Publix Goes Slow and Steady with Pix Concept
By George Anderson
The Publix way is slow and steady. Test concepts carefully and, if they work, continue rolling them out. If they do not, as with the PublixDirect home shopping service, cut your losses and move on to some other idea that builds profits.
With the announcement that Publix plans to open its seventh Pix convenience store in Seminole, Fla., the regional powerhouse would appear to have hit on a concept that bears further development.
According to company spokesperson Shannon Patten, Publix is currently looking at other sites to open Pix stores but has yet to finalize whether it will build the combination gas/convenience outlet in other locations.
Publix has six Pix stores in Florida and another in Tennessee.
Moderator’s Comment: What lessons are there for other retailers in Publix’ approach to new business ventures? Where do you see the company going with
the Pix convenience concept? – George Anderson – Moderator
Some may feel this is just a microcosm of Ahold’s ill-fated strategy to be “a presence everywhere consumer’s buy food” — and they may be right. But I’m betting on Publix to pull this off. If consumers are going to “blur channels” and they clearly are, then retailers who want to maintain/grow market share are going to have to learn how to establish a presence in new channels as well. Wal-Mart is the master.
With Tesco and Family Mart testing convenience store concepts on the West coast, Seven-Eleven testing concepts across the country, and Publix testing concepts on the East coast, the future should hold exciting new developments in this area. Each company is moving forward with new ideas and concepts. This is a very exciting time. Publix has the opportunity to test and expand in an area that does not have the focus of major competitors.
Every retailer should always be testing new concepts. Even a single-location owner can test new items and new categories and new ad media. A multi-location owner can test new concepts by dedicating certain test locations. Many retailers act as if they believe a “test” is merely a formality on the way to a rollout. Their egos get tied up in a premature commitment or they dedicate too little time and sustained effort so the test is predetermined to fail.
As far as Publix is concerned, their challenge is to break tradition: supermarket chains generally don’t run successful convenience stores and convenience stores generally don’t run supermarkets. I cannot understand how Publix can rise above a major handicap in convenience store operation, namely, that many competitors are family run businesses that pay minimal wages and no benefits, who minimize their tax burden due to the cash nature of many transactions.
Publix has an advantage of being somewhat privately held in that they can test new concepts and roll out new formats after they have been fine tuned. Public companies must make grandiose promises to Wall Street, such as opening hundreds of new stores or doubling its business by a certain time frame.
There seems to be few superstars in the convenience store sector. Wawa seems like the only one I can think of, but I haven’t had my coffee yet. If Publix does C-stores half as good as they do supermarkets, they should do very well.
Change is good! Publix and others need to realize that they are in the people business. Whether this includes gas or convenience stores, it will be their approach to the consumer which eventually wins. Tie this together with the tremendous profits which the C-store channel offers, and you have the capability to drive revenues and profits while testing out many concepts around different stores. This is only good for Publix from both a learning and possible alternative channel perspective.