PRESS RELEASE

WINN-DIXIE STORES, INC. | 5050 EDGEWOOD COURT | JACKSONVILLE, FLA. 32254 | (904) 783-5000

Winn-Dixie Stores, Inc., Reports Fourth Quarter and Fiscal Year 2010 Results

Highlights

JACKSONVILLE, Fla. (August 30, 2010) — Winn-Dixie Stores, Inc. (NASDAQ: WINN), today reported its financial results for the fourth quarter and fiscal year 2010, 13-week and 53-week periods, which ended on June 30, 2010.

Net sales for the 13-week fourth quarter of fiscal 2010 were $1.7 billion, an increase of $30.1 million, or 1.8% compared to the 12-week fourth quarter of fiscal 2009. This increase was due to the additional week in fiscal 2010. On a comparable 12-week basis, identical store sales from continuing operations, which exclude stores that opened or closed during the quarter, decreased 5.2% for the fourth quarter compared to the same period in the prior fiscal year.

Fourth quarter identical store sales were impacted negatively by increased competitive activity, as well as the Company’s decision to preserve gross margin rate through disciplined promotional practices. During the quarter, transaction count and basket size declined 4.2% and 1.0%, respectively. Identical store sales in the fourth quarter were impacted negatively by approximately 70 basis points due to a higher percentage of generic versus branded pharmaceutical products sold.

Net income for the 13-week fourth quarter of fiscal 2010 was $14.0 million, or $0.25 per diluted share, compared to net income of $9.4 million, or $0.17 per diluted share, for the 12-week fourth quarter of fiscal 2009. Adjusted EBITDA for the 13-week fourth quarter of fiscal 2010 was $41.3 million, compared to Adjusted EBITDA of $44.3 million for the 12-week fourth quarter of fiscal 2009.

Peter Lynch, Chairman, CEO, and President, said, “We were able to meet our financial guidance for the fiscal year through effective management of our promotional activity and by continuing to exercise discipline with respect to our overall expenses. However, the economic and competitive environment remained very difficult in the fourth quarter, and our decision to maintain gross margin rate negatively impacted our identical store sales significantly.”

Mr. Lynch continued, “In fiscal 2011, we are focused on improving sales by strategically adjusting our promotional practices in select categories. For the first eight weeks of fiscal 2011, the adjustments we have made have enabled us to generate a sequential improvement in identical store sales of approximately 200 basis points. As we move through the year, we will continue to implement additional initiatives to further improve current year sales trends and to position us to achieve sustainable and profitable sales growth over the long-term.”

Details of the Fourth Quarter Results

Gross profit for the 13-week fourth quarter of fiscal 2010 was $508.4 million, or 29.1% of net sales, compared to $500.4 million, or 29.2% of net sales, in the 12-week fourth quarter of fiscal 2009. The 10 basis point decline in gross profit primarily reflects an increase in retail cost inflation in meat and dairy, which was not fully reflected in the Company’s retail pricing due to competitive activity. The Company recorded a $4.4 million LIFO benefit during the fourth quarter of fiscal 2010, compared to a $3.3 million LIFO benefit in the fourth quarter of fiscal 2009.

Other operating and administrative expenses for the 13-week fourth quarter of fiscal 2010 were $493.0 million, an increase of $15.2 million compared to the 12-week fourth quarter of fiscal 2009. The increase in other operating and administrative expense was due primarily to an extra week of retail payroll and an increase in utilities due to an extra week of usage.

Fiscal Year 2010 Results

Net sales for the 53 weeks of fiscal 2010 were $7.2 billion, a decrease of $119.2 million, or 1.6%, as compared to the 52-weeks of fiscal 2009. On a comparable 52 week basis, identical store sales from continuing operations, which exclude stores that opened or closed during the year, decreased by 2.9% for fiscal 2010 as compared to fiscal 2009. This decrease was the result of a decline in transaction count and basket size of 2.3% and 0.6%, respectively.

Gross profit for the 53 weeks of fiscal 2010 as a percentage of net sales was 28.5%, which is unchanged from fiscal 2009. Other operating and administrative expenses were $2.0 billion for the 53-weeks of fiscal 2010, a decrease of $3.3 million compared to the 52 weeks of fiscal 2009.

Net income for the 53 weeks of fiscal 2010 was $28.9 million, or $0.52 per diluted share, compared to net income of $39.8 million, or $0.73 per diluted share, for the 52 weeks of

fiscal 2009. The $10.9 million decrease in net income is due to a prior year gain on an insurance settlement of $22.4 million ($13.8 million net of tax, or $0.25 per diluted share) that did not recur in fiscal 2010, lower gross profit driven by a decline in sales, and partially offset by lower tax expense due to a change in accounting rules.

Adjusted EBITDA for the 53 weeks of fiscal 2010 was $144.6 million, compared to Adjusted EBITDA of $164.2 million for the 52 weeks of fiscal 2009. This decrease was due primarily to lower sales, which the Company was unable to offset with higher gross margin and lower operating expenses.

