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United States

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended June 30, 2004

OR

For the transition period from              to             

Commission File Number 1-3657

WINN-DIXIE STORES, INC.

(Exact name of registrant as specified in its charter)

(904) 783-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2)    Yes  x    No  ¨.

The aggregate market value of the common stock held by non-affiliates of the registrant, based upon the closing sale price of common stock on January 7, 2004, as reported on the New York Stock Exchange, was approximately $850,446,571.

As of August 20, 2004, the registrant had outstanding 142,043,551 shares of common stock.

DOCUMENTS INCORPORATED BY REFERENCE: Portions of the registrant’s Proxy Statement for the 2004 Annual Meeting of Shareholders are incorporated by reference in Part III hereof.

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WINN DIXIE STORES, INC.

ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JUNE 30, 2004

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PART I

Unless specified to the contrary, all information reported in Part I of this Annual Report on Form 10-K is as of June 30, 2004, which was the end of our most recently completed fiscal year.

ITEM 1: BUSINESS

GENERAL

Winn-Dixie Stores, Inc. and its subsidiaries (which may be referred to as “we,” “us” or “our Company”) is a food and drug retailer operating in the southeastern United States and the Bahama Islands. We operate primarily under the “Winn-Dixie” and “Winn-Dixie Marketplace” banners. According to published reports, we are the eighth largest food retailer in the United States and one of the largest in the Southeast, based on revenues.

We have determined that our operations are within one reportable segment. Accordingly, financial information on segments is not provided.

CORE RETAIL MARKETS

Store Operations

Substantially all of our stores offer grocery, meat, seafood, produce, deli, bakery, floral, health and beauty and other general merchandise items. We offer national brands as well as our own private label products. Most of our stores include a pharmacy. Many stores offer photo labs and other special service departments. We have 59 liquor stores and 27 fuel centers in our core retail markets, as defined below.

As detailed in our asset rationalization plan which was approved by the Board of Directors and announced in April 2004 and discussed below, we are currently in the process of exiting either by sale or closure stores located in market areas we have designated as non-core. Those stores remaining are denoted as core. We also identified a number of underperforming stores within areas identified as core markets which will also close under the plan. The references to “core” and “non-core” throughout this document refer to these terms as detailed in the asset rationalization plan.

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The following chart identifies each of our core markets by state and designated marketing area (DMA^®), the number of stores operating in each DMA and the banners under which they operate. It also gives the count of stores in non-core market areas. We operate grocery warehouse stores under the “SaveRite” banner and most of our Bahama stores under the “City Markets” banner.

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The following chart provides selected information relating to our retail store base for the last five fiscal years:

Beginning in fiscal 2004, a remodel is defined as a major project with costs ranging from $750,000 to $2.5 million. The 331 image makeovers completed in fiscal 2004 were at a cost of approximately $50,000 to $250,000 each. Prior to fiscal 2004, projects of the scale of an image makeover were generally included as remodels and are reflected as such in the above table for fiscal years 2003 and earlier.

Merchandising

We offer national brands as well as our own private label products. These products are delivered through our distribution centers or directly from manufacturers and wholesalers.

Our merchandising strategy is to improve our perishable product offerings and merchandising programs, particularly in our delis and bakeries, and to enhance product assortment throughout the store by focusing on the specific needs of the customers in the neighborhood of each store. We are testing our efforts in this regard in our lead market of 92 stores in the Miami-Ft. Lauderdale DMA, as described below.

An important aspect of our merchandising efforts is our private label product line. We have developed a line of over 3,000 private label products. We are in the process of consolidating the number of brands under which these products are marketed to four primary names: Winn-Dixie Prestige, Winn-Dixie, Thrifty Maid and Chek. The Winn-Dixie Prestige line of products includes a limited number of specialty items such as premium ice creams. Our Winn-Dixie line of products includes dairy, pasta, cereal, snacks, and peanut butter, as well as other quality products. The Thrifty Maid line of products includes canned fruits and vegetables. The Chek line of products consists of carbonated beverages.

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Marketing

We use most forms of mass media and selected forms of highly targeted media for our retail advertising. We also incorporate major sponsorships into our marketing plan, such as the Jacksonville Jaguars, the Tampa Bay Buccaneers and the Super Bowl. Marketing campaigns are executed on both a regional and local basis and are often tailored to individual markets and customer demographics.

