Amazon effect felt as two grocery chains on verge of bankruptcy

By RetailFOXBusiness

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Two U.S.-based supermarket chains are on the brink of bankruptcy as Amazon preys on brick-and-mortar retailers across the country.

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Bloomberg, citing people familiar with the matter, reported that Bi-Lo, the Winn-Dixie grocery chain’s parent, is preparing to file for bankruptcy as soon as March. Meanwhile, the owner of Tops Friendly Markets, could seek court protection from creditors as soon as this month, Bloomberg said.

While supermarkets have been highly competitive for decades, with “Grocery Wars” often dominating headlines, e-commerce giant Amazon posed a new and greater threat when it acquired Whole Foods last year.  The move has forced older chains to either consolidate or revamp their operations. While Amazon controls a small share of the e-commerce grocery business, it does control the lion's share, 37.5%, of overall e-commerce, as tracked by Slice Intelligence. Some analysts suggest Amazon may be trying to duplicate that success with food.

A spokesman for Winn-Dixie told FOX Business that Bi-Lo parent Southeastern Grocers, based in Jacksonville, Florida, is undergoing a strategic review before its unsecured bonds mature later this year.

“The company’s business operations continue to be strong, as we serve our customers with quality and commitment by working seamlessly with our business partners every day,” he said. “We are dedicated to being a great place for associates to work and a great place for our customers to shop by providing quality, service and value in the communities we serve.”

Bloomberg, however, reported that Bi-Lo is expected to announce up to 200 Winn-Dixie store closures —either before or after its filing—as part of its plan to restructure. Winn-Dixie has struggled in recent years, with the chain previously filing for bankruptcy in 2005 and 2009. Bi-Lo acquired Winn-Dixie in 2012. Bi-Lo has debt of more than $1 billion following its 2005 buyout by Lone Star Funds.

Tops, the Williamsville, N.Y.-based chain, which has about 170 grocery stores employing more than 14,000 employees in the Northeast, has yet to announce any store closures.

A representative for Top Markets did not immediately respond to FOX Business’ request for comment but later sent this statement: “Today, Tops Markets has taken an important step to better position our business for long-term success. We are pursuing a voluntary financial restructuring that will help make us a stronger competitor.  All of our stores are open, with no impact on daily operations.  Just as we have for 56 years, Tops Markets is as focused as ever on serving our communities and providing our customers with an exceptional shopping experience,” Frank Curci, CEO of Tops Friendly Markets, wrote.

This article was updated 2-21-2018