Publix

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Re: Publix

Post by buckguy »

Publix has a lot of social capital from people who have a connection to Florida. Moving northward makes more sense for them than going West. Their mean store size has been inching up over time and probably isn't much different from a lot of the stores with which they compete.

They could do quite well in DC. They're a bit like the pre-Ahold Giant. H-T has fans in DC despite high prices and relatively small stores--personally I never see the point of going there and I think Publix generally runs better operations. Publix basically destroyed Harris-Teeter's entry in to Atlanta--H-T had strong produce, but variable deli-bakery (I twice got food poisoning from them). WF is a bigger factor for their customers in DC than in other cities, but WF's problems in growing their business further and Publix's past experience with them as a competitor could be a positive. Publix's willingness to go into smaller locations than others could help them go into DC and more desirable inner suburbs, which would be where they would be the most competitive.
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Re: Publix

Post by storewanderer »

H-T in DC is pathetic compared to H-T in the Carolinas. The perimeter offerings don't even come close. It will be interesting to see how Publix does in DC and who they knock out, if anyone. They do not strike me much like Giant MD at all as Giant MD operated much, much higher volume stores in its prime running close to the million a week mark in sales routinely. The average Publix isn't exactly a high volume operation and isn't designed to be with small perimeter departments and little holding power throughout.

What I give Publix credit for is its slow, ongoing, geographic expansion that is largely organic. More than any other grocer has done. At this rate Publix will penetrate the entire US in another 30-40 years if they can keep this up. Slow and steady wins the race...
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Re: Publix

Post by buckguy »

Giant operated a wide variety of stores in its pre-Ahold days. I lived in DC during the 90s and Giant ran relatively few clunkers, but they had other stores that didn't necessarily do huge volumes. The Van Ness store, despite being cheaper than Safeway was not what I'd consider a big volume store. They continued to operate small stores in the 16K square foot range in a variety of locations, inner city and suburban. And although none of the DC chains had good produce programs at that time (and frankly don't now), Giant did have strong bakery-deli departments, which is no longer the case. Publix could fill that niche by modestly upping their game. there is a lot of connection to the Carolinas in DC which may explain why H-T does well with such underwhelming stores, not to mention Ahold's crippling of Giant, but I think if Publix chose to enter the market they would be a more formidable competitor.
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Re: Publix

Post by pseudo3d »

storewanderer wrote:Slow and steady wins the race...
Not to drag politics into this, but that didn't work out so well for Jeb.

In all seriousness, though, they've only managed to make it into mid-Virginia via buying (most of) Martin's, and if those stores underperform, then a D.C. market approach is delayed or won't happen. D.C. must be a tough market to crack as the market leaders, Giant and Safeway, have both been there since the 1930s (Safeway's existence in D.C. has always been a curious one, having been done via acquisition but never ever been "in contact" with the main Safeway store fleet even in the best of times). Harris-Teeter, on the other hand, while I've never been to it, it seems to perform poorly with stores on in the "periphery".

It would be a challenge to actually enter the suburbs and the city itself, Safeway and Giant are relatively well-entrenched. Shoppers might work, but that would depend on SuperValu's decision to sell, the union issue, and the potential to be stuck with some lousy stores. Even if SuperValu was willing to sell Shoppers off to Publix, I would expect to see some heavy union resistance to that that could jeopardize the deal.

Speaking of Giant, though, is it within the realm of possibility that Ahold Delhaize decides to offload its U.S. holdings and could sell Giant to Publix? It sure didn't have a problem selling Martin's!
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Re: Publix

Post by Knight »

buckguy wrote:Publix has a lot of social capital from people who have a connection to Florida. Moving northward makes more sense for them than going West.
Publix is expanding both northward and westward. It would not be expanding westward if it opened its McCalla. Alabama, distribution center.

McCalla is a high velocity warehouse. Stores in Alabama, Florida, Georgia, and Tennessee that have been using Jacksonville, Florida, and Dacula, Georgia, for high velocity warehouses are or will be using McCalla. Dacula's high velocity warehouse has room to support the additional stores in North Carolina and Virginia short-term. Another high velocity warehouse will be necessary soon.

