Photos: Wegmans; Publix
Photos: Wegmans; Publix

Will Wegmans take Publix on in Florida?

As Publix continues expanding up the East Coast, Wegmans maintains its inexorable push south. The popular grocery chains are bound to compete head-to-head in Virginia as they open new stores in markets across the state. North Carolina is also shaping up as a battleground with Wegmans planning to open more stores in the Tar Heel State. As its southern expansion continues, the obvious question is whether Wegmans will make its way into Florida, a market long dominated by employee-owned Publix.

Wegmans is focusing its North Carolina expansion into the Raleigh/Durham market, home to three major universities — Duke, North Carolina State and UNC at Chapel Hill — and thousands of well-paid professionals working in medical research and other fields.

Burt Flickinger, managing director of the Strategic Resource Group, sees “a huge opportunity” for Wegmans as its moves into more southern states. He told the Rochester Democrat & Chronicle, “Wegmans could double the current size of its corporate sales just by filling out the region between Virginia, the Carolinas, into Tennessee and Georgia and north Florida.”

Wegmans’ expansion southward is keeping to a familiar script — slow and steady. The chain has not yet identified locations it plans to build in the Raleigh/Durham area and its big box stores will be spaced out geographically, as in the past.

Publix has been much more aggressive in its move up the coast. The company recently announced the acquisition of 10 Martin’s locations from Ahold in the Richmond, VA market.

A move by the family-owned Wegmans into Florida is probably a ways off, but there are some who think the Sunshine State offers opportunities for grocers who compete directly with Publix.

A Tampa Bay Times report in June covered Albertsons’ decision to rebrand its three remaining stores in Florida under the Safeway banner. At the time, retail analyst Jeff Green told the paper that the rebranding was probably due to Albertsons/Safeway management viewing Publix as having an “unreasonably high market share in Florida.”

BrainTrust

"The high market share of Publix in Florida is not a fluke or due to absence of competition."

Camille P. Schuster, PhD.

President, Global Collaborations, Inc.


"Wegmans will have an uphill battle in Florida, but the competition can only be good for customers."

Cathy Hotka

Principal, Cathy Hotka & Associates


""

Adrian Weidmann

Managing Director, StoreStream Metrics, LLC


Discussion Questions

DISCUSSION QUESTIONS: What do you see as Wegmans’ endgame when it comes to its expansion? Do you imagine Wegmans and Publix will soon be competing in Florida and New York State?

Poll

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Cathy Hotka
Trusted Member
7 years ago

The “unreasonably high market share in Florida” mentioned here is due to outstanding produce and meat departments, a top-notch service deli and friendly customer service, including tip-free delivery of groceries to cars. Wegmans will have an uphill battle in Florida, but the competition can only be good for customers.

Al McClain
Member
7 years ago

In markets where they compete, this will be a “win-win” for consumers, but could be a “lose-lose” for Publix and Wegmans. They are both top notch operators with Publix having the advantage of scale, but Wegmans seemingly ahead in perimeter departments and store design. I’ve been impressed with Publix since living here in Florida, but their prepared foods operation remains less than impressive, and I haven’t seen much change in 8 years, even though our local store has been remodeled recently. And, while their customer service is consistently very good, it is sometimes not great. The question is will both operators get better as they bang heads or will they just erode each other’s margins and revenue?

Camille P. Schuster, PhD.
Member
7 years ago

The high market share of Publix in Florida is not a fluke or due to absence of competition. Consumers value the product quality, assortment and service Publix provides. Competitors will find that consumers have high expectations and will have to offer distinct advantages and areas of distinction while meeting those expectations.

Tony Orlando
Member
7 years ago

I have spent time in Publix during my trips to Florida (and my wife still doesn’t understand why I spend an hour in a supermarket when I’m on vacation, but that is another story). My take is that Publix has the strong loyalty in the south and Wegmans has the strong loyalty up north. Which store is better in my opinion? I think Wegmans has a world-class facility and perishables are simply amazing from produce to bakery. Publix is not quite as impressive, which may sway customers to switch. However Publix employees are top-notch just like Wegmans, and great customer service at both location is about the same. Wegmans wins on layout and perishables and Publix wins on the long-term relationships they have earned over the years in Florida. These two stores are both top-notch and both will make money wherever they go, so good luck on the battle. In a price war, the consumer always wins.

Mohamed Amer
Mohamed Amer
Active Member
7 years ago

This is a bit of a puzzle but now in their fourth generation of ownership, the Wegman family is not typical. Today most family-owned businesses tend to be less focused on growth in the form of geographic expansion and more on incrementally filling in their existing markets and squeezing more out of existing assets. There is a strategic battle brewing here and, in military parlance, Wegmans is perceived to have a soft southern front and Publix is willing and eager to test their resolve.

It’s difficult to imagine the respective margins for Wegmans and Publix not being negatively impacted if they compete directly in a geography. Each of these retailers must have a ready answer to the dilemma of what they’re willing to sacrifice in profitability to achieve geographic growth and gain new market share in their attempt to replicate the cult-like following they enjoy in their core home markets.

