US supermarket chains Winn-Dixie, Tops owners preparing for bankruptcy

Two US supermarket chains are readying bankruptcy filings, according to people with knowledge of the matter, a sign of the mounting pressures in the grocery industry. Bi-Lo, the company behind the Winn-Dixie chain, is preparing for a filing as soon as March, according to the people. The owner of Tops Friendly Markets, meanwhile, could potentially seek court protection from creditors as soon as this month, people familiar with that situation said. With low margins and ample competition, the grocery business has always been challenging. But now the industry is contending with a more aggressive push by big-box retailers and Amazon.com, which acquired Whole Foods last year to give it a larger brick-and-mortar presence. The moves threaten to force older chains to either consolidate or revamp their operations. As part of the upheaval, Bi-Lo is planning to shut almost 200 stores — either before or after its filing — one person said.

The business, which went bankrupt in previous incarnations in 2005 and 2009, may still find a way to restructure its debt out of court. Bi-Lo is labouring under more than $1 billion in debt following its 2005 buyout by Lone Star Funds. The company and its creditors have held talks to discuss a possible debt-to-equity swap, as well as alternatives such as asset sales, Bloomberg reported last year. Lone Star declined to comment. A representative for Bi-Lo parent company Southeastern Grocers didn’t immediately respond to a request for comment. Tops declined to comment.