GREENVILLE, S.C. — Bi-Lo's same-store sales and its profitability have been “negatively impacted” by competition recently, according to one analyst.
Increased promotional activity and new competitive openings have resulted in “weaker than anticipated operating performance” in the third quarter of 2006, said Stella Kapur, an analyst at Standard & Poor's who issues public ratings on Bi-Lo's debt, even though the chain is privately owned. It operates 308 Bi-Lo and Bruno's stores in six states in the Southeast.
She noted that the company's liquidity “remains adequate,” however, and that it had $48 million in cash as of last fall, and it was expecting a $33 million cash infusion from Lone Star Funds, Dallas, which acquired the chain from Ahold in 2004.
“They have an older store base, and they really need to invest in that,” she told SN.
She said she lowered her outlook to “negative, just based on weak operating trends.”
The company has lost some market share, she said, although the chain has a No. 1 or No. 2 share in most markets.
The outlook for competitive activity is mixed, with Wal-Mart Stores, Bentonville, Ark., slowing its pace of supercenter openings, creating optimism for the chain, but with a revitalized Winn-Dixie Stores, Jacksonville, Fla., adding uncertainty. Winn-Dixie emerged from bankruptcy last month.
A spokeswoman for Bi-Lo could not be reached for comment.
