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Forbes reports that in the wake of the devastating damage done to New Orleans by Hurricane Katrina, Winn-Dixie has managed to use the situation to its own advantage. “While competitors reeled, the chain last year - even as it reorganized under bankruptcy protection and closed hundreds of stores - netted big sales gains in neighborhoods that remained sparsely served,” Forbes reports. “Having reopened three stores in New Orleans during the past month alone, Winn-Dixie has replaced Wal-Mart Stores Inc. as the No. 1 grocer inside the city limits.”

However, the story also notes that Winn-Dixie remains in third place in its home state of Florida, where it has most of its stores, trailing behind both Wal-Mart and Publix.

According to the piece, “Winn-Dixie's turnaround would have brighter prospects if it had begun it a year or two earlier, but Florida's troubled economy will drive shoppers to bigger chains with the resources to charge lower prices for meat and produce of the same or better quality, said Burt Flickinger III of Strategic Resource Group, a New York-based supermarket consultant.

“Warehouse clubs, including Wal-Mart's Sam's Clubs, Costco Wholesale Corp. and BJ's Wholesale Clubs Inc., continue to expand in the region, Flickinger notes.

“Accordingly, he likens Winn-Dixie CEO Lynch to Gen. Robert E. Lee, who led his small, scrappy Southern army to a series of impressive victories before eventually succumbing to a bigger, better-equipped adversary.

"’Winn-Dixie looks like it may be heading for its own business version of Gettysburg,’ Flickinger said.”
KC's View:
As usual, Burt Flickinger finds exactly the right words to describe the Winn-Dixie conundrum. The retailer may have been able to use one disaster to revive its fortunes in one place…but it may be facing a much bigger and unavoidable disaster down the road.