Courthouse News Servicereports that when Winn-Dixie rents space in a shopping center, “The supermarket's lease at many of its locations contains a restrictive covenant prohibiting or sharply limiting the sales of 'staple or fancy groceries' by other tenants in the same shopping center. A majority of these leases contain an exception allowing the 'incidental' sale of grocery items not to exceed 10 percent of the square-foot area of the store.”
Winn-Dixie claims that stores such as Big Lots, Dollar Tree and Dollar General repeatedly violate such covenants by either selling grocery items or selling too many, and that, since 2005, the competition from such stores has cost Winn-Dixie $90 million in lost profits.
Not just food
But what exactly constitutes “groceries”-- are they food-only, or anything one generally finds for sale in American supermarkets? A federal judge in Miami interpreted groceries to only mean food, but the 11th Circuit Court, based in Atlanta, later reversed that decision. Judge Stanley Marcus wrote that according to Florida law, “'groceries' broadly includes food and 'many household supplies (as soap, matches, paper napkins).”
However, due to specific differences in various state laws, the court ruled, the anti-competition provisions Winn-Dixie demands in its leases cannot be enforced in Louisiana or Mississippi, only Florida. Floridians fond of buying soap, napkins or actual foodstuffs in discount stores might soon find their options limited, if they patronize shopping centers where Winn-Dixie does business.