TAMPA — The parent company of Winn-Dixie reached an agreement with the Federal Trade Commission to sell off a dozen grocery stores in Florida, Georgia and South Carolina as a condition of its proposed takeover of 154 Sweetbay and other grocery stores — a deal that will ultimately mean the transformation of Sweetbay sites into Winn-Dixie stores.
As part of the deal the Winn Dixie in Tarpon Springs is schedlued to close in mid-May.
The FTC and Bi-Lo Holdings, which is Winn-Dixie’s parent, agreed to the deal designed to preserve competition in local markets, starting a 30-day period for the public to comment on the proposed takeover. The next step is for the FTC to vote again on the proposed takeover.
Bi-Lo officials also announced they would close down 13 other stores under the Sweetbay, Winn-Dixie, Reid’s, Harveys and BI-LO banners as part of the overall transaction, due to their proximity with other Bi-Lo-controlled stores. That means stores will close in Dade city, Zephyrhills, Tarpon Springs, St. Petersburg, Seffner and other markets.
“We have been preparing for the integration of the Sweetbay, Harveys and Reid’s banners and store associates for many months and are delighted to now move forward and welcome them to the Bi-Lo Holdings family,” said R. Randall Onstead, president and CEO of Bi-Lo Holdings in a prepared statement.
Presuming it satisfies the conditions of federal regulators, who voted 4-0 to approve the proposed deal, Bi-Lo expects to close the purchase of Sweetbay, and other brands like Harveys and Reid’s, beginning March 22 and ending by May 31.
The overall transformation will mean a slew of changes for everyday shopping at Sweetbay stores, starting with the price of everything from a can of beans to bottles of fine wine.
For shoppers, the biggest change will be learning Winn-Dixie’s particular way of pricing groceries. Winn-Dixie regularly has higher shelf prices than rivals such as Publix, Walmart and Sweetbay. But unlike those stores, Winn-Dixie uses a membership card program that offers discounts on dozens of items that rotate each week — with deeper discounts if shoppers buy specific products in combinations. If you buy one specific item, you may get 25 percent off something else.
One other perk for Winn-Dixie shoppers is actually called FuelPerks. The program works through the Winn-Dixie membership cards and shoppers accumulate more points the more they spend at Winn-Dixie. That leads to discounts at the gas pump of stations that participate in the program, such as Shell. In theory, shoppers can earn 25 cents or more a gallon off their gasoline if they spend enough at Winn-Dixie.
Those discounts counterbalance Winn-Dixie’s standing as higher priced than its rivals. For the past four years, Winn-Dixie consistently charged more than Walmart, Target, Publix and Sweetbay in a Market Basket survey of 30 representative grocery items conducted each week by The Tampa Tribune.
For instance, in January, this Market Basket cost $98.45 when not using the Winn-Dixie discount card, compared to $85.37 at Sweetbay, $86.76 at Publix and $81.73 at Walmart. That’s balancing for some changes in product sizes to make an apples-to-apples comparison between stores.
There’s good reason to use the Winn-Dixie card because using the card on those same items brings Winn-Dixie’s prices for the Market Basket more in line with rivals nearby — $86.33.
The purchase came about as Sweetbay for years suffered as a middle-of-the-road grocer that lacked the market saturation or reputation of a Publix and the buying power of a Walmart to offer lower prices. The parent company of Sweetbay, Delhaize Group, early last year decided to shut down 33 “underperforming” Sweetbay stores and put the rest up for sale.
Winn-Dixie, by way of parent company Bi-Lo, raised its hand in May last year to purchase nearly all the Sweetbay sites and re-open about a dozen closed locations. The price: $265 million in cash when other northern brand name stores were thrown in.
The takeover was subject to a review by federal regulators who watch out for the kind of consolidation in markets that can reduce choices for consumers, lead to price collusion between rivals, or, worse yet, the development of a monopoly. Now that the federal review is complete, the buyout and changeover from Sweetbay to Winn-Dixie can proceed.
“In addition, with the close proximity of some of the Bi-Lo Holdings and Delhaize stores, we also knew that we would have to close a few stores as part of the acquisition,” Onstead said.
Bi-Lo and Winn-Dixie issued a list of 13 stores they plan to close, including several in this market:
• Tarpon Springs Winn-Dixie, at 955 S. Pinellas Ave., closing May 17.
• Dade City Sweetbay 12530 U.S. 301, closing April 5.
• Zephyrhills Sweetbay, 38901 State Road 54 East, closing April 5.
• St. Petersburg Winn-Dixie at 2020 34th St. North, closing May 10.
• Seffner Winn-Dixie, at 725 Martin Luther King Blvd. W., closing May 24.
For stores changing from Sweetbay to Winn-Dixie, some changes will likely come soon, from a shopper’s point of view. Signs will change on storefronts in the coming months. Some mall owners have already filed for building permits to switch signs.
Then inventory on the shelf will start switching out with the store-brand products of Winn-Dixie taking over shelf space from Sweetbay brands like Hannaford, Home 360 and others.
The Federal Trade Commission acted to block the deal as it was first proposed last summer, arguing that it “would harm competition in several local markets” in Florida and other states through “higher prices, diminished quality and reduced service levels.”
These include markets in Arcadia, Dunnellon, Lake Placid, Madison, and Wauchula, Fla.; Bainbridge, Statesboro, Sylvania, Vidalia, and Waynesboro, Ga.; and Batesburg, S.C.
The proposed settlement calls for Bi-Lo to acquire the Sweetbay and other former Delhaize stores on a “rolling basis” through eight separate closings over a 10-week period. Each store divestiture must happen within 10 days of each deal closing.
These stores include Florida Sweetbays in:
• Wauchula — Sweetbay No. 1791, at 1133 U.S. 17 S.
• Dunnellon — Sweetbay No. 1795, at 11352 N. Williams St., Suite 305.
• Lake Placid — Sweetbay No. 1879, at 1519 US Highway 27 S.
• Arcadia — Sweetbay No. 1883, at at 1737 E. Oak St.
This entire process starts a 30-day clock where the public can submit comments, and then the FTC will vote on whether to make the proposed order final. The easiest way for the public to comment is through a website set up for the deal: https://ftcpublic.commentworks.com/ftc/biloconsent, or by mailing letters to: the Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
As for the several Sweetbay stores that remain closed down, their fate remains yet to be determined. The original merger announcement from Winn-Dixie and Bi-Lo said many would re-open. Officials with those companies have not yet returned calls for comment.