Dollar General has been selling groceries in Florida for some time now. And Jacksonville-based Winn-Dixie Stores has finally had enough.
On May 20, Winn-Dixie (Ticker: WINN) filed suit in the U.S. District Court for the Southern District of Florida against Dollar General Corp.'s parent company Dolgencorp LLC, accussing the Goodlettsville-based retailer of "intentionally and continually" violating Winn-Dixie's "Grocery Exclusive" arrangment, a lease provision which is an integral part of all Winn-Dixie strip center leases.
Dollar General Corp. spokeswoman Tawn Earnest said in an email to NashvillePost.com that Dollar General strongly disagrees with the complaint and plans a rigorous defense. Messages were left for Thomas E. Warner, of West Palm Beach, Fla. firm Carlton Fields, who is representing Winn-Dixie. NashvillePost.com could not connect with Warner prior to deadline.
At issue is Winn-Dixie's exclusive grocery selling rights in 100 Florida strip centers. As far as the regional grocer is concerned, there is no battle to be waged.
"Winn-Dixie always signs leases with exclusive grocery rights provisions and Dollar General has knowingly violated this arrangment," said Hunter Robinson, communications specialist for Winn-Dixie, which runs about 500 stores in five states.
Typically, when an anchor tenant moves into or is originally part of a strip center, that anchor tenant has certain rights and privileges other tenants in the same strip center don't have. The logic is that anchor tenants draw more customers than their neighbors and so get preference in certain matters, especially as those matters relate to competition.
It's not that other tenants are precluded from selling any grocery item in their stores, it's a matter of space and distance. In every state where Winn-Dixie is the anchor tenant in a strip center, these provisions exist and they vary. In Florida, the Dollar General has to be at least 500 feet away from Winn-Dixie or the store cannot devote more than 10 percent of its floor space to selling groceries.
Winn-Dixie is seeking an unspecified amount in damages or an injunction preventing Dollar General (Ticker: DG) from selling groceries.