Photos: Publix, Wegmans
Publix and Wegmans to compete head on
Publix has been inexorably moving northward up the East Coast. Wegmans has been on a steady march south. With the news that Wegmans has found a location to open its first store in North Carolina, how long will it be before two of the nation’s supermarkets favored most among consumers go head-to-head?
Wegmans confirmed to The News & Observer that the family-owned grocery chain has signed a letter of intent to negotiate a lease for space within a new shopping center scheduled to open in Cary, NC. Publix already has one store operating in the area and has two others planned.
Publix and Wegmans regularly rank near the top when consumers are asked to name their favorite grocery chains. Publix, which bills itself as the largest employee-owned grocer in the U.S., is known for superior customer service and its BOGO sales on its private label. Wegmans, which operates big stores with an emphasis on produce, bakery and in-store food prep, has legions of fans including, most famously, the actor Alec Baldwin and his mother.
Both Publix and Wegmans view pharmacy as a means to achieve their sales and profit goals. A J.D. Power customer satisfaction study of nearly 15,000 consumers found Wegmans ranked first and Publix second among supermarkets with pharmacies. Interestingly, Wegmans’ score was higher than the top drugstore chain (Good Neighbor Pharmacy) named in the study, while Publix was tied with the second highest ranked drugstore (Health Mart).
- Wegmans seeks to open first NC grocery store near Cary Towne Center – The News & Observer
- Supermarket Buying Guide – Consumer Reports (sub. required)
- Trader Joe’s voted America’s favorite grocery store for a third straight year – MarketWatch
- Publix sees pharmacy as a growth engine – RetailWire
- Wegmans has the best pharmacy, too – RetailWire
Discussion Questions
What do you expect to happen when Publix and Wegmans begin competing in the same markets? If you were running Publix, how would you approach your competition with Wegmans? If you were running Wegmans, how would you go to market against Publix?
Poll
BrainTrust
Paula Rosenblum
Co-founder, RSR Research
J. Peter Deeb
Managing Partner, Deeb MacDonald & Associates, L.L.C.
I don’t believe that these two amazing chains want to get into a price war, but I’m sure the consumers would love it if they did. They need to keep doing what they have done and the thrifty consumer will use both stores to save money, as the more stores in the area will lead to more deals, plain and simple. The losers will be the independent grocers that have been around for years, and unless they have a very strong niche, or signature type foods, they will see sales slide. Wegmans has beautiful huge stores and Publix does as well, so it is a win for the communities they serve.
I am curious to see how these two titans get along without shrinking margins going after each other, and how the remaining stores react as well.
I expect someone is going to lose and it won’t be Publix or Wegmans. I think these two will compliment each other and use each other to drive out the competition. If I were Publix or Wegmans I would not do anything different and just be myself.
I think there’ll be a period of time when customers from one try the other, but unless there is something very compelling (and I just don’t see it being pharmacy, either), they’ll go back to their favorites.
This will be a classic battle between two undefeated heavy weights. These players are more similar than different and have consumer support, confidence and recognition to show for it.
If I were running Publix I would take notice of the Wegmans’ fresh sections, particularly its theater presentations for cheese, seafood, etc. In addition, if the North Carolina Wegmans adds a restaurant that would be of concern. Finally, Wegmans does a better job than Publix in center-store pricing (real and perceived).
If I were running Wegmans I would take a good look at Publix’s bakery, deli and sandwich offerings which are combining technology, quality and service to positively differentiate the supermarket. Also, the Aprons program appears to have good traction and customer support. Finally, the Publix front-end system of aisles open, friendly checkers and baggers, including free carryout to your vehicle, insure that the departing customer leaves delighted.
Speaking of customers, they will be the winners in this heavyweight supermarket prize fight.
If I were running Publix, I’m not sure I would make any dramatic changes. The appeal of Publix will be attractive to some in the markets served by Wegmans. And if I were Wegmans, I would continue to deliver exemplary service levels and a unique shopping experience. I believe the two rivals can compete quite successfully and coexist in these markets.
Trying to simply emulate competition is often a road to irrelevance.
