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Winn-Dixie hit by downturn and discounters

JACKSONVILLE, Fla., Aug. 9 (UPI) -- U.S. retail analysts said grocery chain Winn-Dixie was likely in trouble, besieged by discounters on one side and a poor economy on the other.

Market analyst Scott Mushkin at Jefferies & Co. said, "The future's not so great" for the retailer that is banking on store-remodeling to help pull it out of a slump, the Orlando Sentinel reported Monday.

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"I've always said … that the issues around Winn-Dixie were an issue with the brand and the fact that the brand had been tarnished. And I've always said that the more you grow the base of remodeled stores, the more word is going to get out that Winn-Dixie is a place to shop," Chairman and Chief Executive Officer Peter Lynch said in a conference call earlier this year.

But Mushkin said the 6 percent sales increase at remodeled stores was, "not enough to really change things."

Winn-Dixie announced last week it would close 30 stores in its core region, the southeastern United States.

"I think they may have known for some time there were going to be some stores that weren't going to be worth the investment," said Mark Hamstra, an editor at Supermarket News.

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Winn-Dixie's troubles are, in part, a continuation of its 2005 bankruptcy. Some of its stores "fell into disrepair," the newspaper said.

At the same time, competitors with discount prices, such as Target and Walmart, began to expand their grocery businesses, cutting into Winn-Dixie's market share.

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