Publix in Mississippi

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Publix in Mississippi

Post by Knight »

From the thread "Rouse's market area":
pseudo3d wrote:
Knight wrote:Rouse's found competition expanding eastward. It has met Publix in Mobile and Baldwin counties in Alabama.

Publix should be in position to expand westward into Mississippi. Louisiana is doable after Publix develops a presence in Mississippi.
I don't know about that. Publix's lack of an entry into MS probably is more from an interest standpoint than to a distribution standpoint. Yes, they don't have a big DC that can supply MS effectively, I've heard that, but they've shown far more interest in expanding north than west. Publix opened stores in Georgia and SC (1991 and 1993 respectively) before even opening their first Alabama store (in 1996) and have since gone to NC, TN, and VA since then without a single store in MS. If they were that interested, they would've taken some opportunity to do so, and at this rate I genuinely think that Publix will compete with Meijer before it really enters LA proper. Publix's growth patterns more and more resemble "East Coast" than "Southeast" as SEG/Winn-Dixie does/used to do.
Lakeland, Florida-based supermarket Publix opened its McCalla, Alabama, distribution center in February 2017. The distribution center currently has a high velocity warehouse supporting stores in Alabama, Tennessee, western Georgia, and western Florida. It is within five hours of a metropolitan area where Publix does not have a presence yet: Memphis, Tennessee.

The completion of Interstate 269 (Mississippi and Tennessee) in 2018 and Interstate 22 allows distribution to Memphis, Tennessee, to be reality. It also creates an opportunity for Publix to enter a new state to open additional stores: Mississippi.

Where in Mississippi could Publix open stores? Biloxi, Gulfport, Hattiesburg, Hernando, Jackson, Oxford, Pearl, and Tupelo could be doable markets.

Which division would Mississippi be in? Alabama is in the Atlanta and Jacksonville divisions. Tennessee is in the Atlanta Division. (Northeast Tennessee stores may be in the Charlotte Division. I will need clarification on this.)
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Re: Publix in Mississippi

Post by wnetmacman »

Knight wrote:Where in Mississippi could Publix open stores? Biloxi, Gulfport, Hattiesburg, Hernando, Jackson, Oxford, Pearl, and Tupelo could be doable markets.
Publix has always done a careful approach to every state they've entered. I would suspect they would probably start with the Memphis area first, though they do have stores just across the line in Mobile from the Gulfport-Biloxi area, so that area would also be a target. They could use that for a route into New Orleans also. If WD departs Louisiana, New Orleans would be ripe for some competition outside the home-owned stores. Walmart can't even get a good foothold in there, because of all the independent stores that cater to the population.
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Re: Publix in Mississippi

Post by pseudo3d »

I wrote this earlier but never posted it until now.

I doubt it will happen at all, save for very northern MS near Tennessee. If you look at the way Publix has grown, they've either gone for an acquisition strategy of buying several stores in a market to make a definitive entry (Albertsons in Nashville, Martin's in Richmond, BI-LO in Charlotte) or a new-build affluent market that can support it (Knoxville). Publix isn't just building out of obligation to expand--that's what gets companies into trouble.

The only new market that I can see Publix going into in that area would be Memphis, which is dominated by Kroger and needs a competitor, which it had (Seessel's) before Bruno's, Albertsons, and successor company Schnucks ran it into the ground (and helped Kroger get even bigger).
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Re: Publix in Mississippi

Post by Knight »

wnetmacman wrote: Publix has always done a careful approach to every state they've entered. I would suspect they would probably start with the Memphis area first, though they do have stores just across the line in Mobile from the Gulfport-Biloxi area, so that area would also be a target. They could use that for a route into New Orleans also. If WD departs Louisiana, New Orleans would be ripe for some competition outside the home-owned stores. Walmart can't even get a good foothold in there, because of all the independent stores that cater to the population.
I guess Tupelo and Hernando, based on Memphis. Tennessee; Gulfport and Biloxi, based on Publix's presence in Mobile County, Alabama; and Jackson, being west of the McCalla, Alabama, distribution center, would be logical starting markets in Mississippi.
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Re: Publix in Mississippi

Post by Knight »

pseudo3d wrote:I wrote this earlier but never posted it until now.

I doubt it will happen at all, save for very northern MS near Tennessee. If you look at the way Publix has grown, they've either gone for an acquisition strategy of buying several stores in a market to make a definitive entry (Albertsons in Nashville, Martin's in Richmond, BI-LO in Charlotte) or a new-build affluent market that can support it (Knoxville). Publix isn't just building out of obligation to expand--that's what gets companies into trouble.

The only new market that I can see Publix going into in that area would be Memphis, which is dominated by Kroger and needs a competitor, which it had (Seessel's) before Bruno's, Albertsons, and successor company Schnucks ran it into the ground (and helped Kroger get even bigger).
Publix entered Tennessee by acquiring Albertson's Nashville-area stores; entered North Carolina by opening its own stores, then re-opening acquired BI-LO stores as Publix; and is entering Virginia by opening its own store, then re-opening Martin's stores as Publix.

