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Publix buys its way into the Richmond market

Publix is not generally known for acquiring properties from other grocers and moving into a new market. In the case of the Richmond, VA, the employee-owned business is going a little off script and purchasing 10 Martin’s Food Markets from Ahold, which is selling off stores in the area as it pursues its merger with Delhaize.

In February, the Richmond Times-Dispatch reported Publix had signed a lease for a 49,000-square-foot store in Henrico County scheduled to open in 2018. With the stores acquired from Ahold, the paper reports that Publix intends to close the locations “on a rolling basis,” remodel them, hire employees and reopen.

“Acquiring these 10 locations aligns with Publix’s aggressive growth plan for the commonwealth of Virginia,” said Todd Jones, CEO and president of Publix, in a statement. “We are looking forward to providing Virginians with the high-quality service and products our customers have come to expect and have earned us recognition throughout the industry.”

BrainTrust

"The farther north it travels, the more the competition heats up, particularly in the form of Wegmans, Whole Foods and Giant."

Richard J. George, Ph.D.

Professor of Food Marketing, Haub School of Business, Saint Joseph's University


"I think Publix will do well in the Richmond market. They just need to keep doing what has worked for them before. "

Zel Bianco

President, founder and CEO Interactive Edge


"I give Publix credit for NOT being so precious about its culture that it shuts off scale-building opportunities."

Carol Spieckerman

President, Spieckerman Retail


Discussion Questions

DISCUSSION QUESTIONS: Are you at all concerned that the culture that made Publix great in Florida will not translate as it moves into markets farther away from its corporate home? How can management make sure that Publix stays Publix?

Poll

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Dr. Stephen Needel
Active Member
7 years ago

Publix bought a number of locations when they moved into Atlanta — a mix of closed Winn-Dixies and some Kroger stores that had gotten too close to each other. Being a shopper both here and down in Florida, I find the Atlanta stores generally have better service than the Florida stores. So no, I don’t think there’s a problem in their expansion away from Florida per se — they just have to take their time and make sure they do it right (according to their approach) as they go along.

Richard J. George, Ph.D.
Active Member
7 years ago

Publix did not become recognized as one of the country’s best supermarkets without reason. It has successfully moved north, giving Harris Teeter some very strong competition. The farther north it travels the more the competition heats up, particularly in the form of Wegmans (America’s other top supermarket), Whole Foods and Giant. However I see no problem, only opportunity, as Todd Jones leads the march into Yankee territory.

Carol Spieckerman
Active Member
7 years ago

I give Publix credit for NOT being so precious about its culture that it shuts off scale-building opportunities. One of the first things I often hear from Floridians that have relocated to other states, and from people who have visited Florida then returned home, is “I wish we had a Publix here.” That alone speaks to the built-in demand, power of the brand and probability of success in new markets.

Tom Dougherty
Tom Dougherty
Member
7 years ago

I have no concerns at all about a loss of Publix culture because of an expansion into Richmond. If the culture is about core beliefs, then it will translate into the new stores with aplomb. But if the culture is a marketing fabrication (I don’t believe employee-owned translates into much reality) then it is at risk.

What makes Wegmans great? It is a far cry from employee-owned (ask Danny). Culture resides in the DNA of the company’s mission. Who owns it is not NEARLY as important as what management believes to be important in terms of mission.

I’m hard-pressed to see Publix employees as any more customer service-minded than Wegmans. This is just more social mythology. Emphasizing the unimportant as being different and better.

Ed Rosenbaum
Ed Rosenbaum
Member
7 years ago

Let’s give Publix credit where it is due. They are an outstanding deliverer of customer service. Yes, the pricing may be high in some areas. But overall they are as good as it gets in this man’s opinion.
Let’s also give them credit for planning their northern expansion wisely. How can we question their decision making when it comes to buying existing companies vs. starting from zero? I don’t think we can because their success in the expansion mode has been strong. Yes, the competition gets stronger the further north they travel. But I doubt if competition will scare them away. I am glad I can say I have a Publix in my neighborhood. In fact, there are several.

Ross Ely
Ross Ely
7 years ago

Publix has built a great model in Florida based on strong execution on assortment, service and pricing. Their model should translate very well into other markets insofar as they maintain the discipline in these key areas. It will be interesting to see how they build out their distribution model in order to provide a local source of supply for the new stores.

Zel Bianco
Zel Bianco
Active Member
7 years ago

I think Publix will do well in the Richmond market. They just need to keep doing what has worked for them before. Publix has become successful because they put their customers first, they train their employee’s well and they have excellent private labels. In addition, they use technology to enhance their customers’ shopping experience. For instance, they use staffing software which helps their customers move through the checkout line quicker. If they keep following the successful model they created, further expansions should go well.

Craig Sundstrom
Craig Sundstrom
Noble Member
7 years ago

“Agressive growth plan” often translates into “ill advised (over) expansion,” but not always, and I see no reason to assume the worst. A bigger concern in acquiring existing locations is that they’re not the best — did Martin’s keep the good ones? — but again, I have faith in Publix’s ability. I wish everyone well.

Bill Hanifin
7 years ago

Rather than just port its Florida-bred culture to Virginia, Publix should take this opportunity to fill in some gaps that exist in its home-state model.

Publix stores do not offer a gathering place for shoppers, i.e. a cafe for coffee and snacks, nor does it offer a fresh food outlet for lunch and early dinner. Wegmans and others do very well by filling this need and Publix will be well served to expand its model in this new market. In doing so, maybe it can fix the increasingly long wait times at the Deli. The irony in Florida is that Publix subs are fantastic, but the wait times make lunch for workers on the go untenable.

Verlin Youd
Member
7 years ago

Publix seems to be successful so far as they move up the east coast. Will it be more difficult, maybe not. Publix has spend the last couple of years building a substantial presence in North Carolina where they had good credible competition from a couple of local, well respected players — namely Harris Teeter (now part of Kroger) and Lowe’s Foods. Timing worked for them as some Harris Teeter customers may see some changes as a result of the Kroger purchase, but Harris Teeter hasn’t sat on their laurels.

Publix seems to have done OK in matching up against the locals, although in all honesty I still prefer “My” Harris Teeter for its combination of selection, store layout, and front end service — they take the items out of my cart saving me the hassle and I NEVER have more than one person in line ahead of me.

With the possible exception of Wegmans, I don’t think that Publix is going to find the competition north of the Carolinas any tougher. In fact, there are some chains in the north that will find their business negatively impacted immediately when Publix moves in — that is if Publix is able to maintain its value proposition at scale.