Publix Goes Au Naturale
By George Anderson
Publix Supermarkets announced it plans to open two new natural food stores under the company’s GreenWise banner in 2006.
Shoppers at the Lakeland, Fla.-based chain store are already familiar with GreenWise. The grocer has branded its natural foods sections in existing stores under that name and has a broad line of products sold with the GreenWise label.
Maria Brous, a spokesperson for Publix, said, “The format will be an extension of our offerings in the health and wellness categories. We have created a prototype to meet the needs of our customers who are interested in natural foods.”
The prevailing view is Publix is making this move to counter competition from the likes of Whole Foods and others targeting health-conscious consumers.
Gene Hoffman, president of Corporate Strategies International and RetailWire BrainTrust member, told The Ledger newspaper, “Publix has always been tuned in to the needs of its customers better than its chain-store competition.”
“They seem to have done an awfully good job of convincing people. They will do whatever these people want them to do,” said Mr. Hoffman. “Now they’re going to go into natural foods, which has been around for a decade or two. That is a natural extension of what the Publix philosophy has always been, which is to give customers what they want.”
The move to test a natural foods format follows the recent rollout of Publix Sabor, a format targeted to Latino consumers.
Moderator’s Comment: What is your reaction to Publix testing a natural foods store concept? What challenges, if any, will the company face in this area
that may be different than in its traditional grocery business? Do you expect to see other mainstream grocery businesses following suit? –
George Anderson – Moderator
The challenge for Publix is the same as any multi-format retailer faces when the formats address distinct target markets. Across all “front end” aspects of the store, the new format must be distinct and synergistically so.
Is Publix dedicating a unique team of merchants to procure and assemble targeted, focused and trend-right merchandise assortments? Is Publix instituting distinct hiring, training, and staffing policies and expense standards? Has the implication of fresher and shorter shelf life products been understood down through the Supply Chain?
If the answers to the above are “no,” then the effort probably will not succeed. Everything…and no, that is not an exaggeration…must be distinct. This is NOT the Publix customer. They are being served. This is a different customer, with different lifestyle needs, different price sensitivities, and different expectations. Meeting those expectations well requires a strategically and tactically aligned organization invisible to the consumer.
Format extensions which sell different products to the same core customer you know and love are so much easier to execute!
Like so much in retail, this CAN be done. However, it requires planning, coordination and distinction. The same people who excel at serving the core Publix customer cannot be expected to suddenly excel at serving this new customer. It is simply not reasonable.
Does Federated try to have Macy’s buyers select merchandise for Bloomingdales? Do Bloomingdales store managers get paid the same way that Macy’s does? Are the retail – cost of goods – expense structures the same?
Another smart move by Publix. Makes you wonder why they haven’t done this sooner. Starting with two stores to test with will help them with the learning curve. I’m sure they know what demographics they need (high income, well educated consumers). Even poorly run natural foods stores seem to be doing well and the good operators are doing fantastic. Whole Foods and Traders Joe’s seems to be kicking … and taking names in an era of big box expansion. It’s only natural that a smart retailer like Publix follow suit.
Raley’s Supermarkets, Sacramento, has been one of the largest purveyors of natural foods in California and Nevada for two decades and, before the recent advent of specialty stores, was once the largest. Their big, airy, dedicated departments are well executed and even have their own frozen and refrigerated cases.
Contrary to the idea of stores dedicated only to natural foods, Raley’s realized that families shop to please the varying tastes of each member. More often than not, natural foods are purchased for individual members of a family, but not for the entire family. At Raley’s, Twinkies make it into the shopping cart along with the tofu. It’s a mistake for Publix or anyone else to assume that natural foods customers are not also supermarket customers. Whole Foods, Wild Oats, etc. concentrate on natural foods because that’s their point of entry. But, supermarket chains can match the selection of the best natural foods stores inside existing locations, thus serving the whole family.
Publix Rocks! No other supermarket gives even close to their customer experience.
Admittedly my firsthand knowledge of Publix is zilch, and I do think that Don has raised some very important points, there is no reason, in principle, to think that any supermarket cannot do what Publix is setting out to do. Judging by what consumers are currently seeking, and indicating that they will seek even more aggressively in the future (encouraged, of course, by the government and its beeeoooteeeful food pyramid), this move makes a great deal of sense. I wish them luck but hope that they do consider the types of things that Don mentions.
Don Delzell raises six pertinent questions above. From my experience and my later observations, Publix reminds me of Target in that they prepare very well and evolve from there. Publix has always been tuned into the wants and needs of its customers better than its chain store competition in Florida. Even with the relatively newer entry of Whole Foods and Wal-Mart Supercenters, which now operate in all five states where Publix has its 850 or so stores, Publix still finds ways to serve its existing – and its potential – customers better than anyone else could serve them.
Some of Publix’ earlier chain competitors in Florida — Winn-Dixie, A&P, Food Fair, Pantry Pride, etc. — never rose to the Publix standards. They just sort of laid there and they died there. While the questions about what Publix must do to be successful in natural foods are pertinent, so too are similar questions about what Publix’ new competitors must do. Until the scores are posted, Publix is Florida’s food retailing icon.
Publix continues to analyze the marketplace and the consumer base with the understanding of the need to segment the business. Its Hispanic store effort is another excellent effort…another, example of this superior supermarket company’s understanding of consumer marketing and fulfilling its shopper base needs!!!!!!!!!!! Hmmmmmm.
Being privately held (or employee-owned) they don’t have to worry about Wall Street every quarter, and this strength has let them do some long-term strategic things that other retailers have not been able to do. Publix is a great operator, but the point made about the “healthy” market being different from their present core customer rings true. They’ll have to really put some more focus there, and I hope they realize that. Educating their buyers there won’t happen overnight, even if the buyers think they have it all down pat already. Long-term, I think Publix will succeed. Good team, smart operators, with a strong understanding of niche marketing. They may stumble a little at the start, but they’ll learn and continue to move ahead.
I believe that Publix has the discipline and management team to be successful with their new endeavor. I think, when you look at the approach to Hispanic, this would seem to be a proper next step. It will be interesting as to how they approach produce where the leader, Whole Foods, does such a great job with bulk, eye catching displays, and Publix’ approach to packaging… which seems to be almost “anti-natural.”
Just adding my consumer perspective:
I am dancing a dance of glee!
I drive so far out of my way to go to Whole Foods Market.
Although I made a commitment to eat healthfully, I still complain under my breath how difficult it is to do so, starting with difficulty/time loss obtaining better products.
I’m just hoping they are strategic with the test stores, so that it rolls out across the U.S.