There are not any supermarket chains in Mississippi for Publix to acquire quality stores. Instead of having the expenses to buy quality stores and convert them to Publix, Publix can open a quantity of its own stores for less.
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Re: Publix in Mississippi

Post by pseudo3d »

Knight wrote:
pseudo3d wrote:I wrote this earlier but never posted it until now.

I doubt it will happen at all, save for very northern MS near Tennessee. If you look at the way Publix has grown, they've either gone for an acquisition strategy of buying several stores in a market to make a definitive entry (Albertsons in Nashville, Martin's in Richmond, BI-LO in Charlotte) or a new-build affluent market that can support it (Knoxville). Publix isn't just building out of obligation to expand--that's what gets companies into trouble.

The only new market that I can see Publix going into in that area would be Memphis, which is dominated by Kroger and needs a competitor, which it had (Seessel's) before Bruno's, Albertsons, and successor company Schnucks ran it into the ground (and helped Kroger get even bigger).
Publix entered Tennessee by acquiring Albertson's Nashville-area stores; entered North Carolina by opening its own stores, then re-opening acquired BI-LO stores as Publix; and is entering Virginia by opening its own store, then re-opening Martin's stores as Publix.

There are not any supermarket chains in Mississippi for Publix to acquire quality stores. Instead of having the expenses to buy quality stores and convert them to Publix, Publix can open a quantity of its own stores for less.
The Albertsons and BI-LO acquisitions were from companies that were in a financial position to get rid of stores in secondary markets at a bargain and already came with land and a building. Building new stores in markets just to have new stores in markets is going to get Publix in trouble, because that's what Albertsons did in some of those same markets. The Albertsons strategy in the 1990s was just that...enter new market and build really anywhere near a major thoroughfare. The result was disastrous. Even not counting ASC, they were plagued with bad locations, locations that would never open as grocery stores again. Mississippi was no different, Albertsons tried several cities with large stores, some with highway frontage. Specifically, they opened two stores in Jackson, one in Gulfport, one in Hattiesburg, one in Ridgeland, and one in Brandon, across two divisions (Dallas and Houston). A few other stores were opened that still survive as Kroger stores, but the Jackson/Gulfport/Hattiesburg stores do not even operate as supermarkets today.

It should serve as a warning to Publix, which risks the same threat--a slightly pricier store in a market that's already somewhat filled out and doesn't really need a new one. They probably know this, which is why for the last decade or two they have crawled north instead of west. Due to the greater Memphis market, it is probably likely they will have one Publix but having them invade the state is a pipe dream.
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Re: Publix in Mississippi

Post by Knight »

Albertson's was focused on opening larger stores.

Publix can open a quantity of smaller quality stores, think the 28m (28.000 square feet) and 39m (39,000 square feet) prototype stores, and be more successful than Albertson's and Winn-Dixie combined. It is likely aware of Mississippi and is likely planning how to enter it successfully.
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Re: Publix in Mississippi

Post by pseudo3d »

Knight wrote:Albertson's was focused on opening larger stores.

Publix can open a quantity of smaller quality stores, think the 28m (28.000 square feet) and 39m (39,000 square feet) prototype stores, and be more successful than Albertson's and Winn-Dixie combined. It is likely aware of Mississippi and is likely planning how to enter it successfully.
The larger store sizes of Albertsons compounded the problem but that wasn't the main problem, especially considering the size was relatively comparable to other competitors (they were usually 50k-60k square feet), and square footage isn't an issue unless land is at a premium. The thing that drives up costs is full service departments, which aren't going to be removed for a market entry--at that rate, why would anyone go to Publix? If Mississippi is such a great market, then they would've entered it years ago. They entered Alabama in 1996, and since then they've entered Tennessee in 2002 and North Carolina in 2014, already having gotten SC and GA before. A "successful" MS entry means placing a few south of the Memphis area, but not Gulfport, Hattiesburg, and Jackson.
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Re: Publix in Mississippi

Post by wnetmacman »

pseudo3d wrote:A "successful" MS entry means placing a few south of the Memphis area, but not Gulfport, Hattiesburg, and Jackson.
What is your basis for this assumption? *IF* they distribute from McCalla, then yes, Memphis and that area would be a good fit. If they distribute from Jacksonville, then the MS Gulf Coast (Biloxi/Gulfport) would be a more likely candidate, especially since WD is fading fast there. They may even be able to take a few of those over as they fail, similar to what Rouses has done.

