Gimme shelter: Winn-Dixie was able to run to bankruptcy court; unfortunately, it may not be able to hide.

Writing Winn-Dixie's obituary has been something of a pastime in the industry for a decade or more, so it might seem a bit reckless to predict the Jacksonville, Fla.-based chain's final doom yet again. But at this point it's hard to see a better outcome.

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Any supermarket operator that's faced with cash flow problems, nervous vendors, and competition on price from Wal-Mart and on everything else from Publix has pretty much got its back to the wall. Winn-Dixie admitted that publicly on President's Day when it announced it was seeking shelter under Chapter 11 of the Bankruptcy Act. That came not long after the chain reported comps in a negative area that could be described as frightening, a development that drove already-worried creditors and suppliers closer to the panic threshold.

CEO Peter Lynch, the longtime Albertsons exec who had been running Winn-Dixie for a bit over two months, tried to put the best face on the situation, saying in a company announcement, "We intend to use this reorganization process to take the actions necessary to position Winn-Dixie for future success. This includes achieving significant cost reductions, improving the merchandising and customer service in all locations and generating a sense of excitement in the stores."

Winn-Dixie has been threatening to do that kind of stuff for years. If it had ever followed through, we'd all be talking about some other chain's problems. Lynch may be the guy who could actually make it happen, but time is his worst enemy. In the years it would take Winn-Dixie to get its act together, Wal-Mart will have built more supercenters and Publix will have continued on its relentless course of being Publix. No conventional chain can beat Wal-Mart on price, and it's something of a mystery why anyone who has access to a Publix would shop anywhere else, although some people apparently do.

When the bankruptcy filing was announced, newspapers across Florida jumped on the story. Many interviewed shoppers who had given up on Winn-Dixie for a number of reasons, all of them familiar in cases where a supermarket chain shifts its focus from customers to costs. Simplified, the complaints went something like this: In Publix there's always someone to help you; in Wal-Mart you're on your own, but the stuff is dirt cheap; in Winn-Dixie you're just on your own.

Correcting a situation like this requires having a large majority of the employees on board with the program. They've got to be focused, interested and intent on making customers want to come back. That's a lot to ask of people who know they might arrive at work any day to hear that their store is closing and they're headed for the unemployment line. Winn-Dixie's initial plan was to keep all 920 stores open, but a company in such sorry financial condition is going to have to rid itself of any unit that's underperforming. You don't usually get to Chapter 11 unless a lot of your stores aren't hacking it.

There are a number of possible outcomes to this unfortunate situation. The most likely--and the saddest--seems to be that Winn-Dixie will go out of business. It's hard to see how anyone other than a competitor could take satisfaction in the demise of a once-proud 80-year-old icon of regional supermarketing. The landscape is already littered with reminders of how the business is changing, and not necessarily for the better.

A healthy chain could acquire Winn-Dixie, but raising that possibility raises this question: Who would want it? Winn-Dixie is damaged goods. Even if solid strategic reasons can be found for an out-of-market company to buy the chain--rumors have already circulated about Kroger--convincing a board of directors that the stockholders won't boil them in oil for taking such a risk could be tricky.

Winn-Dixie could slim down, jettisoning its unprofitable and out-of-date stores to focus on a manageable core of new and remodeled supermarkets that actually could hold their own in the marketplace. This would require a substantial reduction in store count, and it's anybody's guess whether the cost savings would exceed the loss in volume and purchasing power. That's the only way to cut the top line without cutting the bottom line, and Winn-Dixie's bottom line probably can't survive any further damage.

It may be wishful thinking, but perhaps one possibility is that Winn-Dixie will just continue to muddle along. That's hardly a dynamic business model, but think about it for a minute: What supermarket chain in America has done a better job of muddling along than Winn-Dixie? A decade ago it was the retailer most often mentioned as the next major acquisition or the next major business failure. Well, Winn-Dixie is still here, while a lot of chains whose deaths weren't predicted are not.

Maybe, just maybe, Winn-Dixie can keep muddling along until Lynch has the time to remake the chain into the vigorous competitor a lot of us would like to see it become.

Tom Weir can be reached at [e-mail].