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November 6, 2024
What Can Other Grocery Retailers Learn From Publix’s Successful Formula?
Publix is seeing success on many levels in the grocery retail sector.
Retail Today published an article in September about how Publix, the largest employee-owned company in the U.S., has grown successfully from its Florida roots. One of the main keys to its success comes from leveraging technology to stay ahead in a competitive market. The company’s $50 million investment in a high-tech campus in Lakeland, Florida, is central to its digital transformation, driving innovation in areas like artificial intelligence (AI), automation, and retail media.
AI tools are helping Publix optimize inventory, improve customer service, and personalize shopping experiences, while its strategic partnership with Instacart has expanded delivery and curbside pickup services, including a popular 15-minute delivery option. These technological investments are helping Publix be set apart from competitors like Amazon Fresh and Walmart.
Furthermore, Publix leverages its retail media by taking advantage of “vast amounts of data from its large customer base, and it has begun to monetize this data by offering targeted advertising opportunities for consumer packaged goods (CPG) brands.”
At the same time, the company’s strong employee-first culture, with over 250,000 associates, plays a crucial role in its success. Recognized for 26 consecutive years as one of Fortune’s “100 Best Companies to Work For” list, the company’s focus on employee satisfaction and retention contributes to its high customer service standards.
Over time, Publix has positioned itself as a strong local player, with a local sourcing strategy and a commitment to customer service. Back in March, Barron’s reported that “Publix dominates the Florida grocery market,” sharing that the grocer has triple the margins of Kroger and a “fortress balance sheet.”
Barron’s noted that the grocery chain has 1,360 stores across the Southeast and enjoys a strong balance sheet, minimal long-term debt, and over $13 billion in investments. Publix’s focus on customer service, a culture of employee ownership, and its strategic expansion — particularly in Florida, where it operates 859 stores — has driven out most competitors. While not publicly traded, its $50 billion valuation surpasses Kroger’s $40 billion, and many longtime employees are millionaires due to stock ownership.
Currently, Publix boasts 235,000 shareholders, which includes the majority of its 250,000 employees. These workers have the opportunity to acquire stock through the company’s retirement plans and can also purchase shares directly after completing one year of employment.
“Publix is like a freight train,” retailing consultant David Livingston told Barron’s. “It’s not stopping and will keep going despite whatever else is happening. In a few years when their new stores mature and the ineffectual competitors are closed, we should see a big (return) on their expansion.” He added, “Publix is unique being employee owned. They have a culture of making employees and customers feel good about shopping and working.”
According to the most recent financial report from Publix, “Net earnings for the three months ended Sept. 28, 2024, were $1.1 billion, compared to $833 million in 2023, an increase of 31.7%. Earnings per share for the three months ended Sept. 28, 2024, increased to $0.33 per share, up from $0.25 per share in 2023.”
The company’s financial performance for the nine months ending Sept. 28, 2024, showed notable growth, with total sales reaching $44.2 billion. This represents a 4.3% increase compared to $42.4 billion for the same period in 2023. In addition, the company saw a 2.5% rise in comparable store sales, reflecting positive customer traffic and higher sales at its established locations.
Meanwhile, the company has raised its stock price to $18.05 per share, up from $16.46. Publix’s stock, which is not publicly traded, remains available exclusively to current employees and members of its board of directors.
At the end of the report, the company’s CEO concluded with an encouraging message summing up the essence of the grocery retailer.
“During the last several weeks, many of our associates and customers have faced difficult times with Hurricanes Helene and Milton. I’m so proud of our associates for the comfort they bring to our customers and their fellow associates.”
Publix CEO Kevin Murphy via Publix
Discussion Questions
How does Publix’s blend of technology and employee ownership enable it to dominate the Florida grocery market, and what can other retailers learn from this approach?
What are the long-term implications of AI in grocery retail for both operational efficiency and customer experience, especially in balancing automation with personal service?
How can retailers successfully expand nationally or globally while maintaining strong local connections with customers and employees, as seen with Publix’s community-driven model?
Poll
Loading …BrainTrust
Frank Margolis
Executive Director, Growth Marketing & Business Development, Toshiba Global Commerce Solutions
Brad Halverson
Principal, Clearbrand CX
Joel Rubinson
President, Rubinson Partners, Inc.
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Publix is one of the better grocers in the US and its success comes down to a compelling proposition based on clear values. It offers good service, keeps its store nice, has a solid selection of food, and focuses on quality. Those things resonate with shoppers and keep them coming back. There are so many grocery stores in the US – Albertsons, Kroger, Hannaford – that are too middle of the road and have no significant points of differentiation.
The strength of Publix comes down to 2 things – size and ownership. Some of the best grocers are regional (Wegmans is another great example), because they aren’t too large to be managed to the original high standards of earlier stores. And because Publix is employee-owned, you see a far higher degree of ownership and tenure amongst the associates, which translates into a better shopping experience.
Try as they might, Publix’s larger competitors will never be able to replicate this formula.
Spot on, Frank. Grocery is inherently regional, as shorter supply chains are always fresher, more accountable, and tied to local consumption patterns. Best thing the Krogers of this country could do is break themselves up.
Publix is a better option in a southeastern sea of middle-of-the-road, or low-price chain stores. They’ve positioned themselves perfectly with just enough of an improvement in quality, variety, and selection so their formula resonates to a large enough shopper base.
Many more independent and regional grocers across the country are also succeeding, and at even higher levels – in the north, west, and south. The result is a stronger bottom line because it works. Executing everyday on a better customer experience in product choice, quality, and local foods, while explaining this – is key to success and a meaningful brand.
Publix shows another way for grocery retailers to succeed, other than by lowest possible pricing. Their stores are beautiful experiences. A personal story…l was looking for a particular item and asked for help. Rather than the store employee telling me what aisle the product was in, he walked me over to the exact location and helped me locate the product on the shelf. Little courtesies like that are unforgettable and earn loyalty.
Publix Super Markets is a leading, employee‑owned U.S. supermarket chain known for its exceptional customer service, clean/safe stores, and high-quality products . Founded in Florida in 1930 by George W. Jenkins, Publix now operates about 1,410 stores across eight Southeastern states, including Florida, Georgia, Alabama, South Carolina, Tennessee, North Carolina, Virginia, and as of January 2024, Kentucky. The Publix Customer Voice Survey, available at PublixSurvey.com, is a brief online questionnaire (takes about 5–10 minutes) where customers share feedback on their recent in‑store experience.
The employee ownership element of Publix and the high percentage of employees who share in Publix growth should not be understated. This gives employees a financial benefit from Publix outperforming competitors. Associates walking you to an item is part of what’s increasing that associate’s share price.
The article does not share but as an employee stockholder, I will bet your tenure is longer than at a company where you’re just an employee. That’s a positive for Publix in terms of hiring, training and retained experience.
This structure also gives Publix more leeway in terms of where and how to invest for growth. The employee ownership structure makes it more challenging for competitors to outperform reward motivated associates.
There are many reasons for the success of Publix. I am a firm believer in getting the fundamentals right first. Publix offers shoppers outstanding customer service. It always has. That is a key reason for their success over the years, well before any advantage technology provides these days. Retailers can learn a lot from such a track record.
In recent times, I have heard a lot about Publix Supermarkets. They are more interested in listening to customer feedback through their Publix Survey. I believe that following customer feedback and improving store service are among the main successes for Publix Stores. We can find the Publixsurvey Online, so we need to submit the survey code to enter the survey. To encourage more customers to take the survey, they are offering a $1000 reward to the winners.