Model Citizen
A passionate commitment to customers and community, combined with a quality-focused store brand program, make Publix a true leader in the supermarket arena.
Product and exterior store photos courtesy of Publix.
In-store photos by Mimi Austin.
Publix Super Markets long has touted a commitment to outstanding customer service. And anyone doubting the genuineness of the retailer's dedication to its shoppers need only check out a link on the "PublixJobs" Twitter homepage. Here, employees (or "associates," as Publix calls its employee-owners) provide testimonials that reveal not only their commitment to shoppers, but also their devotion to — and admiration for — their Lakeland, Fla.-based employer.
Perhaps "Miranda" — a culinary school graduate who works as an assistant bakery manager for Publix and has been with the retailer since 2001 — sums it up best:
"As time went by, I realized there was one thing the culinary school never taught me, and that was working with others," her Twitter post says. "Publix taught me compassion, dignity and respect … basically, how you should treat family. I guess that's where Publix got the term, 'the Publix Family.'"
Maria Brous, director of media and community relations for the privately owned Publix, agrees that the retailer is "all about people" — and explains that this philosophy incorporates both internal and external customers.
"Our success is attributed to our associates and the care and commitment they take and make to our customers," she says.
Speaking of success, Publix managed to weather the recent recession with little impact on its bottom line. And the company looks to be on track going forward as well — its first-quarter 2010 sales were up 2.1 percent over 2009 figures (although comparable-store sales declined by 0.9 percent), while net earnings rose 13.3 percent.
"I'm proud of all the Publix associates who have worked hard to continue delivering premier customer service in these difficult times," CEO Ed Crenshaw said in a May 3 earnings-related press release. "Our improved operating performance is a result of their hard work and dedication."
Industry observers only verify what Publix and its associates and customers already know.
"I believe the primary reason Publix has succeeded when others have not is their focus on the customer," says Kevin Sterneckert, research director for AMR Research, part of Stamford, Conn.-based Gartner Inc. "You could say, 'Well, everybody thinks about their customer.' But Publix does it in ways that translate the way they think about their customer into the way they relate to their customer."
Proof of that focus, he says, is the retailer's top ranking among supermarkets, year after year, in the American Customer Satisfaction Index (ACSI). In fact, in 2009, Publix received what Ann Arbor, Mich.-based ASCI counts as the highest company score ever recorded in that industry: an 86. (See the sidebar on p. 16 for a sampling of other company honors.)
But it's more than happy associates and great customer service that attract folks back to Publix's stores week after week. Paula Rosenblum, a managing partner at Retail Systems Research (RSR) of Miami, adds "very tailored and localized assortments," strong community involvement in terms of charitable work and more, and "a shockingly quick checkout experience" (even in a crowded store) to the list of contributing attributes.
Bill Emerson, founder of Palm Beach County, Fla.-based Emerson Advisors, agrees with Rosenblum's observations. In fact, he calls the retailer's micro-assortment planning — the layer of SKUs that speak directly to each local trading area and the people who shop there — extremely smart.
Despite the fact that this SKU mix represents a very small percentage of Publix's overall assortment, "They make it very visible and very prominent in their display spaces in the stores," he explains. "My sense is that they're very much focused on their local community and on what's going on there. And they communicate that very well, I think, to their local customers."
Sterneckert agrees, noting that Publix is rather philanthropic in its approach to community relations.
"I believe they've done an amazing job of building an environment where the customer is the center of their business," he adds.
As for the speedy checkout process, Emerson notes that the customer service manager at the Publix store near his West Palm Beach, Fla., home "jumps right in and opens a cash register" whenever the lines grow long. With the tough economy forcing the supermarket sector into a market share game, that kind of effort can be a game-changer.
"The only way to succeed in a market share game is to get people to drive by your competition to go to your store," he adds, "which I do to get to a Publix."
Eye on quality
Another critical component in Publix's quest to gain and keep loyal customers is the retailer's wide assortment of quality products. Brous says Publix offers a good balance of national brand and store brand products to give its shoppers a choice.
The bulk of the retailer's own-brand products fall under the Publix brand — positioned to be as good as or better than their national brand equivalents, Brous says. This brand, recognizable at a glance by a black circle surrounding the Publix name (in white), also incorporates a number of Hispanic products. These are designed to appeal not only to Hispanic shoppers, but also to other shoppers who are interested in trying out a great culinary experience.*
*Publix also operates the Publix Sabor supermarket format, developed with a Hispanic influence and featuring "important differences to product brands, services and store environment." The retailer notes that ads and product information are conveyed in both English and Spanish.
The Publix products are available at a good price, and are a great value, Brous explains.