This is great news for consumers. Both stores occupy a different niche. The retailer whose strategic intent and adaptation fits with local consumers will win. Each of these retailers needs to know the local consumers and adapt well to be successful.
I would expect that both companies will put enormous pressure on the people currently operating in the region. Harris Teeter (Kroger) will also be a staunch competitor. Other than deep discounters like Aldi and specialty stores like Trader Joe’s the rest of the marketplace is in trouble.
My assumption would be that both companies will approach the other by continuing the strategies that have made them successful. Both of their companies have prospered in new geographies by staying true to their identity. I don’t see much changing other than some pricing comparisons on key items. Both companies make their profits in center store on their store brands, which should continue. I think Wegmans will have the edge on the perimeter and will try to use that strength to make their mark.
My read is that it will be all about the customer experience. They will try both and from there they will decide. Shoppers (food) really want the store that they enjoy shopping. Price is a play but the store location and their product mix are two key elements that help lock their decision. The other element lifting is the value — real value — of the loyalty program. The best loyalty program will gain a major edge. Kroger knows this well.
As the Kenyan proverb goes, “When elephants fight, it is the grass that suffers.” There will be a few tactical moves by these elephants here and there, but they’d be wise to stick with their game-winning strategies that have worked so well over the long haul.
I grew up with Wegmans. I since have experienced the other national chains, including Publix and Kroger, and hands-down Wegmans will win out. I only wish they would move west instead of south!
First of all, I expect there will be lots of VERY satisfied customers.
On a perhaps more tactical note, they will compete long and hard to win over pharmacy customers — clearly a proven path to building a loyal customer base. Wegmans will push unique items and Publix will counter with high value. Who wins? Depends on the market.
In terms of the last question I think — again, depending on the market — Wegmans has a slight edge in the fight. If I were running the chain I would do whatever I could to get my signature food products into the hands (and mouths) of consumers. I’d also do whatever I could to challenge Publix’s legitimate claim to superior customer service.
As I said, I expect customers in these new markets to be VERY happy.
I would expect learning on both sides and, as a result, a better customer experience for everyone. Weaker operators in the markets just won’t be able to compete and likely will disappear.
George, et al:
I’ve been trying to tell you guys the war wasn’t over yet! Now look at what you’ve gone and done. Once again the North and South will meet in the middle and my beloved NC will be the battleground. Shoot, why didn’t they just build the stores on either side of the Goldsboro Bridge? Or maybe down at Fort Anderson? Then at least they would be fighting it out on consecrated ground.
With my luck, one of them (I’m betting on Danny Wegman) will resurrect Thomas’ Legion and get the his famous Cherokee fighters from my part of the state all riled up again. Then Bob Ingle, Jr. will have to call out his ancestors too, and the WNC hills will run red with Wagyu Beef blood.
Of course, there will be one key difference in this battle. The combatants will leave the field much improved and the real winners of the battle will be the good citizens of NC. I can just imagine my relatives now, anxiously awaiting the battle cry as they did generations ago. Except this time they will answer the call with their SUVs and their credit cards instead of mule-drawn wagons and muskets.
Should be epic!
In close proximity competition the big winner is always the consumer. This will prove to be the case when the proposed inevitable happens here. Part of the profit erosion facing large retailers even in densely populated areas in the long ago “good times” was the overpopulation of competitive brands. In these economic times it may prove foolish to ignite competitive fire storms with only statistical assurances of success. As for the observers it will be fun us to dissect the winner and loser for the possibility of finding innovative selling methods that passed and/or failed the test of a new retail war in weak economic conditions.
Wegmans and Publix are going to have a lot of fun and be friends. Together they will steamroll Food Lion, Bi-Lo, Piggly Wiggly and Lowe’s. Those are all ineffectual competitors. Walmart has announced several closings in North Carolina and now Walmart is looking weak and vulnerable. Harris Teeter/Kroger is OK, average and will do fine. But they are not in the same league as Wegmans and Publix.
I fully expect Wegmans to dominate. I grew up in upstate NY and was able to watch the company evolve from a “grocery store” to a “destination spot.” I don’t think there is anyone that won’t agree — no company does it better than Wegmans. Since moving to FL, I shop more often at Publix than other places — primarily because it’s an impractical use of my time to pass 5 of them on my way to a competitor.
