Publix Pix C-Store Concept For Growth
Publix maintains it is still in testing mode with its Pix
convenience/gas store concept even after recently opening its thirteenth
store.
Company spokesperson Shannon Patten
told Central Florida News 13, “We’re
still trying out new concepts, different sizes, different product mixes
to try to figure out what’s the best bet for us.”
Supermarket industry veteran Burt Flickinger III doesn’t quibble
that Publix may be tweaking what it is doing with Pix but he has no doubt
the employee-owned chain is looking for Pix to be a growth engine for the
company going forward.
Mr. Flickinger predicted that Publix would add 150 Pix stores
over the next five years, giving cause for concern to its competition.
“It’s going to be a very daunting challenge to try to stay
alive as Publix gets better with their Pix stores,” he told Central
Florida News 13.
Discussion Questions:
Where do you see Pix fitting into the Publix’ go-to-market strategy?
Do you see convenience stores as a bigger growth vehicle for the
chain than its other alternative concepts, Publix Sabor and GreenWise
Market?
I agree with Burt, Publix will move strongly into the convenience store business. There are only a limited number of areas that a Hispanic format or organic format will work. But you can do a convenience store just about anywhere. Giant Eagle has been successful with their c-store format and have done well with tying in their fuel perks promotions into their supermarkets. Publix is a smart company. They know when to quit when they have a dud, and they certainly are not quitting here.
I agree that Publix is a smart company but so were the major oil companies. But they didn’t make the c-store model work for them and they were already in that gasoline business.
Convenience retailing is different as provided by the number of supermarkets that have entered and then withdrawn form the channel. Kroger’s has demonstrated that it is possible to have a sizable c-store operation but initially operated each of its c-store companies as independent entities allowing them to gain additional expertise. Only fairly recently have then begun to centralized some of the supporting functionality.
Many failed because they saw the c-store out on their lot as just another checkout lane. They didn’t develop a true marketing plan for their c-store. For example, many didn’t adapt their product mix to reflect the needs and wants of the c-store customer.
While I doubt that Pix will ever be the number one c-store in Publix’s markets will depend on a number of factors not the least of which is how it is seen internally. As a test, it is hard to get the best and brightest to want to join something that is not seen as strategic.
There is a direct analogy to the success European supermarket companies like Tesco and Albert Heijn have had with c-store formats that are larger and better merchandised than traditional c-stores. I see Publix making it to number four in the Southeast c-store market after 7-Eleven, Circle-K and Racetrac. The stores are very well laid out, according to a friend who recently visited a Pix location in central Florida, have good lighting and great products. I’ll be able to confirm this next month when I’m down there.
I’ve never visited a Pix C store but knowing how well Publix executes at the big store, I would say that this is another market they could do well in. Expanding fresh lines would differentiate themselves from the usual fare at C-Stores. There is a need and demand for this type of high-velocity retailing.
PUBLIX is a superb company. And, Burt’s thinking that they will effectively expand the Pix concept is on the money. The Pix will do more for PUBLIX than the organic only model, as the Consumer base for C-Stores is much larger.
Commercial Real Estate knowledge will be a key factor in the success on this one. PUBLIX, with their ESOP ownership, moves a bit more slowly than some competitors, so it might take a longer period of time to get to 150 Pix stores. And, the C-Store field has some talented players in it–they are not going to merely roll over and let marketshare erode. Becoming #1 or #2 in a market will take some time on this strategy.
Whatever the number, PUBLIX will execute very well. And, they’ll be a successful player.
A few retailers do things well. Publix is one of them. It is not a company to bet against.
David Livingston is correct. This is a growth opportunity for Publix. Not only are the Hispanic and organic formats limited, they also are businesses that are not totally incremental to Publix.
Operationally, Publix is second only to Wal-Mart. That skill lends itself to opening a C-store chain. How many Publix trucks will pass a PIX location? How many items will be common to both operations?
Grocery shopping will continue to change. As more grocery purchasing moves online, there will be less major shopping trips to the supermarket. C-stores will become a bigger fill-in “Convenience” for shoppers. This is a good move for Publix and while they are not likely to become a national leader, they have the business acumen to be a leader in their marketing geography.
Great move! Following the likes of Walmart, Tesco and entering the Grocerant niche with ready-to-heat and ready-to-eat prepared meals help drive sales and customers to the new format!
Agree that this is a strong move for Publix–they can bring the product freshness and the right limited assortment selection. Cutting down in-store time for the quick “pick up” stops is a good move forward. Convenience is important to many shoppers, but they expect quality and value, Publix well positioned to deliver in the Southeast.
It’s a good move for Publix. They are champions at execution, study, and continuous improvement. There’s a great chance for them to become the leader in this area as well.
However, with 1,000 plus supermarkets, they may need to ‘step on the gas’ before they are left in the exhaust of their competitors and potential competitors. With thirteen locations at this stage of the game, they should be considered behind and at risk of becoming an also-ran. That being the case, no matter how much they study their concept and execute well, they might not be able to catch up.
The upside for them is that more and more they are dominating their market, which does give them an advantage. If they are planning on 150 locations in 5 years, that is likely over a $250-300 million investment, dependent upon size and number of fuel dispensers. That type of investment could impact other initiatives that are also important to their continued success.
Publix is smart to test multiple strategies to see what works best for the chain, and what will have the greatest impact to the bottom line. The Pix C-store concept, while important to be profitable, can also be a great marketing tool for the larger Publix chain. When consumers simply need milk, eggs, condiments, soft drinks, and don’t want to wait in the traditionally long lines of a supermarket retailer, a C-store is a great alternative. Knowing this, why not keep it in the same corporate family, and that is what Publix is testing.
But they can also use the C-store to test new and alternative services, and products, without having to commit to major resets in the parent chain. If things go according to plan, I would not be surprised if we see 500 Pix stores throughout Florida within the next 5 years.
What is there not to like here? There are c-stores everywhere for a reason–they work! The key here is to get these stores put in place and then start to tweak them. The basics are available for anyone to see (and copy) from all of the larger C-store chains. Sell gas, cigarettes, basic sundries, and offer a competitive price and your location will make you successful. Bring the public in with great gas prices and everything else will follow.
There remains an opportunity to consolidate a fragmented convenience store market in Florida and other southeastern states and Publix could take advantage to become a leader in this segment.
Non-fuel related c-store competitors remain scattered and inconsistent in their delivery of good, clean stores. I would bet that Publix could become the dominant non-fuel related c-store chain and then do battle with newer layouts from the likes of BP.
I would urge Publix to moderate the pricing schemes in these stores. As they will have a full size supermarket reasonably near most every c-store location, they will be at risk of price comparison and could send customers back to their supermarkets if the value demonstrated in the c-store layout is not eminently clear to the consumer.