Does Publix have an unrealistic share of Florida’s grocery market?

Discussion
Photo: Stephen B. Calvert, Wikipedia
Jun 22, 2016
George Anderson

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.

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?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The Albertsons/Safeway chain has highly positive momentum today and is well positioned to become a second option to Publix shoppers."
"To truly understand Publix and why they carry the brand love they do, I truly believe you have to be a Publix shopper."
"Grocery retailers want to take a close look at the shifting but growing population of Florida, now the third largest State in the country."

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16 Comments on "Does Publix have an unrealistic share of Florida’s grocery market?"


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Brittain Ladd
Guest

Publix does not have unreasonably high market share in Florida. Publix is successful because customers like what Publix provides. In regards to Safeway … yes, there is a potential market opportunity for Safeway but I continue to believe that Florida is an optimal market for Lidl to enter. Safeway is too similar to Publix whereas Lidl would offer Floridians a much needed change in format, selection and price of groceries.

In many ways, the discussion about Publix in Florida reminds me of complaints I heard from grocery retailers concerning the popularity of the regional grocery retailer H-E-B in San Antonio and Austin, Texas. H-E-B continues to thrive and beat back competition from much larger retailers including Walmart.

Ross Ely
Guest

“Unreasonable” is an odd word to describe Publix’s market share in Florida. Actually, it’s perfectly reasonable as Publix earned its dominant share through outstanding execution.

That being said, Safeway has a very good opportunity to succeed in the Florida market. The state has a huge, highly diverse population with a wide variety of needs and wants. The Albertsons/Safeway chain has highly positive momentum today and is well positioned to become a second option to Publix shoppers.

Richard J. George, Ph.D.
BrainTrust

Given the described enhancements that Safeway is introducing in Florida, they probably will do better than Albertsons or even Winn-Dixie did against Publix. However, as noted, the current market penetration will provide some logistical challenges.

I do not agree with the statement that Publix has an “unreasonably high market share” in the state. Publix’s biggest competitor is itself. Normally, success breeds complacency. Not in the case of Publix who continues to innovate, move north against the likes of Harris Teeter and consistently is recognized along with Wegmans as one of the best supermarkets in America. New banners like GreenWise and Sabor, along with its innovative Aprons program, are indicators that the company is not resting on its laurels.

At the end of the day I do not see Safeway as a game-changer or even a significant share-stealer.

Frank Riso
BrainTrust

Even with closer management Safeway is no match for Publix. I do believe that a Safeway is more of a competitor than Winn-Dixie. Publix will continue to dominate in Florida with so many snowbirds and retirees enjoying the renowned customer service.

David Livingston
Guest
3 years 6 months ago

Publix does not have an unrealistic market share. There is no such thing. It is not that Safeway will be more successful but rather less unsuccessful than Albertsons. They are still an ineffectual competitor.

Paula Rosenblum
BrainTrust

What a funny point of view. “Unreasonably high market share?”

The original retail aphorism “Location, location, location” holds true here (along with other factors). In Miami-Dade and Broward, there is a Publix approximately every 20 blocks. When the heat and humidity are as bad as they are here, and public transportation is as poor as it is, that’s an imperative.

It’s actually a pain in the neck to drive long distances to buy from someone else. And Publix is close enough on price and selection to make it an easy decision to stay close to home. And there are NEVER long lines at any Publix I go to.

Safeway will NOT be more successful than Albertsons was.

Roger Saunders
Guest
Grocery retailers want to take a close look at the shifting but growing population of Florida, now the third largest State in the country. With a population base that is growing rapidly in a dispersed number of cities scattered across a large landmass, a significant opportunity is open to grocers. The Prosper Monthly Consumer Survey continues to point to solid, modest growth of consumer staple goods — it’s been in that position for the past 14 months. The “however” is that perhaps the grocery market is not going to abandon Publix. Their impressive market share among traditional grocery store shoppers is strong for a reason — clean, well-run stores, wide aisles, knowledgeable associates who are attentive to consumers and a high-low pricing system that regular customers understand and value. The competitor opportunities lie in expansion growth by retailers offering value, like Aldi and Trader Joe’s. Specialty stores at the higher end of the market like Fresh Market, Whole Foods and localized specialty stores. Talented entrepreneurs like Tony Orlando, a BrainTrust commentator who understands the real… Read more »
Dr. Stephen Needel
BrainTrust

Anybody is a better competitor than Winn-Dixie these days. But is Safeway? I’ll bet on Publix because they’re smart and run good stores. Can we say the same for Safeway? Not sure. And as all have mentioned, how will they solve distribution?