Publis expanding into Mississippi, Kentucky, and Arkansas and further expanding in Tennessee into Memphis should occur soon.
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Re: Publix

Post by Knight »

storewanderer wrote: What I give Publix credit for is its slow, ongoing, geographic expansion that is largely organic. More than any other grocer has done. At this rate Publix will penetrate the entire US in another 30-40 years if they can keep this up. Slow and steady wins the race...
I can see Publix speeding up the opening of additional stores as it expands into additional states and further expands in existing states. Two thousand stores should be doable in ten years.
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Re: Publix

Post by Knight »

pseudo3d wrote: In all seriousness, though, they've only managed to make it into mid-Virginia via buying (most of) Martin's, and if those stores underperform, then a D.C. market approach is delayed or won't happen.

Speaking of Giant, though, is it within the realm of possibility that Ahold Delhaize decides to offload its U.S. holdings and could sell Giant to Publix? It sure didn't have a problem selling Martin's!
The Richmond, Virginia, area should not be a problem for Publix. Supermarkets Kroger and Walmart Neighborhood Market and hypermarket Walmart Supercenter would be Publix's major competitors. Ahold Delhaize will be in trouble as Food Lion struggles and Martin's has fewer stores or exits the region.
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Re: Publix

Post by storewanderer »

I am not sure we will see Publix undertake more rapid expansion. Part of their formula seems to be to move at a steady pace and not over-do things. Kroger is beating them in some places, too, the past 5 or so years. Where they compete head to head, the Kroger traffic is typically far more than that of Publix. Kroger Marketplace vs. a Publix is really no contest; dead Publix in that case. It may depend what opportunities come up for them as to if they would consider leapfrogging. For instance if a certain highly leveraged money losing chain with thousands of stores that keeps putting off its IPO lets go of some regions, I could certainly see them interested in some of that real estate (but definitely not interested in those stores as operating stores).

I have not been terribly impressed with the produce at Publix and its meat looks pretty ho hum too. The deli may have pretty good sandwiches and have Boar's Head but they don't even have by the pound salads (just prepack stuff). The bakery makes some great stuff but they don't make much so good luck finding what you want if you don't get there early. Publix is not a place I'd go for center store shopping unless I only needed a few things. They do not strike me as a place to go for a big shop. Kroger is the place to go for a big shop that skews toward center store and improvements on perimeter in the Kroger Marketplace stores help make their perimeter stand out too (I think they have a long ways to go in improving quality though, but they have made progress).

I have noticed when I go to FL I do not bring anything home from Publix. I buy what I need for the trip and that is it. This is unusual as I usually accumulate a few groceries or other items to bring home after trips walking stores for one reason or another; be it interesting regional items from Chicago or the Northeast, or well priced private label items from a distant chain, or some Oklahoma Peaches (yum). But Publix did not leave me with anything I was interested in bringing home, well, except the Key Lime Pie in regular or mango flavor, which did not make it to the airport.

What would be interesting to see would be how much would Publix leapfrog. I think they could do pretty well in the Northeast. I am not sure how Publix would do in Texas, Chicago, or even on the west coast.
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Re: Publix

Post by pseudo3d »

storewanderer wrote:I am not sure we will see Publix undertake more rapid expansion. Part of their formula seems to be to move at a steady pace and not over-do things. Kroger is beating them in some places, too, the past 5 or so years. Where they compete head to head, the Kroger traffic is typically far more than that of Publix. Kroger Marketplace vs. a Publix is really no contest; dead Publix in that case. It may depend what opportunities come up for them as to if they would consider leapfrogging. For instance if a certain highly leveraged money losing chain with thousands of stores that keeps putting off its IPO lets go of some regions, I could certainly see them interested in some of that real estate (but definitely not interested in those stores as operating stores).

I have not been terribly impressed with the produce at Publix and its meat looks pretty ho hum too. The deli may have pretty good sandwiches and have Boar's Head but they don't even have by the pound salads (just prepack stuff). The bakery makes some great stuff but they don't make much so good luck finding what you want if you don't get there early. Publix is not a place I'd go for center store shopping unless I only needed a few things. They do not strike me as a place to go for a big shop. Kroger is the place to go for a big shop that skews toward center store and improvements on perimeter in the Kroger Marketplace stores help make their perimeter stand out too (I think they have a long ways to go in improving quality though, but they have made progress).

I have noticed when I go to FL I do not bring anything home from Publix. I buy what I need for the trip and that is it. This is unusual as I usually accumulate a few groceries or other items to bring home after trips walking stores for one reason or another; be it interesting regional items from Chicago or the Northeast, or well priced private label items from a distant chain, or some Oklahoma Peaches (yum). But Publix did not leave me with anything I was interested in bringing home, well, except the Key Lime Pie in regular or mango flavor, which did not make it to the airport.