Strategic Initiatives

We are developing and pursuing five strategic initiatives announced during fiscal 2004. These initiatives are asset rationalization, expense reductions and three brand-related initiatives: customer service programs, image makeovers, and brand positioning.

Asset Rationalization

During the third quarter, we conducted a thorough market-by-market review of our operations, in which we classified each DMA as core or non-core based on an evaluation that examined market size, competitive considerations, demographic trends, and potential for growth. In evaluating our store base at that time, we considered many key factors, including market share, profitability, real estate quality, potential exit costs and other financial factors. The purpose of this initiative is to identify and refocus on the core markets that present our Company with the best opportunities for success, and to pinpoint and exit the non-core markets in which we have a low market share and limited opportunities to gain share. Core markets are generally where we maintain a 1^st, 2^nd or 3^rd market share position, or where we believe there may be future strategic opportunities to become a market leader. Non-core markets represent areas where we have limited opportunities to gain market share or are unprofitable in the aggregate.

On April 23, 2004, the Company’s Board of Directors approved a plan under which Winn-Dixie is focusing on a core base of stores across 36 DMAs and the Bahamas. Under the plan, the Company will exit a total of 156 stores, 111 of which are in 16 non-core DMAs and 45 of which are under-performing stores within core DMAs. During the fourth quarter, we began to exit these stores through sale or closure. As of August 1, 2004, we had completed the sale of nine and the closure of 23 of the identified locations.

In addition, as part of the asset rationalization plan, we are exiting three of our 14 distribution centers located in Louisville, Kentucky; Clayton, North Carolina; and Sarasota, Florida. As of August 1, 2004, we had ceased operations at two of the distribution centers.

We also designated our manufacturing operations as non-core and are pursuing the sale of our Dixie Packers, Crackin’ Good Bakers, Crackin’ Good Snacks, and Montgomery Pizza operations. As of August 1, 2004, the Miami Dairy operation was consolidated into other dairies and the Greenville Ice Cream operation was in the process of being consolidated. We expect to complete these sales or exit these facilities by April 2005.

Following the asset rationalization process, our operating area will include Florida, Alabama, Louisiana, Georgia, and certain areas of North Carolina, South Carolina, Mississippi, Tennessee, Virginia and the Bahamas.

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Brand-Related Initiatives

We are pursuing three strategic brand-related initiatives aimed at positioning Winn-Dixie as a neighborhood grocer competing on a combination of convenience, quality and price. These initiatives include: (1) improving our in-store customer service, (2) an image makeover program for our stores, and (3) improving our brand positioning. We are implementing, testing and refining the new initiatives in our lead market of 92 stores in the Miami-Ft. Lauderdale DMA. Our lead market program is designed to test and refine our new approach and measure its impact on a smaller scale before moving forward with the program throughout our core markets.

We are introducing into our lead market stores new product offerings and merchandising programs to enhance our perishables offerings, focusing in particular on our delis and bakeries. We also recognize the need to improve our store operating model to consistently deliver a higher quality customer shopping experience and personal, friendly service across all stores. We are testing these new offerings and merchandising, as well as new training, recruiting and performance management initiatives in our lead market.

In fiscal 2004, we launched an image makeover program to improve lighting, install produce bins, paint store interiors / exteriors and replace outside signage. We have now modified our image makeover program in the lead market to complement our other initiatives. Our lead market image makeover program also enhances the décor in the bakery and deli departments, adds registers in these departments, installs or upgrades self check out services and incorporates additional enhancements throughout the store. We anticipate that in fiscal 2005 our image makeover activities will be focused primarily in the lead market.

The first eight stores to contain the elements of our branding initiative in the lead market were completed on July 22, 2004. We anticipate that all stores in our lead market will include these new programs and offerings by March 2005. Given the size of the lead market and the implementation schedule, we do not anticipate recognizing any material financial benefit from this initiative in fiscal 2005.

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Information Technology

We invest in technology and information systems to support our business. During 2004, we continued our investment in a new buying and billing system and labor management and scheduling systems, which are substantially complete. We also continued our investment in an inventory management and pricing system, our enterprise data warehouse and our Customer Reward Card program.