Michael Blackburn
Guest
3 years 6 months ago

Publix’s market share is certainly vulnerable. Yes, they have a good format and solid merchandising. However, most customers I’ve spoken with still complain about their pricing and would easily shop a lower-price alternative — assuming a similar quality store and product — if they had a chance. Perhaps Albertsons/Safeway can find a way to do this, or maybe Kroger finally makes a move.

Laura Davis-Taylor
BrainTrust
Laura Davis-Taylor
Co-Founder, HighStreet Collective
3 years 6 months ago
To truly understand Publix and why they carry the brand love they do, I truly believe you have to be a Publix shopper. Having grown up with their stores, worked in their stores as a teen and then worked with them as a client, I can say that there are many, many reasons that they stand apart from an experience perspective. They are still run by family members; they take care of their employees, many working there for decades and retiring with stock; they don’t treat any shopper differently (thus no loyalty program), as they are all special guests; they truly care about the experience — the quality, the state of the stores, the right associate attitude. It’s not one thing — it’s many things, all done exceptionally. So no, I do not think that Florida is ripe for competition. If you live in Florida and shop at Publix, they are like family. That store is just part of your life and the experience is one that you can count on — all the time.… Read more »
Brittain Ladd
Guest

Interesting comments, Laura. Much of what you’re saying is probably true but your comments remind me of what I used to hear from people in Australia when they spoke about a retailer named Woolworths. For years Woolworths couldn’t be touched by a competitor but in the mid-2000s a retailer named Coles began an all-out assault against Woolworths. Coles has beaten Woolworths for 28 straight quarters in nearly every retail metric, most importantly customer satisfaction. To make things worse, ALDI has begun to steal market share as well from Woolworths.

Yes, Publix is popular in Florida but if a retailer comes along offering lower prices and convenience, Publix will not be immune.

Craig Sundstrom
Guest

Well, anything is better than Albertsons, so the threshold is low; and in my one visit to a Publix (in Miami) I was underwhelmed (not because of anything being wrong, but because my expectations were so high). But I suspect the crux of the matter is contained in the last paragraph: the logistics of a small store base, and the lack of name recognition that comes with it.

In short: someone can probably challenge Publix, but probably not THIS one.

Cathy Hotka
BrainTrust

Let’s face it: Publix is the happiest place on earth. Safeway will have to set standards never before attempted to best Publix’s selections and ultra-friendly and engaging staff. Are they up to the task?

HY Louis
Guest
3 years 6 months ago

Publix is way ahead of the curve. Safeway has a near zero market share in Florida. If Kroger bought Winn-Dixie, increased sales 50%, they would still be doing horrible. Publix has a sales per square foot production of nearly 3 times Winn-Dixie. Publix, with the help of Walmart, has crushed all the conventional competitors. Albertsons, Food Lion, Sweetbay, and Bruno’s are gone. Winn-Dixie was crushed into bankruptcy. No one has a prayer, not even Kroger.

Al McClain
Staff

Publix is a very good operation, but there is a large hole in prepared foods and a modest one in the rest of the perimeter. There is an opportunity to compete with them, but it won’t be easy.

Bill Hanifin
BrainTrust
I don’t think there is such a thing as an “unreasonably high market share” depending on how that phrase is defined. Publix has earned its market share over the years through great customer service and smart merchandising. To say that Publix’s market share is “unreasonably high” is akin to suggesting that Usain Bolt wins an unreasonably high percentage of the races he enters. Usain Bolt has just been better than his competition over the past few years and the same can be said of Publix over the past two to three decades. I don’t think Publix needs to worry much about Safeway’s small entry into the state of Florida. I do think it needs to think about evolving its customer experience forward to anticipate potential entry by Wegmans or another chain that offers an environment where customers can sit, sip and check their email in a cafe. Publix has prospered on its association with core values in Florida. It is the last brand standing from Eckerd Drugs, Barnett Bank and the like. Now would be… Read more »
wpDiscuz
Braintrust
"The Albertsons/Safeway chain has highly positive momentum today and is well positioned to become a second option to Publix shoppers."
"To truly understand Publix and why they carry the brand love they do, I truly believe you have to be a Publix shopper."
"Grocery retailers want to take a close look at the shifting but growing population of Florida, now the third largest State in the country."

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