Employee Owner Group: Publix Should Go Public

Discussion
Mar 16, 2011
George Anderson

It is widely acknowledged that employee-owned Publix Super
Markets is one of the better run chains in the grocery business. Much of the
credit, management has long maintained, goes to workers who feel as though
they have a real stake in the company.

Now, a group of those same workers is
claiming management has failed to help them realize the full value of their
stakes. The group, Publix Employee Shareholders United, has put forth its own
slate of write-in candidates for the company board and wants the company to
pursue an initial public offering (IPO) to "allow
employees to access the value of their ownership stake."

The group claims
that the value of shares held by employees, roughly 85 percent of total shares,
is limited by the fact that Publix is a private company.

According to a release
put out by Publix Employee Shareholders United, "The
board, primarily comprised of the descendants of George Jenkins who founded
the company in 1930 and who own less than 15 percent of the company’s stock,
has resisted taking actions that would allow shareholders to monetize their
ownership in the company."

A request made to Publix for comment was not
answered at the time this story was published.

[Editor’s Note] Many outside the company also credit employee-ownership
for the success Publix has enjoyed. Eight-six percent of respondents in a RetailWire poll
in September 2010 said employee-owners were "much more" or "somewhat
more" productive than workers at company where they did not have a stake.

Discussion Question: What do you think would be the result for the business if Publix went public?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

20 Comments on "Employee Owner Group: Publix Should Go Public"


Sort by:   newest | oldest | most voted
David Biernbaum
Guest
10 years 2 months ago

My opinion might be counter to what most believe, however, I don’t like to see mass markets retailers go public because once they do, most tend to have a watered down mentality about creativity, SKU assortment, and what offerings they put before the consumer. In addition, publicly held retail chains tend to rely on profitability from the buy more so than on the sell. Manufacturers that supply them know exactly what I mean.

Dr. Stephen Needel
Guest
10 years 2 months ago

Publix could easily become a mediocre chain if it went public, facing the pressures of many of its competitors to take steps that may improve the bottom line, but would likely diminish their reputation for customer service. A reduction in service levels would badly hurt the chain–it would become a me-too rather than having an advantage.

David Livingston
Guest
10 years 2 months ago

I think this would ruin Publix. I’m sure low level employees with hundreds of thousands of stock would love to cash in and spend it. The problem is they would no longer have any skin in the game after they sell their stock. I think these employees would have hopes of being able to sell their stock to the public at a premium. Would it be worth the premium or would it be higher just because of its novelty value? I think this will all blow over. Imagine if too many workers sold off and the company was taken over by outside investors. They might demand cuts in labor, raising of prices, borrowing money to pay big dividends, making stupid acquisitions to benefit their friends, etc. Publix might lose it ability to totally dominate the Florida market. I would hate to see them turn into another Winn-Dixie, the poster child of publicly held grocers.

Paula Rosenblum
Guest
10 years 2 months ago

Oh guys…you really don’t want to push for this. Going public would put Publix under the kinds of pressure that would make it a less desirable place to work.

In fact, I was just glancing at Fortune’s top 100 places to work in the US. So many are private companies (especially the top 10).

My advice? Take the perks and leave it be. Seriously.

Gene Hoffman
Guest
Gene Hoffman
10 years 2 months ago

The invisible essence of involvement that George Jenkins injected into Publix’s psyche, its soul personified, which has been carried forward by employee ownership, is subject to diminishment by public ownership and financial ambition.

Doug Fleener
Guest
10 years 2 months ago

While I understand the desire for the employee-owners to want to realize the full value of their stake, the only thing that’s happening is they sell out the first day it goes public. Then over time it’s no longer employee owned, and slow drift off to a mediocrity pulling the stock value with them.

As Paula said, take the perks and leave it be.

Ben Ball
Guest
10 years 2 months ago
Publix management has perhaps made the mistake of over-emphasizing the importance of “stock ownership” with the employees. If the stock is not publicly traded, that can eventually backfire. Employees begin to feel that the primary value of working for Publix is “to get in on the stock deal”–and they start to think in terms of Walmart millionaires. Publix management MAY (I do not know this for a fact) have either consciously or subconsciously emphasized the value of the stock as a “kicker” for why employees should work (or work harder) at making Publix the great company it is. Maybe they even offered it up as an offset to other compensation increases or perks Publix doesn’t offer. Eventually that leads the employees to say “heck–if the stock is the value then I want the value–now!” A different approach to this is to issue “phantom shares” and to tie compensation and other benefits to the number of shares an employee has accumulated and the “share price” in any given period. That is effectively all Publix employees have… Read more »
David Kyzer
Guest
David Kyzer
10 years 2 months ago

If you look at the most successful companies, they invest in their brand and long-term direction of a company and employees have much input in the company and have a direct tie to the success of the company. In today’s world, management of public companies is driven and too heavily incented to make quarterly numbers and as a result often cut costs to the long-term detriment of their company to make that number. Companies that are employee owned appear be more long-term focused and have a better balance of driving to a quarterly goal and long term investment and development of their company. A public offering could raise some cash that could be used for growth for Publix but I think that it is possible at the expense of long-term stability, direction, and growth.

William White
Guest
William White
10 years 2 months ago

It would be the end of Publix as we know them today. They would have to be focused on different things than they are focused on now, always trying to please the Street. Plus, a number of their employees would be instant millionaires. How would that affect their desire to work hard for Publix (assuming that a number of key people wouldn’t just “retire”)? Overall, a bad move for Publix, but a plus for their privately-held competitors.