What would be interesting to see would be how much would Publix leapfrog. I think they could do pretty well in the Northeast. I am not sure how Publix would do in Texas, Chicago, or even on the west coast.
From where Publix and Albertsons are geographically located now, they're unlikely to give up the ~125 store Eastern Division unless things really start going downhill, and while I could plausibly see the Houston division being sold off to Publix (with the Austin stores being rebranded as possibly Tom Thumb and sent over to South), Publix going as far west as Houston doesn't seem to be in the cards right now.
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Re: Publix

Post by architect »

pseudo3d wrote:
storewanderer wrote:I am not sure we will see Publix undertake more rapid expansion. Part of their formula seems to be to move at a steady pace and not over-do things. Kroger is beating them in some places, too, the past 5 or so years. Where they compete head to head, the Kroger traffic is typically far more than that of Publix. Kroger Marketplace vs. a Publix is really no contest; dead Publix in that case. It may depend what opportunities come up for them as to if they would consider leapfrogging. For instance if a certain highly leveraged money losing chain with thousands of stores that keeps putting off its IPO lets go of some regions, I could certainly see them interested in some of that real estate (but definitely not interested in those stores as operating stores).

I have not been terribly impressed with the produce at Publix and its meat looks pretty ho hum too. The deli may have pretty good sandwiches and have Boar's Head but they don't even have by the pound salads (just prepack stuff). The bakery makes some great stuff but they don't make much so good luck finding what you want if you don't get there early. Publix is not a place I'd go for center store shopping unless I only needed a few things. They do not strike me as a place to go for a big shop. Kroger is the place to go for a big shop that skews toward center store and improvements on perimeter in the Kroger Marketplace stores help make their perimeter stand out too (I think they have a long ways to go in improving quality though, but they have made progress).

I have noticed when I go to FL I do not bring anything home from Publix. I buy what I need for the trip and that is it. This is unusual as I usually accumulate a few groceries or other items to bring home after trips walking stores for one reason or another; be it interesting regional items from Chicago or the Northeast, or well priced private label items from a distant chain, or some Oklahoma Peaches (yum). But Publix did not leave me with anything I was interested in bringing home, well, except the Key Lime Pie in regular or mango flavor, which did not make it to the airport.

What would be interesting to see would be how much would Publix leapfrog. I think they could do pretty well in the Northeast. I am not sure how Publix would do in Texas, Chicago, or even on the west coast.
From where Publix and Albertsons are geographically located now, they're unlikely to give up the ~125 store Eastern Division unless things really start going downhill, and while I could plausibly see the Houston division being sold off to Publix (with the Austin stores being rebranded as possibly Tom Thumb and sent over to South), Publix going as far west as Houston doesn't seem to be in the cards right now.
I was actually wondering about the same thing. Although I could see Albertsons unloading both their Houston and Louisiana stores to Publix, I see little incentive for Publix to expand all the way to Houston at this point. If they were to move into the market, they would have to find some way to differentiate themselves from both Kroger and HEB, which would be extremely difficult considering the strong market share and local focus which both chains have built up at this point. Texas shoppers also will likely not respond well to Publix's higher pricing, considering the typically low prices found in most of the state due to competition between HEB, Aldi and Walmart. If such a move did happen, my guess if that the Austin-area Randalls stores would retain their branding and be transferred to the South Division, while the Houston and Lousiana stores would be rebranded by Publix. Publix has no history of retaining the brands of acquired stores.

At this point, I see further expansion into the DC market, along with Kentucky, North Carolina, Tennessee, Alabama and possibly Jackson, MS and portions of Louisiana as their primary focus. Outside of Little Rock, Arkansas simply doesn't have enough markets with high discretionary income floating around for Publix to be successful, and the same factor will likely keep Publix's store count in Memphis low if they choose to expand there. Texas is an intensely competitive market, and I expect Publix to stay out at least until HEB's potential DFW expansion is either commenced or called off, Albertsons' holdings in Texas are stabilized or sold off (which could be potentially bought by Publix), and Brookshire's status as an independent company vs being purchased by a larger entity is determined. There is simply too much in flux right now.

Also, what about the possibility of an HEB-Publix merger, or some type of partnership between the two companies? Although I see it as a longshot, I could see a merger being pursued if continued consolidation in the industry warrants it.
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