Should one rough quarter have Publix’s management concerned?
Publix saw its same-store sales decline 0.4 percent in the first quarter of 2017. That was the first time the grocer has experienced a drop in that metric going back to 2009 when it was dealing with lingering effects of the Great Recession.
The chain attributed the small drop in its comp numbers to the Easter holiday falling in the second quarter this year and not the first quarter, as in 2016. Publix estimated its same-store number would have been up just under one percent if Easter remained in the first quarter.
While the Easter holiday provides an explanation for its un-Publix-like quarter, the chain has faced increased competition in its home market of Florida even as it expands up the East Coast into Virginia, with plans to perhaps extend further north. Well-regarded Wegmans is expanding from its New York state base southward down the East Coast at the same time.
The Orlando Sentinel reports Publix has lost share to Aldi and Walmart in the area between Orlando and Tampa. The chain is facing tough competition from not only those chains but also from Earth Fare, Lucky’s Market, Sprouts Farmers Market, The Fresh Market, Trader Joe’s, Whole Foods and others.
As a positive, The Charlotte Observer reports that Publix has gained market share since entering the local market in 2014. The chain is fourth behind Harris Teeter, Walmart and Food Lion in Charlotte.
Publix, which is known for great service, BOGO deals and delicious sub sandwiches made in its delis, has been taking steps to deepen its connections with customers, including partnering with Instacart in Miami and Tampa Bay to offer online shopping and home delivery.
The chain is also very active on Facebook, Instagram, Pinterest and Twitter as it seeks out customers on social media. Last summer, the grocer launched The Publix Checkout, a company blog written by employees about a wide range of topics, such as community initiatives, holiday entertaining, health and wellness and recipes. Publix is also running a pilot program to test opening Starbucks shops inside its stores.
Publix, currently operates 1,144 stores in Florida, Georgia, Alabama, Tennessee, South Carolina and North Carolina. The company generated $34 billion in sales in 2016.
- Publix Reports First Quarter 2017 Results and Stock Price – Publix/Business Wire
- Publix rings up rough first quarter – Orlando Sentinel
- Charlotte’s grocery wars: Who’s up, who’s down – The Charlotte Observer
- Will Wegmans take on Publix in Florida? – RetailWire
- Will growing competition in Florida slow Publix as it heads north? – RetailWire
DISCUSSION QUESTIONS: Do you think the first decline in same-store sales since 2009 and increased competition in Florida has Publix management concerned? Has the chain’s expansion in recent years affected Publix’s ability to recreate its culture in stores far removed from its base in Florida?