Supermarket Smackdown

It took Wal-Mart to expose their problems. But old-school grocers are revamping their formats to stave off extinction

Cocky. Ruthless. Vicious. Mean. Those are some of the ways Jerry Davis, CEO of Affiliated Foods Southwest, describes the supermarket juggernaut that is Wal-Mart. He could have added hyperefficient, low cost and customer focused. The megachain's rapidly expanding grocery business--which now accounts for a fifth of U.S. food sales--has left a trail of shuttered supermarkets in its wake. This year in particular, the damage is piling up. Winn-Dixie, once a Southern power, suspended its dividend indefinitely, causing its stock to drop 28% in January, and is expected to close more than a hundred stores. This comes on the heels of Fleming...

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