Len Lewis
Guest
Len Lewis
10 years 2 months ago
Lovely sentiments and I would tend to agree that going public will have an impact on how Publix does business. But let’s be logical. We have 15% of holders telling the other 85% what’s good for them. And I’m willing to bet that most of that 15% aren’t even in the business. George Jenkins’ legacy was a great chain. But who says it can’t remain that way as a public company if management does the right things and not only the most expedient? I’m sure valuations have been made on Publix stock. What is that value as an employee owned company versus its potential value as a public concern? People need to know. And, based on the facts, should be allowed to make some determination about their future–as long as the risks are clear and they are kept clear of manipulators. Again, Jenkins created and built something special. But so did the framers of the Constitution. We adhere to the spirit of that document not the letter of something written over 200 years ago. The… Read more »
James Tenser
Guest
10 years 2 months ago

I certainly sympathize with the desire of Publix worker-shareholders to engineer a “monetizing event” that would ensure their future security. I also believe an IPO would gain strong initial attention from Wall Street.

Like others commenting here, however, I believe going public would mark the beginning of a permanent cultural change at Publix that might result in the erosion of its dominance. Is Publix a “golden goose”? I’d counsel prudent consideration before slaying it.

Dennis Serbu
Guest
Dennis Serbu
10 years 2 months ago

Publix is a great place to shop, great place to work, and wonderful to do business with as a vendor. The dynamic would change upon going public. A different master and a different paradigm.

It is not the job that pays the best, it is the job that pays the longest.

Ed Rosenbaum
Guest
10 years 2 months ago

Someone earlier wrote “it is not the job that pays the best; it is the job that pays the longest.” There is the entire story boiled in to one sentence. Publix employees leading this upsurge needs to take a hard look at what is happening in the real world today. Those with seniority are set for life at an early age. George Jenkins made this possible. Publix is known for service and friendly atmosphere. The people wearing the green aprons will be there tomorrow and the tomorrows that follow. We can count on knowing the manager for years. The manger at the store we shop in has been there since the location opened over 20 years ago. He was the manager at the store we shopped when we moved to the area. We are now counting close to thirty years with the same person. He knows us. That is important.

Going public will change the environment. No one wants this to happen. Go to work and enjoy your perks, salary and working conditions.

Victor Willis
Guest
Victor Willis
10 years 2 months ago
What is missing here in the comments, and without knowing the full perk benefits of Publix employees, is that a big part of the perks ARE THE SHARES which at present are unrealized assets. In the current economy, still depressed despite what trade rags would say otherwise is that many employees are scraping by on their hourly wages. Imminent food inflation adds fuel to the fire. Most of the consultants here are not struggling nor are they on hourly store rates. If a majority of the Publix union are in agreement to move Publix from private to public ownership, the key questions would be in whose interest, what are the pros and cons and of course when. It’s true that some of the best run and greatest places places to work are still private companies. But part of the allure with employees here is the potential that some day their employer will go public and they will benefit. That’s the case with many many employees of privately owned companies. The downside of course is once… Read more »
Mel Kleiman
Guest
10 years 1 month ago

Short-term win, long-term loss. Many present MAY walk away with more money. Long-term younger employees and workers who are in the game for the long run will lose the culture that has made Publix such a great place to work.

Craig Sundstrom
Guest
10 years 1 month ago

We few Left Coasters on this board probably aren’t overly familiar with Publix, so I’ll take the word of those that see this as a bad idea…or maybe not, but anyway it illustrates one of the problems of “employees-owners”: namely of balancing the (often short term) needs of the former with the (longer term) needs of the latter (or to be more precise, balancing the life-cycle related needs of employees with the concept of a company as perpetual); most of us know how hard it can be to get even three people to decide on where to go to lunch…finding agreement among thousands must be infinitely worse.

Mark Burr
Guest
10 years 1 month ago

What would it mean? It would mean burnt in the Florida sun. End of story.

David Wrigley
Guest
David Wrigley
10 years 1 month ago

The golden rule here is if it is not broke don’t fix it. Publix is one of the finest brands in the country. Their performance as well as the other privately held grocery chains in the USA has consistently outperformed the publicly held chains. In today’s “get rich quick” mentality, it does not surprise me that some employees who do not have the sweat equity as their elders want their payday. They like everyone else in the organization need to pay their dues and reap the rewards over time.

Publix has not changed their core approach since Mr. George and I do not see it happening now or ever.

john nadeau
Guest
john nadeau
10 years 1 month ago
For those that do not know here are some facts related to Publix and its stock. 1. 50% of their stock is owned by individuals that are not employed by Publix. They have either left the company, retired or the stock was given to them by retired and or former employees.2. The current PE for Publix stock is 12.3% however The Fresh Market is at 85.9%, Whole Foods is 37.2%, Costco is 22.15%, BJ’s is 20.7%. Whole Foods seems to be an industry darling however for every $1 in revenue they earn 2.5 cents. Publix earns double that amount on every $1 of revenue. Even Kroger, with twice the number of stores, does not generate the same amount of profit as Publix does (Publix 1.33B vs Kroger 1.11B during the last fiscal year). Kroger has a PE 0f 13.5%. Publix could go public OR align the share value more closely to their peers. This would allow all stock holders to benefit without the company going public and they would continue to retain their culture and… Read more »
Eliott Olson
Guest
Eliott Olson
10 years 1 month ago

Remember Liesel and Matthew Pritzker. Sooner or later there will be law suits. It maybe an heir wanting full value on their portion of the estate so they are not beholden to Uncle or want to start their own business; or perhaps it will be some employees who feel that they are not getting full value when they redeem their shares. There will be suits.

wpDiscuz

Take Our Instant Poll

How much stronger or weaker would Publix be if the company went public?

View Results

Loading ... Loading ...