Harbor Long term Growers... (AMEX:WINN)
Historical Stock Chart

From Jun 2019 to Jun 2024

Winn-Dixie Stores Inc. (WINN) won't broadly cut prices in a declining economy even as competitors threaten to get more competitive on pricing.

"We will not over-invest in price simply to chase sales," Winn-Dixie's Chairman and Chief Executive Peter Lynch said Tuesday on the company's fiscal first-quarter earnings call.

Winn-Dixie instead will focus on fine-tuning its promotional message on its circulars, a strategy Lynch said has become paramount in attracting customers in its markets.

"This is not an environment here in the Southeast that's a price war," Winn-Dixie's Chairman and Chief Executive Peter Lynch said. "This is war of promotional pricing on the front page of the ad."

The comments come as Wal-Mart Stores Inc. (WMT) looms as a more aggressive competitor in the grocery store business, while the privately held Publix Super Markets Inc. is also stepping up competition in some core Winn-Dixie markets. Prospects of a pricing war have weighed on the grocery sector throughout the year.

Winn-Dixie shares were recently down $1.20, or 9%, at $12.15, after the supermarket operator on Monday reported a wider first-quarter loss than analysts expected. The company also cut its fiscal-year outlook for adjusted earnings before interest, taxes, depreciation and amortization, as weak consumer spending puts pressure on the grocery-store business.

Identical-store sales fell 1.5% in the latest quarter, and the company said the declines have widened in its current quarter on greater pressure from deflation, and as consumers spend less per shopping trip.

The company said boosting sales over the next several quarters will remain challenging as unemployment persists. Deflation in food prices is also expected to hurt sales during the early half of the current fiscal year, although the company expects that to abate next year.

-By Paul Ziobro, Dow Jones Newswires; 212-416-2194; paul.ziobro@dowjones.com