As of June 30, 2010, Winn-Dixie had approximately $649.7 million of liquidity, comprised of $497.4 million of borrowing availability under its credit agreement and $152.3 million of cash and cash equivalents. Capital expenditures for fiscal 2010 were approximately $189.1 million.

Store Remodeling Program

Overview

Since the inception of the Company’s remodeling program in the second half of fiscal 2007, Winn-Dixie has completed 230 store remodels as of the end of fiscal 2010, which have upgraded and enhanced approximately half of its continuing operating stores based on the Company’s “fresh and local” strategy. The Company believes the remodel program is central to improving its brand image, transaction count, sales and profitability. The Company measures the performance of the remodel program based on cumulative sales lift and return on incremental invested capital (ROIIC). Included in the remodel results being reported are the operating results of 200 of the store remodels that had completed the grand reopening phase prior to the end of fiscal 2010. Of those 200 stores, 159 were offensive remodels and 41 were defensive remodels.

Remodel Performance

Since the inception of the remodeling program, the Company’s 159 offensive remodels have generated a weighted average sales increase of 7.0% on a cumulative basis, including an increase in transaction count of 3.0% and an increase in basket size of 3.9%. The Company’s 41 defensive stores have generated a weighted average sales decrease of 5.6% on a cumulative basis. Based on historical data, the Company estimates that its 41 defensive remodels were impacted negatively by 10.2% on a weighted average basis due to competitive openings. When adjusted for this impact, those 41 stores generated a weighted average sales increase of 4.5% on a cumulative basis. In total, the Company’s 200 remodels have generated a weighted average sales increase of 4.0%, or 6.4% when adjusted for competition in the defensive remodels, since inception.

ROIIC is a measure used by management to evaluate the overall profitability of the store remodeling program, the effectiveness of capital deployed and the future allocation of capital. The return is calculated by dividing the change in operating income plus depreciation and amortization (numerator) by the capital expenditures (denominator). Since the inception of the program, the offensive remodels have generated a ROIIC of

16.3%, and the defensive remodels, when adjusting for the competitive impact, have generated ROIIC of 11.4%. In total, the Company’s remodel program has generated a ROIIC of 11.3%, or 15.2% when adjusted for competition on the defensive remodels, since inception.

Fiscal 2011 Remodel Program

In fiscal 2011, the Company plans to complete a total of 22 store remodels, including 17 stores that will include features from two new stores the Company opened during fiscal 2010 in Covington, Louisiana, and Margate, Florida. These two new stores are larger and more costly to build than the Company’s traditional remodels, and they offer expanded and upscale fresh departments – including quality produce, deli, meat and seafood – as well as other important attributes to attract new customers. The Company has designed its fiscal 2011 remodel program to include stores that will be located in areas that offer similar characteristics and shopper demographics as Covington and Margate, and which are expected to have a positive impact on the Company’s brand image throughout the markets in which they are located.

Mr. Lynch continued, “Our transformational Covington and Margate stores have generated great excitement and have provided key insights that we are incorporating into our fiscal 2011 and future remodel plans. We believe the improvements and added features of these stores have substantially enhanced our ability to attract new customers. In fiscal 2011, we will use the Covington and Margate format for the majority of our remodels because we believe they offer the potential to achieve higher returns than our previous remodels and will significantly improve our brand image.”

Fiscal 2011 Guidance

The Company expects Adjusted EBITDA for fiscal 2011, a 52-week period ending on June 29, 2011, to be in the range of $100 million to $130 million. Among other factors, the Company’s Adjusted EBITDA guidance range is based on its current expectation that identical store sales for fiscal 2011 will be slightly negative to slightly positive, and that gross margin will be approximately 28.2%.

Based on sales results in the first eight weeks of fiscal 2011, the Company does not expect to generate Adjusted EBITDA in the first quarter of fiscal 2011, which ends on September 22, 2010. The Company expects Adjusted EBITDA to improve during the remainder of the fiscal year based on sequential improvements in identical store sales as a result of adjusting its promotional practices and implementing additional sales initiatives. In addition, Adjusted EBITDA is expected to benefit from $12 to $17 million of annualized savings related to the Company’s previously announced 30 non-remodeled store closures and headcount reductions, which should begin to be realized in the second quarter. In addition, the Company expects to receive proceeds of approximately $10 million from asset sales including pharmacy prescription files.

Capital expenditures in fiscal 2011 are expected to be approximately $158 million, of which approximately $80 million is for the Company’s store remodeling program. The

additional $78 million is for retail store improvements and maintenance, IT systems, new stores, warehousing and transportation.

Conference Call and Webcast Information

The Company will host a live conference call and simultaneous audio webcast on Tuesday, August 31, 2010, from 8:30 AM to 9:30 AM Eastern Time. To access the simultaneous webcast of the conference call (a replay of which will be available later in the day), please go to the Company’s Investor Relations site at http://www.winndixie.com under “Investors”. Parties interested in participating in this call should dial-in ten minutes prior to the start time at 888.713.4214 or 617.213.4866 with access code 23570715. A recording of the call will be available on the Investor Relations section of the Winn-Dixie website starting at 11:30 AM Eastern Time from August 31 through September 7, 2010, and it can be accessed by calling 888.286.8010 or 617.801.6888. The replay access code is 36351608.

