Exhibit 99.1

Winn-Dixie Stores Reports Third Quarter Fiscal 2011 Results

3Q’11 Highlights:

JACKSONVILLE, Fla. (May 16, 2011) — Winn-Dixie Stores, Inc. (NASDAQ: WINN), today reported its financial results for the third quarter of fiscal 2011, a 12-week period that ended on April 6, 2011.

Net sales in the third quarter were $1.6 billion, essentially even compared to the same period in the prior fiscal year. Identical store sales, which exclude stores that opened or closed during the quarter, decreased 0.5% for the third quarter compared to the prior year period. The decline in identical store sales was attributable to a decrease in transaction count of 1.7%, which was mitigated by a 1.3% increase in basket size. Identical store sales were negatively impacted this quarter by competitive activity and other market factors, which were partially offset by inflationary price increases that were passed through in selected categories, an increase in sales in remodeled stores, and favorable results from the Company’s computer generated ordering and fuelperks! ® Rewards initiatives.

Adjusted EBITDA was $55.2 million in the third quarter of fiscal 2011, an increase of $4.1 million compared to the same period in the prior fiscal year.

Peter Lynch, Chairman, CEO, and President, said, “Overall, we are pleased with our third quarter results. We strategically managed our promotional activity and merchandising efforts in this inflationary environment to drive improvements in both Adjusted EBITDA and gross margin, while still offering good value to our guests. Based on year-to-date performance and positive fourth quarter-to-date identical store sales, we remain on track to achieve our financial guidance for the fiscal year.”

Mr. Lynch continued, “We continue to execute several strategic initiatives to position the company to achieve sustainable and profitable sales growth over the long-term. Our computer generated ordering system, fuelperks! ® Rewards program, and operational focus continue to improve our overall guest experience. Additionally, our transformational format stores continue to generate strong sales, reinforcing our confidence in the long-term financial and brand-building benefits of this program.”

Details of the Third Quarter Results

The Company reported net income of $23.4 million, or $0.42 per diluted share, compared to net income of $20.9 million, or $0.38 per diluted share, for the same period in the prior fiscal year. This includes a net loss of $0.2 million, or $0.00 per diluted share for discontinued operations, as compared to a net loss from discontinued operations of $1.2 million, or $0.02 per diluted share, in the third quarter of fiscal 2010.

For continuing operations, the Company reported net income of $23.5 million, or $0.42 per diluted share, which includes a deferred tax benefit of $9.7 million, or $0.17 per diluted share, reflecting a decrease in the Company’s valuation allowance on its deferred tax assets. Excluding this deferred tax benefit, the Company’s net income from continuing operations would have been $13.8 million, or $0.25 per diluted share.

Gross profit on sales in the third quarter was $465.8 million, an increase of $3.6 million compared to the same period in the prior fiscal year. As a percentage of net sales, gross margin was 28.7% in the third quarter, compared to 28.5% in the third quarter of fiscal 2010, an increase of 20 basis points. The increase in gross margin was attributable to the Company’s effective management of pricing and promotional mix, partially offset by a higher LIFO charge.

Operating and administrative expenses for the third quarter were $440.1 million, relatively unchanged from the same period in the prior fiscal year.

40-Week Results Ended April 6, 2011

Net sales for the 40 weeks were $5.3 billion, a decrease of $35.7 million compared to the same period in the prior fiscal year. Identical store sales for the 40 weeks, which exclude stores that opened or closed during the 40 weeks, decreased 1.1% compared to the same period in the prior fiscal year. The decline in identical store sales for the 40 weeks was attributable to a decrease in transaction count of 1.7%, partially offset by an increase in basket size of 0.6%.

Gross profit on sales for the 40 weeks was $1.5 billion, a decrease of $30.7 million compared to the same period in the prior fiscal year. As a percentage of net sales, gross margin for the 40 weeks was 27.9%, compared to 28.3% in the same period in the prior fiscal year, a decrease of 40 basis points. The decline in gross margin as a percentage of net sales was attributable primarily to a higher LIFO charge and an increase in other costs, including inventory shrink.

Operating and administrative expenses for the 40 weeks were $1.5 billion, an increase of $21.8 million compared to the same period in the prior fiscal year. The increase in operating and administrative expenses was due to an increase in payroll and payroll-related costs, an increase in prior-years’ self-insurance reserve adjustments and higher depreciation. These increases were partially offset by decreases in share-based compensation and other costs.

Adjusted EBITDA for the 40 weeks was $75.7 million compared to $108.3 million of Adjusted EBITDA for the same period in the prior fiscal year.

The Company reported a net loss of $77.4 million, or $1.39 per diluted share, compared to net income of $14.9 million, or $0.27 per diluted share, for the same period in the prior fiscal year. This includes a net loss from discontinued operations of $42.0 million, or $0.75 per diluted share, compared to a net loss from discontinued operations of $5.8 million, or $0.11 per diluted share, for the same period in the prior fiscal year.

For continuing operations, the Company reported a net loss of $35.4 million, or $0.64 per diluted share, which includes a deferred tax expense of $11.5 million, or $0.21 per diluted share, to reflect an increase in the Company’s valuation allowance on its deferred tax assets. Excluding this deferred tax expense, the Company’s net loss from continuing operations would have been $23.9 million, or $0.43 per diluted share.

Liquidity and Capital Resources

As of April 6, 2011, Winn-Dixie had approximately $532.2 million of liquidity, comprised of $358.7 million of borrowing availability under its credit agreement and $173.5 million of cash and cash equivalents. On March 18, 2011, the Company completed an amendment of its previous credit facility, which was due to mature in November 2011, providing for a $600.0 million senior secured revolving credit facility. The amended credit facility matures in March 2016. The Company does not expect any borrowings under its credit facility during the current fiscal year other than fees charged by the lender.

Fiscal 2011 Guidance

As previously announced, the Company expects Adjusted EBITDA for fiscal 2011, a 52-week period ending on June 29, 2011, to be at the lower end of 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 the expectation of a LIFO charge in the fourth quarter of fiscal 2011, compared with a LIFO benefit in the same period last year.

Capital Expenditures

Capital expenditures for fiscal 2011 are now expected to be approximately $115.0 million, a $17.0 million decrease from the Company’s previous estimate, due to the timing of certain expenditures previously planned to occur in fiscal 2011 that are now expected to occur in fiscal 2012. Two of the 17 previously announced transformational format stores are nearing completion. The groundwork has been laid for the remaining 15 transformational format stores to be completed in the coming months.

Conference Call and Webcast Information

The Company will host a live conference call and simultaneous audio webcast on Tuesday, May 17, 2011, 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 section 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 888-679-8035 or (International) 617-213-4848. The access code is 45259377. A recording of the call will be available on the Investor Relations section of the Winn-Dixie website from May 17, 2011, through May 24, 2011; it can also be accessed by calling 888-286-8010 or 617-801-6888. The replay passcode is 69656330.

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 April 6, 2011, the Company operated 484 retail grocery locations with 75 liquor stores and four fuel centers at the retail stores and 379 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.

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, the Company’s Quarterly Report on Form 10-Q for the 16 weeks ended January 12, 2011, 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.

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