Dive Brief:

• An accelerating pace of store remodels makes Southeastern Grocers more relevant than ever, and the company will successfully emerge from Chapter 11 restructuring sometime this summer, CEO Anthony Hucker told the Jacksonville Daily Record. “We’re not going anywhere,” he told the crowd assembled at a newly updated Winn-Dixie in St. Johns County, Florida
• Under its prepackaged restructuring deal, Southeastern will reduce its debt by $500 million — lowering its interest payments and freeing up more money for store remodels, according to the company. Southeastern plans to remodel around 100 locations per year across its four banners, Hucker told the paper. The company also closed 94 locations as part of its Chapter 11 deal.
• Hucker said store remodels will be customized to each location and the customers it serves. The company’s latest Winn-Dixie update in St. Johns featured new pizza and sub sandwich stations, along with 1,400 new natural and organic products.

Dive Insight:

Southeastern has been gradually remodeling its Winn-Dixie and Bi-Lo stores during the past decade or so, but the updates didn’t happen fast enough to keep the company from filing for Chapter 11 bankruptcy protection last month.

Now, the struggling grocer is shoveling more money into remodels as it tries to keep pace in a fast-evolving industry.

There are signs the updates will lift Southeastern’s fortunes. Its campaign to transform select Winn-Dixie and Bi-Lo stores into the more focused Harvey’s or Fresco Y Mas formats is by all accounts boosting sales. The Fresco Y Mas banner, which now includes more than two dozen locations, is really connecting with the growing population of Hispanic shoppers in Southeastern’s home state of Florida.

As CEO Anthony Hucker told reporters and shoppers at its latest remodeled store opening, Southeastern is using boots-on-the-ground research and data analytics to customize each store to the local audience. In St. Johns County, the company found 62% of shoppers surveyed said they typically don’t plan dinner until after 4pm. The store’s wide selection of foodservice options and natural and organic products zero in on prominent growth trends that are reshaping grocery retail.

There’s also proof that a legacy grocer can turn around its fortunes through effective store updates. Food Lion, the Ahold Delhaize owned chain, has remodeled hundreds of stores during the past several years as part of its “Easy, Fresh and Affordable” campaign. The refreshed stores have helped the chain fend off newcomer Lidl, and earned regular call-outs in the Dutch supermarket giant’s earnings reports.

At the same time, Southeastern faces an onslaught of competition, most notably in Florida. Natural and organic chains are leading a charge into the state — including Lucky’s Market, Sprouts Farmers Market and Earth Fare — while incumbents Publix and Walmarts are spending heavily to update their stores.

Because Southeastern isn’t the only grocer bringing fresh products and foodservice to the Sunshine State, success will come down to how well it can target the needs of shoppers in the markets it serves. The company will need to do a better job than its competitors at personalizing its stores — a tall task considering the uphill battle it faces financially, even after its restructuring.