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The St. Petersburg Times reports that the devastation caused by Hurricane Katrina in the New Orleans area is likely to cause bankrupt Winn-Dixie even greater financial stress – since New Orleans was actually one of the few markets where the company was pretty successful. Winn-Dixie was number two in New Orleans, second only to Wal-Mart in terms of grocery volume.

The paper writes, “Winn-Dixie reopened all but three of its 17 Mississippi stores. But the chain has been unable to reopen 26 of its 51 stores in Louisiana, almost all of them in metro New Orleans. Meantime, it's becoming apparent the city will remain a sparsely populated ghost town for months, or longer, while floodwaters are pumped out and the city begins to rebuild.” And so, the Times writes, Winn-Dixie will have to decide “how much business it can hope to recover in a city facing a major population decline.”
KC's View:
Not to minimize the importance of Hurricane Katrina, but we hope that the powers that be at Winn-Dixie don’t start using it as an excuse. Winn-Dixie’s biggest problem is its inability to create compelling stores that differentiate themselves from the competition.