure out how to do it and we need to supply the products and services to get them there.
You mentioned the challenge of getting shoppers back. What would you tell them now? What’s your selling point?
We understood what the problems were. The stores were old, tired, dirty, didn’t have the products customers wanted and they weren’t fresh. We’ve taken that now and we have very fresh stores. We have better variety in the stores. We put better service in the stores. We’ve spent nearly $2 million in each of these stores to clean them up. We think we’re on track to getting stores back to where consumers feel very proud to shop there again. It’s the invitation ... it’s easy to turn them off, but it’s very hard to bring them back because people have choices. The good news is they are coming back, but it doesn’t happen overnight.
How has globalization affected the grocery industry?
It has provided better variety for the public and more variety during different times of the year. There were certain times of the year you couldn’t get crops.
I’ll give you an example: sweet onions. Years ago we only got Vidalia onions in the spring. There was a run for maybe a month. Everybody couldn’t wait for them to come out and it was a big deal. Now we can get sweet onions all year round. That’s what globalization has done. It has provided access so we can have products for the consumer and obviously the speed at which we can get products today is much faster.
Are you a Jacksonville Jaguars season ticket holder?
No, I’m not, but the company is. We have a sponsorship but we also buy 1,000 tickets per game that we give to the community. We have lots of tickets for the games.
You invested more than $3 million to renovate the Downtown store. Why?
First of all, a lot of people told me we shouldn’t do anything over there because it’s a tough part of the city. I said to my guys, there’s a bridge there and I bet a third of the people in Jacksonville drive back and forth in front of that store every day and we’ve got an old, tired store. There’s nobody else over there serving the community and people have got to eat. It was a major remodel but we wanted to make it a nice store. We have and it’s been a nice success for us.
We’ve done others like the store in Liberty City in Miami. That’s a tough, tough neighborhood but we made a commitment. We went back in and did a state of the art store and that has also been a tremendous success for us. We’ll go into challenged neighborhoods. I think it’s the right thing to do for the communities. There are people there and they want to eat and they want a nice place to shop. Unlike some other retailers, we’ll make the investment in those kinds of areas. The good news is people reward you for the effort.
Also by Winn-Dixie taking a stand there, hopefully it encourages other people to do the same type of thing and make the community that much better.
When do you predict the economy will recover?
That’s a big question that I don’t think anybody can answer yet. People talk about the “new norm,” which suggests that people have been hurt so badly by this recession that they are going to continue to be very value-focused.
I never would have thought that I would have walked down the street a year ago concerned that my bank wasn’t going to be there the next day. I thought that was a story my father used to tell me. I never thought that would happen to our generation and I was concerned like a lot of people were. What was going to happen to the stock market? What was going to happen to the banks?
I think it was a wake-up call for America. I think that won’t go away quickly. People will be very studious with where they put their money and they’re going to save some money in case a bad time comes again.
The recovery will also be a slow one because it’s a jobless recovery. A lot of companies stopped hiring and won’t be replacing jobs. I’m not an economist but I can see we’re not having a speedy recovery.
It was definitely a wake-up call. Now it will depend upon the leadership and the businesses in America to bring the country back and allow people to feel secure about themselves and their families and the environments they live in.
How much longer will you stay with the company?
I don’t know. I am having a lot of fun. I live in Ponte Vedra Beach and I have learned to steer and park a boat. I am going to stay a while.
What’s your favorite item from the deli?
Rotisserie barbecue chicken, or the fried chicken when my wife isn’t looking.