Realizing not everyone can be a “Wegmans,” I have also visited chains such as HEB, Giant Carlisle, Price Chopper, Weis, Giant Eagle, Kroger and Market Basket to name a few.
The only compliments I can give truthfully give Publix is they are consistent, clean and well run at the front end. The prepared foods are average at best — (as long as you want to eat rotisserie chicken, fried chicken or a sub), bakery is good but nothing “special,” they have the same quality as most of the competition in produce, seafood and meat are consistent but not above average (actually WD has better), prices have gotten more competitive in the recent years and I do get the occasional $5 off coupon in the mail … but I guess what I am saying is I truly don’t get all of the accolades they receive.
In Florida, there isn’t another dominate grocery chain to compete against them — the club stores, Walmart, Whole Foods, Fresh Market; increasing numbers from Trader Joe’s, Aldi’s, etc. have all taken their share of the pie, but as far as traditional operators — not so much. I also know they don’t slaughter the competition in Georgia or the Carolina’s. They do well, but nothing like they do in FL.
If they want to stand a chance against Wegmans, they better up the game in prepared foods — quality and assortment, grab-go, salad bars, cheese shop, bakery quality and selection. They better find something unique that is “only Publix” that customers love and must have. They won’t keep/win a Wegmans shopper because they have a heartfelt commercial or a $5 off coupon. Wegmans shoppers are about the experience.
Wegmans doesn’t really need advice on how to compete with Publix. Just being who they are, doing what they do best, will be more than enough to win over shoppers.
It all points to a huge win for the consumer. However, they should both be prepared and acknowledge that Kroger/Harris-Teeter will not roll over especially now that the former leader of Harris-Teeter is now the EVP of Kroger retail operations. I suspect he will protect his previous footprint.
Let’s also not forget that they know the market best as well. Publix likely has a market knowledge level better than Wegmans, but I’m quite sure that Wegmans has done and is doing their homework.
Demographics are quite interesting in this region and the dynamics of change taking place as well, not to mention the transience factor of the military footprint in the region.
Good, better, and best will be found in the endeavor.
There is an old expression “when you do what you always do; you will get what you always got.” It was originally used with a negative connotation. But in this case, I think it is significant. If both Publix and Wegmans continue to do what they have been doing the shopping public will be the winners.
I don’t foresee a price war because that is not their style. I do see service as significant on both sides. So again the winner will be the shopping public.
Let the games begin. Wegmans may pick up the higher income shopper.
I have had the pleasure of working for both of these well respected companies for 26 years (still employed with one). I have worked in three different states with them. There are many similarities when it comes to the latest technologies used to run the business. They both treat their employees well and receive many accolades for this. The great customer service is unmatched in the areas i have lived and worked.
Having a vested interest in both companies, I am not sure how I would like things to go down. My hope is that they can coexist and learn from each other and run the other big guys out of every city (except for the independent grocers). I don’t believe either company needs to change a lot to compete with the other. Publix might want to up their game in the prepared foods arena, but Wegmans would be tough to top.
It’s interesting to watch how each company has a different philosophy when it comes to expansion. Publix is fast and furious, while Wegmans is slow and methodical. Not sure which is better because one negative I have seen with both is getting employees in new markets to buy into the “Wegmans way” of doing business and the “Publix way” of doing business. It tends to put a lot of added pressure on the employees that transfer with each company into these new markets. Maybe the first company that figures out how to accomplish this will be the one left standing.
Wegmans and Publix, where working is a pleasure!
I think we will all want to move to Cary, NC!
Wegmans offers a warmer environment with a greater variety of prepared foods and gourmet items. It also has a cafe area, coffee “shop” and customer service at least equal to Publix.
I think if Publix loyalists give Wegmans a try, even if from curiosity, they will like what they see. Competition is always productive for the consumer, and just maybe Publix will consider adding more warmth to its stores as well as one or more venues for customers to spend time in store and take respite while they have a coffee and check email.
Very interested to see the results after 6-12 months.