"We offer great-quality products, guaranteed, and the products are available in popular sizes, flavors [and] packages," she adds.
The Publix Premium brand, meanwhile, represents the retailer's top-tier, or upscale, items. Brous says these products are positioned as premium (with unique attributes) and compare to specialty brands.
In addition, department-specific brands — Publix Deli and Publix Bakery — cover a range of quality deli and bakery products, Brous notes. The newest items here are five fresh ready-to-eat Publix Deli kids' meals. Retailing for $3.99, each meal consists of an entrée, two or three sides and a beverage. Publix's in-house registered dietician was involved in the planning process to ensure the meals are balanced, wholesome and nutritious. A sample offering is an entrée multigrain wrap containing creamy peanut butter and apples; string cheese, mini carrot and kids' yogurt sides; and an organic fruit juice.
Finally, for eco-minded shoppers, Publix GreenWise Market products offer high-quality natural, organic and/or generally "earth-friendly" choices. Born out of the retailer's Publix GreenWise Market store concept ("organic, all-natural, and earth-friendly products, excellent food, and a thoroughly enjoyable shopping experience"), the products also are sold in the more mainstream Publix stores.
According to Brous, Publix GreenWise Market products boast a health-focused spin that goes beyond an all-natural or organic status. In general, that means a lower sodium content, no GMO products, no trans fats and a lower calorie count — an approach that differs from that of retailers that create essentially unhealthy products and label them as organic. "That is not what Publix GreenWise Market stands for," Brous maintains.
Emerson believes the Publix GreenWise Market concepts, as both a banner and a private brand, were "brilliant" moves in terms of strategy for the retailer. Although the stores tend toward upscale — and the organic store brand items within them cost more than Publix's mainstream store brands — the concept is not as "ideologically pure" as that of Whole Foods, he contends. And that's just fine with him.
"If you go into a Whole Foods, you can't buy Diet Coke, for Pete's sake," he says. "In the end, I go to another supermarket and I buy Diet Coke. But with the GreenWise concept, they have all of the organic offerings, but they still have some mainline assortment as well. So in the end, it makes it more convenient for people like me, who aren't walking around in Birkenstocks or bamboo clothing."
Even more important, Emerson maintains, is the fact that Publix makes the brand available within all Publix stores. And he, like many other shoppers, buys it there.
"The quality of the product is great," he says. "Most private label tends to be all about price. They're not afraid to go in and say, 'Here's one we will position to be equivalent, or in some cases, even slightly higher than the national brands. That takes a great deal of commitment and a certain amount of courage."
Simplicity rules
The products' appeal is further enhanced by a package design that emphasizes white space and overall simplicity — the result of a major redesign project that took place a few years back. Brous says the goal was to "keep the design simple" and "allow it to cut through clutter in an environment that's already loaded with thousands of messages." Publix also didn't want to take itself too seriously, she adds, so it made sure to incorporate a bit of humor wherever possible (and appropriate).
That's turned out to be a good thing. Brous says customers have had an "overwhelmingly positive" response to whimsical touches such as tinfoil animals.
"If we can make our customer smile, we've engaged with them on an emotional level, which builds advocacy, and they typically like our products," she says.
Through the redesign, Publix established packaging design systems that can be applied consistently across all categories. The result? Brous says customers who already liked and trusted the retailer's products now are able to locate them more easily. What's more, the visually appealing, engaging designs encourage trial among shoppers who might not have purchased such products in the past.
"Going all-white and simple with the Publix brand line was a little risky," Brous admits. "We knew if we weren't careful, it could come off as 'generic.' We believe we found a good balance between simple and engaging by combining interesting imagery and typography with a predominantly white background."
Emerson certainly believes the retailer achieved a good balance.
"I love their packaging," he says. "To me, it speaks to their commitment that their product is going to be the equivalent of a national brand."
Sterneckert, too, gives a thumbs-up to the end result, calling it "fresh and appealing." He says Publix's packaging also does a great job in communicating a product's function and purpose to consumers — and thereby simplifying the shopping process. And even though several other major retailers have attempted to mimic the packaging's clean, white look, he doesn't believe it is cause for concern on Publix's part.
"I think the leaders are always going to have those that want to copy successful programs, right?" Sterneckert notes. "The great thing about a leader is you're always one step ahead. And Publix has clearly demonstrated that they lead in private label penetration."
In keeping with its leadership status, Publix recently introduced a new package design system for its Publix Premium lineup.
"This new system leverages the learning we've had from our Publix brand private label line while supporting the up-tier position of Publix Premium," Brous explains. "It's simple, yet elegant."