In 2004, we fully equipped our truck fleet with onboard computers that use a Global Positioning System to provide direct communication with drivers. This technology allows us to effectively route store deliveries while closely monitoring truck mileage and expenses.

We continue to use several online programs that enhance customer service, such as our online pharmacy program for customers to access the Winn-Dixie pharmacy services, and Party ONline, an online ordering service to assist customers with planning holiday parties. Our Web site also features fresh flowers from FTD, the world’s largest floral company.

Distribution

In connection with our asset rationalization plan, we identified three of our 14 distribution facilities to be sold and/or closed. These facilities are located in Louisville, Kentucky; Clayton, North Carolina; and Sarasota, Florida. As of August 1, 2004 we have closed the Clayton and Sarasota facilities. Our remaining network of regional distribution centers will serve our core retail markets.

Upon completion of the asset rationalization plan, we will operate 11 distribution centers (10 in the United States and one in the Bahamas) which collectively provide the majority of all products to our stores.

Manufacturing

In connection with our asset rationalization plan, we undertook a comprehensive review of our manufacturing operations and determined that these operations are not fundamental to our core business of operating supermarkets. Products currently manufactured in facilities listed as part of the 2004 Restructure in the following chart will be purchased from third parties subsequent to closure.

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The following table reflects our manufacturing operations, including those detailed in our asset rationalization plan:

Employees

We employ approximately 89,000 associates, of whom approximately 36,000 are employed on a full-time basis and 53,000 on a part-time basis. We consider our employee relations to be good.

None of our U.S. employees are covered by a collective bargaining agreement. We have a collective bargaining agreement in place covering nine of our Bahamas stores representing approximately 345 employees.

Trademarks

We actively enforce and defend our rights in our intellectual property portfolio, which is an important asset. In addition to the Winn-Dixie and SaveRite trademarks, we own approximately 65 other trademarks which are registered or pending as applications in the United States Patent and Trademark Office.

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Suppliers and Raw Materials Sources

We receive the products we sell in our stores and the raw materials we use in our manufacturing operations from a number of sources. In general, we are not dependent on a single or relatively few suppliers. We believe that our products and raw materials generally are available in sufficient supply to adequately meet customer demand.

Environmental Matters

We are subject to federal, state and local environmental laws that apply to property ownership, property development and store operations. We may be subject to certain environmental regulations regardless of whether we lease or own stores or land or whether environmental conditions were created by us, the owner or a prior tenant.

We believe that compliance with federal, state and local environmental laws and regulations has not had a material effect on our capital expenditures, earnings or competitive position. We are not aware of any environmental condition at any of our properties that could be considered material. However, it is possible that the environmental investigations of our properties might not have revealed all potential environmental liabilities or might have underestimated any potential environmental issues. It is also possible that future environmental laws and regulations or new interpretations of existing environmental laws will impose material environmental liabilities on us or that current environmental conditions of properties that we own or operate will be affected adversely by hazardous substances associated with other nearby properties or the actions of unrelated third parties. The costs of defending any future environmental claims, performing any future environmental remediation, satisfying any environmental liabilities, or responding to changed environmental conditions could materially adversely affect our financial condition and operating results.

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Government Regulation

We are subject to regulation by a number of federal, state and local government agencies. Our stores also are subject to laws regarding zoning, land use, pharmacy operations and alcoholic beverage sales, among others. We believe that we are in material compliance with these laws and regulations.

Competition

We generally compete based on location, product quality, service, price, convenience, product variety and store condition. The number and type of competitors vary by location and competitive position varies according to individual operating markets.

The supermarket industry is highly competitive and generally characterized by high inventory turnover and narrow profit margins. We compete directly with national, regional and local supermarket chains, and independent supermarkets. We also compete with supercenters and other non-traditional grocery retailers such as dollar discount stores, drug stores, convenience stores, warehouse club stores and conventional department stores. Beyond grocery retailers, we also face competition from restaurants and fast food chains due to the increasing trend of consumers purchasing and consuming food away from home.

Seasonality

Due to the influx of winter residents to the Sunbelt, particularly to Florida, and increased purchases of food items for the Thanksgiving and Christmas holiday seasons, we usually experience an increase in sales during the months of N