Anywhere they open and make a profit is a successful entry. They could pop a store in Hattiesburg and take from that huge college town there. Don't count them out because there appears a bigger opportunity. Publix has really only hit Kroger in a few places, and Memphis is the headquarters for the Delta division. I wouldn't go against that for all the tea in China at this point, because Kroger pretty much owns groceries in Memphis. Even Rouses has already closed one of the stores they bought, in Long Beach. That may be scaring companies wanting an inroad.
pseudo3d wrote:The larger store sizes of Albertsons compounded the problem but that wasn't the main problem, especially considering the size was relatively comparable to other competitors (they were usually 50k-60k square feet), and square footage isn't an issue unless land is at a premium.
Albertsons failed in TN because they bought Seesels, which was already underperforming Kroger in Memphis, and it just never worked for them. It wasn't store size or anything else. They couldn't turn Seesels into Albertsons and make it work. Memphis wanted Seesels. I would compare this to Rite Aid and K&B in New Orleans. Try as hard as they might, Rite Aid just wasn't ever going to be K&B. In MS and AL, they just couldn't compete, and that was near their breakup. The lone southern MS store in Gulfport they got opened is a Belk now. That should clue you in to its sheer size.

If Publix wants Mississippi, now is the time, because WD is retreating, and Kroger only covers half of the state. It's ripe for someone new.
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Re: Publix in Mississippi

Post by pseudo3d »

wnetmacman wrote:
pseudo3d wrote:A "successful" MS entry means placing a few south of the Memphis area, but not Gulfport, Hattiesburg, and Jackson.
What is your basis for this assumption? *IF* they distribute from McCalla, then yes, Memphis and that area would be a good fit. If they distribute from Jacksonville, then the MS Gulf Coast (Biloxi/Gulfport) would be a more likely candidate, especially since WD is fading fast there. They may even be able to take a few of those over as they fail, similar to what Rouses has done.

Anywhere they open and make a profit is a successful entry. They could pop a store in Hattiesburg and take from that huge college town there. Don't count them out because there appears a bigger opportunity. Publix has really only hit Kroger in a few places, and Memphis is the headquarters for the Delta division. I wouldn't go against that for all the tea in China at this point, because Kroger pretty much owns groceries in Memphis. Even Rouses has already closed one of the stores they bought, in Long Beach. That may be scaring companies wanting an inroad.
My question is, "Why hasn't Publix already tried?" and I would guess that the less-affluent population of Mississippi or the way stores have to be run has kept them out and caused them to trend north, not east. Competition would be nice, of course, but if that was true, why has Winn-Dixie performed so badly there, even historically, that they wanted to take Jitney Jungle to prop them up, and that failed? Even three years after bankruptcy (2008), Winn-Dixie had just 15 stores in Mississippi (link).
pseudo3d wrote:The larger store sizes of Albertsons compounded the problem but that wasn't the main problem, especially considering the size was relatively comparable to other competitors (they were usually 50k-60k square feet), and square footage isn't an issue unless land is at a premium.
Albertsons failed in TN because they bought Seesels, which was already underperforming Kroger in Memphis, and it just never worked for them. It wasn't store size or anything else. They couldn't turn Seesels into Albertsons and make it work. Memphis wanted Seesels. I would compare this to Rite Aid and K&B in New Orleans. Try as hard as they might, Rite Aid just wasn't ever going to be K&B. In MS and AL, they just couldn't compete, and that was near their breakup. The lone southern MS store in Gulfport they got opened is a Belk now. That should clue you in to its sheer size.

If Publix wants Mississippi, now is the time, because WD is retreating, and Kroger only covers half of the state. It's ripe for someone new.[/quote]

I'm not talking about Seessel's, I'm talking about the general way Albertsons stores were built up until around 2002. Albertsons believed that their stores were the best and could be a success anywhere, to the point where they were making bad business decisions, like building on areas with no established traffic counts, wrong demographics, stores that were difficult to access, and so forth. It was the same decisions that led Albertsons to rebrand Lucky. Seessel's was a victim of that, trying to mold a store into something it wasn't. The Mid-South Division, which Smitty's was a part of it was almost wholly composed of that, including Smitty's (MO, spun off from Smitty's-AZ...they had gotten rid of some of the GM, but still had full-service restaurants, which Albertsons surprisingly kept) and Nashville (Bruno's conversions). Some of the MS stores didn't become groceries again because they were too big...they were in the wrong place (a few, including non-Seessel's stores, still operate as Kroger stores). Yeah, one of the MS stores DID become a Belk, but at the time Belk was experimenting with small stores (~50k square feet). Generally, 50k square feet for the late 1990s/early 2000s is not a particularly large grocery store in the South (maybe not Florida). H-E-B opens 50k square feet stores in small towns (like Gonzales). To borrow a well-known phrase, "size doesn't matter" and if Publix goes into the wrong markets in Mississippi (granted, they have better location-picking skills than Albertsons did but whatever) then it doesn't matter if they open small stores vs. big ones.

From what I've heard, Rite Aid ran K&B into the ground, and some of which I've heard from you, but there were other problems. They got rid of the popular K&B ice cream and other products, and even rearranged stores completely differently...my aunt used to live in Louisiana in the 1990s, and she mentioned how she was unhappy at how after the conversions, Rite Aid put lighters and batteries near the floor at a child's reach.
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