But Publix's quest to sell customers on its store brands doesn't end with quality products and packaging. The retailer made headlines in 2006 when it introduced a unique buy-one/get-one (BOGO) program in which shoppers who purchased a specific national brand product received the Publix brand equivalent for free.
"I think its BOGO program was brilliant," Rosenblum says. "It showed confidence that has stayed in consumer consciousness."
Brous says Publix continues to evolve this program to capture different or new categories.
Prepared for the future
Despite its many successes inside and outside the store brand arena, Publix — like all other retailers — faces a number of unique challenges in its quest to stay on top of a rapidly changing world. One of its key store brand-related goals, Brous says, is to make every SKU "work" — for both customers and the company.
"We operate smaller stores than most of our competitors, and we also offer more variety," she says. "So it is important that we continually manage the product mix."
Even Emerson says that Publix, "like everyone else," still seems to be trying to determine the ideal SKU mix. And that's a difficult process, one that really needs to be tackled based on sales within specific micro markets, he contends.
Another ongoing challenge, Brous says, comes in private label sourcing and responsiveness.
"Sourcing the quality that we demand at the quantity we need is an ongoing challenge," she acknowledges. "Food safety, country of origin [and] commodity shortages all add a layer of difficulty to ensuring we have the right product, at the right time, at the right price."
She says responsiveness means staying current and relevant with customer needs. Publix continually strives to identify and separate the fads from genuine trends.
Publix does manufacturer some of its own products (about 10 percent of total store brand items; mostly dairy, bakery and deli items), a reality that brings with it both benefits and challenges. On the plus side, the retailer is able to control the entire product production process, Brous notes. But it also needs to be able to stay current with changes in product development, ingredient procurement and packaging — and manage the entire supply chain.
As for the approximately 90 percent of store brand products supplied by outside manufacturers, Publix outlines its expectations at the outset.
"We communicate it clearly during any review where new suppliers are identified, vetted and selected," Brous says. "We make every effort to communicate our requirements, expectations and benchmarks for every supplier chosen to manufacture product for Publix."
The company also expects suppliers to serve as partners in new product development, she says. At a minimum, existing suppliers (which currently number over 200) must take an active role in ensuring Publix's products stay current with improved or revamped national brand alternatives.
"At best, we have suppliers bringing new formulations, product attributes or benefits for us to consider as a new product, line extension or a reformulation," Brous explains. "The same applies to packaging."
Publix also has in place what Brous terms a "very extensive" quality assurance program to ensure the highest level of quality for store brand items. Products are tested based on risk, supplier performance and customer complaints to provide "a solid baseline" for evaluations. What's more, Publix is actively moving its own manufacturing operations and outside suppliers to international Safe Quality Food (SQF) standards.
"Being prepared and responsive to new legislation and regulation is what we have been spending a majority of our time with over the last two years," Brous says. "Measuring consistent production of the established quality standards over time is traditionally the biggest challenge," she adds, noting that the company also has been focused on country of origin in relation to store brand products' individual ingredients.
Challenges aside, Publix seems poised to continue its string of successes in the months and years to come.
"I believe that they've done an amazing job of building an environment where the customer is the center of their business, and they've focused on how they can differentiate their stores to cater to the local market," Sterneckert offers. "And in a grocery chain of Publix's size, that's very difficult to accomplish."
Publix, at a glance
Headquarters: Lakeland, Fla.
Top Executive: Ed Crenshaw, CEO
Grocery retail banners: Publix Super Markets (1,000), Publix Sabor (four) and Publix GreenWise Market (three)
Manufacturing operations: Atlanta (bakery plant); Deerfield Beach, Fla. (dairy plant, fresh foods); Jacksonville, Fla. (fresh foods); Lakeland, Fla. (bakery and dairy plants, deli kitchen, fresh foods, printing services); Lawrenceville, Ga. (dairy plant)
High Honors
When it comes to fans, Publix can count more than its loyal customers among the crowd. The company continues to rack up honors from myriad outside organizations.
In January, Publix was honored by Fortune magazine as one of the "100 Best Companies To Work For" — for the 13th consecutive year. Scores were determined, in part, by a survey sent to a random sample of employees, with company responses to a Culture Audit questionnaire also factoring in.
BusinessWeek, too, honored Publix this year, naming the retailer number 5 on its "Customer Service Champs" list. The list highlights the top 50 providers of excellent customer service and the techniques, strategies and tools those companies use to make the customer their top priority. Publix, one of only two supermarkets to be honored this year, has ranked on the list every year since its inception in 2007.
And in June, the annual ImagePower Green Brands Survey named Publix as number 8 on its U.S. Green Brands 2010 top 10 list. Whole Foods, Trader Joe's and Ikea were the only other retail "brands" to make the top 10.