Does Publix have an unrealistic share of Florida’s grocery market?
When it was reported in January that the last three Albertsons in Florida were being converted to Safeway stores, the question many asked was, “Why bother?” Sure, the old stores would probably see some improvement in business simply because they had been run down. A new banner and remodel would likely attract a few more locals, but Publix owns the market.
The answer, at least part of it, to the question may have been provided by retail analyst Jeff Green in an interview with the Tampa Bay Times. He considers Publix and its “unreasonably high market share in Florida” a potential market opportunity for Safeway. He also thinks that the new Safeway stores and their home delivery service are likely to be more directly competitive with Publix than Winn-Dixie.
So what does a $10 million remodel buy aside from a change in banner above the store?
According to reports, the new stores are more upscale than the Albertsons they replace.
The Tampa Bay Times report points out the large produce department with a “surprisingly large organic section.” It also notes the store’s wine and beer section, described as “much larger” than the local Publix. Employees are “friendly” and selection and prices are in line with Publix.
According to the Tampa Bay Business Journal, the store offers more than 30 fresh-pressed juices made daily along with a long list of hot multicultural foods for takeout. Safeway’s Just for U mobile app will offer customers digital coupons and personalized deals.
The new stores also offer home delivery of groceries to locations within 30 miles. There is a $49 minimum order, with delivery fees dropping from $12.95 to $9.95 for orders of $150 or more.
One of the significant challenges facing Safeway in Florida is likely to be distribution. The three stores are part of the chain’s Eastern division, which primarily operates in the area around Washington, DC. It would appear Safeway would need to build up its store base to properly supply the state. Safeway has yet to reveal what it plans next.
- First Safeway opens in Florida with grocery delivery service – Tampa Bay Business Journal
- Take a look inside the Safeway grocery store in Largo, Publix’s newest competition – Tampa Bay Times
- Safeway grocery chain debuts in Altamonte Springs at remodeled Albertsons – Orlando Sentinel
- What is Albertsons (Safeway) doing in Florida? – RetailWire
DISCUSSION QUESTIONS: Will Safeway be more successful in Florida than Albertsons was? Do you agree that Publix has an “unreasonably high market share” in the state?