Wegmans is a fabulous brand with tremendous stores and experience. In the other corner, Publix has made its reputation on exceptional customer service and high quality. Any head-to-head competition can only be a boon for consumers as they get the best of two worlds. How much bleeding are the combatants willing to take before a retreat is necessary in order to keep the brand’s image intact?

Unless one is prepared to die a slow death, once the core home market is invaded, a counter attack is necessary and unfortunately the serious bleeding begins. During that time, the consumers will enjoy the best of both worlds even if it may be short-lived. What will be interesting to watch is what competitors do during that time in the markets served by both companies.

Ed Rosenbaum
Ed Rosenbaum
Member
7 years ago

And the winner is: the customer. Two great organizations fed by service and quality. Northerners traveling to Florida always say Publix is excellent and want to have one in their neighborhood. The expansion convergence of Publix moving north and Wegmans moving south means more customers become winners with both. I was in a Wegmans outside of Baltimore several years ago and remember being impressed with the cleanliness and quality. I am in Publix weekly and believe their service is untouchable. Both have had strong competitors open in their market base. Both have always come out as the winner.

Patricia Vekich Waldron
Active Member
7 years ago

Wegmans and Publix are both great operators. Shoppers in Florida are accustomed to top-notch stores, services and products — which both companies are market leaders in delivering.

Ryan Mathews
Trusted Member
7 years ago

As George said, it will be slow and steady. Where will it stop? Hopefully at a logical endpoint whether that’s the Carolinas or Key West.

How many chains have we seen fail over time as a result of aggressive over-expansion? Gobbling up locations for the sake of gobbling up locations or staging “strategic” land grabs rarely proves out in the long run.

Retailing is about understanding how one set of customers differs from another and then finding ways to more effectively satisfy their needs than the competition, not about how fast you can sign leases.

Will Wegmans and Publix meet in New York or Florida? Maybe so. But if and when they do I hope it is because they have both thought their endgame strategies out, not let their egos dictate the arc of growth.

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

Tend to agree with the article relative to the projection and speed of Wegmans’ move south, especially into Florida. Having said that, I believe Wegmans would make for a formidable competitor to Publix in the Sunshine State. Except for some small amount of slippage to Whole Foods, Publix owns the middle and upper ends of the market. Wegmans will be a viable alternative to Publix. In addition, Wegmans would benefit from the snowbird effect in a manner similar to that enjoyed by Wawa where it has used the impact of customers who it served in the mid-Atlantic states to successfully take on the Florida CStore leader, namely, RaceTrac.

Craig Sundstrom
Craig Sundstrom
Noble Member
7 years ago

Let’s ask the opposite question: why would Wegmans want to expand to an area (Florida) that is (1) remote from their existing operations, and (2) has an entrenched and very capable competitor, when there are populous and wealthy areas nearby (Ohio)? True, this is Kroger’s backyard, and perhaps that is enough to chill the idea, but it still seems less problematic to me than a beachhead in the Sunshine State.

David Livingston
7 years ago

I know some people pretty well who would know. The answer is not in the next 5 years. Maybe in 20.

Tom Dougherty
Tom Dougherty
Member
7 years ago

There is no doubt about it. The chains will end up competing in other Southern States (like Virginia) and I have little doubt that Wegmans will win the banner of over-all winner. They dominate every market in which they expand even if they are outnumbered in locations.

You wont find Wegmans buying existing chains in the manner of Publix because existing brick-and-mortar does not allow the Wegmans footprint. Their physical plant is as different as their brand. In Virginia, Harris Teeter needs to fear Publix but Publix needs to fear Wegmans.

When Wegmans moves into Florida the markets will respond in the same way they have everywhere they have set up roots. The closest retail model I can think of that represents what Wegmans means to grocery is what IKEA represents to furniture and kitchen gadgets. They quickly become a destination. Customers and prospects will travel hours to shop at IKEA — so unique and appealing is the experience. The same emotional value is infused into Wegmans. A three-hour trek is a bit much to ask for perishable goods but 30 to 45 minutes is certainly within Wegmans’ grasp.

For those with competitive location choices in Florida, Wegmans will quickly become the favorite choice of shoppers. For the rest it will certainly, at the least, become an occasional and special shopping stop. Publix may be employee-owned but the Wegmans brand belongs to the customers who quickly grow to love it.

Christopher P. Ramey
Member
7 years ago

Publix’s unreasonably high market share is due to their aggressive approach to real estate. The stores are very close to each other. It has nothing to do with their ability to serve customers or any department superiority.

andrea moss
andrea moss
6 years ago

Loved Wegmans in Virginia and wish Wegmans would open in The Villages, near Pine Hill, Fruitland Park. I just moved here and none of the grocery stores compare to Wegmans. I miss having Wegmans nearby and a lot of new people in community wish they would open shop here as well.