About Winn-Dixie

Winn-Dixie Stores, Inc., is one of the nation’s largest food retailers. Founded in 1925, the Company is headquartered in Jacksonville, FL. As of June 30, 2010, the Company operated 514 retail grocery locations, including more than 400 in-store pharmacies, in Florida, Alabama, Louisiana, Georgia, and Mississippi. For more information, please visit www.winndixie.com.

The Securities and Exchange Commission (“SEC”) has adopted rules related to disclosure of certain financial measures not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Such rules require all public companies to provide certain disclosures in press releases and SEC filings related to non-GAAP financial measures. We use the non-GAAP measure “Adjusted EBITDA” to evaluate the Company’s operating performance and it is among the primary measures used by management for planning and forecasting future periods. Adjusted EBITDA is defined as income from continuing operations before interest, income taxes, and depreciation and amortization expense, or EBITDA, and further adjusted for certain non-cash charges, reorganization items, self-insurance reserves, and items related to the Company’s emergence from bankruptcy. The Company believes the presentation of this measure is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by the Company’s management and makes it easier to compare the Company’s results with other companies that have different financing and capital structures or tax rates. In addition, this measure is also among the primary measures used externally by the Company’s investors, analysts and peers in its industry for purposes of valuation and comparing the results of the Company to other peers in its industry. Adjusted EBITDA is reconciled to Net Income on the attached schedules of this release.

Remodel Performance Calculations

Offensive remodels are stores that face direct competition in their operating markets, but did not face new competitive openings in the fiscal year in which the stores were remodeled. Defensive remodels are stores that face both existing competition and new competitive openings in their operating markets in the fiscal year in which the stores were remodeled, and they are designed to mitigate the negative impact of both existing and new competition.

For offensive and defensive remodels, sales lift is calculated by comparing the store’s sales following the completion of the grand re-opening phase to the store’s sales in the prior-year comparable period. When analyzing the impact of defensive remodels, the Company’s calculation of sales lift also includes an adjustment based on management’s assessment of the estimated sales impact of new competitive openings in the operating region during the first year of operations (adjusted sales lift). This assessment is based on the historical impact of competitive openings against non-remodeled Winn-Dixie stores.

Return on incremental invested capital (ROIIC) is a measure reviewed by management to evaluate the overall profitability of the store remodeling program, the effectiveness of capital deployed and the future allocation of capital. The return is calculated by dividing the change in operating income plus depreciation and amortization (numerator) by the capital expenditures (denominator).

Forward-Looking Statements

Certain statements made in this press release may constitute “forward-looking statements” within the meaning of the federal securities laws. These forward-looking statements are based on our current plans and expectations and involve certain risks and uncertainties. Actual results may differ materially from the expected results described in the forward-looking statements. These forward-looking statements include and may be indicated by words or phrases such as “anticipate,” “estimate,” “plan,” “expect,” “project,” “continuing,” “ongoing,” “should,” “will,” “believe,” or “intend” and similar words and phrases. There are many factors that could cause the Company’s actual results to differ materially from the expected results contemplated or implied by the Company’s forward-looking statements.

The Company faces a number of risks and uncertainties with respect to its continuing business operations and its attempt to increase its sales and gross profit margin, including, but not limited to: the Company’s ability to improve the quality of its stores and products; the Company’s success in achieving increased customer count and sales in remodeled and other stores; the results of the Company’s efforts to revitalize the corporate brand; competitive factors, which could include new store openings, price reduction programs and marketing strategies from other food and/or drug retail chains, supercenters and non-traditional competitors; the ability of the Company to effectively manage gross margin rates; the ability of the Company to attract, train and retain key leadership; the Company’s ability to implement, maintain or upgrade information technology systems; the outcome of the Company’s programs to control or reduce operating and administrative expenses and to control inventory shrink; increases in utility

rates, gasoline costs and food prices, which could impact consumer spending and buying habits and the cost of doing business; the availability and terms of capital resources and financing and its adequacy for the Company’s planned investment in store remodeling and other activities; the concentration of the Company’s locations in the southeastern United States, which increases its vulnerability to severe storm damage; general business and economic conditions in the southeastern United States, including consumer spending levels, population, employment and job re-growth in some of our markets, and the additional risks relating to limitations on insurance coverage following the catastrophic storms in recent years; the Company’s ability to successfully estimate self-insurance liabilities; changes in laws and other regulations affecting the Company’s business; events that give rise to actual or potential food contamination, drug contamination or food-borne illness; the Company’s ability to use net operating loss carryforwards under the federal tax laws; and the outcome of litigation or legal proceedings.

Please refer to discussions of these and other factors in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2010, and other Company filings with the SEC. These statements are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly revise or update these forward-looking statements, whether as a result of new information, future events or otherwise.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA):