Is there anything that Publix doesn’t do extraordinarily well? Shoppers and vendors love it, it wins lots of awards and makes lots of money.

JUST HOW GOOD IS IT?

The Lakeland, Fla.-based chain is the best supermarket in the country when it comes to satisfying its customers, according to the American Customer Satisfaction Index. It’s been at the very top of the list since the National Quality Research Center, Ann Arbor, Mich., began the annual rankings back in 1994. This past year, it scored an 83 out of a possible 100, well ahead of Kroger (75), Supervalu (74) and Whole Foods Market (73), the next three on the list.
David VanAmburg, managing director of the National Quality Research Center, notes that Publix comes out consistently ahead of other supermarkets in customer satisfaction, based on factors such as customer service, pricing, inventory position and variety. It’s interesting to note that “All Other Supermarkets” came in last year with a score of 77, or second to Publix.
“We call households across the country randomly in the fourth quarter of each year, and ask them a wide variety of questions, including the supermarkets they’ve shopped most recently and so forth,” VanAmburg says. “It’s very common across industries for the smaller companies to be ranked the highest for customer service. So we get the names of many supermarkets from across the country, and just put them into the ‘All Other’ group. The exception to the rule over the years on this has been Publix.”    
Accolades from other groups could fill a full page of fine print, as they do on the company’s Web site, www.publix.com. (Go to “About Publix” and click on “Company Recognition.”) It’s been one of the top companies in Fortune magazine’s list of “100 Best Companies to Work For” every year since 1998. It’s ranked No. 20 this year on the Reputation Institute’s Global Pulse U.S. list of “The Most Respected Companies in the United States.” And it’s one of the top “10 Companies That Treat You Right” in a poll conducted this year by MSN Money-Zogby.
You get the idea. But besides just winning awards every time you turn around, the company is also very successful financially. (These two don’t always go hand-in-hand; we’ve known lots of award winners that went Chapter 11 the following year.)  
So hang on for this — some of these numbers and factoids will definitely get your attention. Publix is one of the 10 largest supermarket chains in the country, and also the nation’s largest employee-owned supermarket. Stockholder return for these employees significantly exceeds averages of the S&P 500 and a peer group of supermarkets.
In 2007, Publix had 937 stores, more than 141,000 employees (68,000 of them full-time) and sales of $23 billion. Last year the company opened 44 supermarkets, closed 10 and remodeled 97, for a net square footage increase of 3.7%. Capital expenditures were a healthy $683.3 million, which also included IT investments.
At the end of last year, Publix had 24 supermarkets under construction in Florida, five in Alabama, four in Georgia and one in South Carolina. This year, the company plans to open 45 supermarkets and invest $740 million on cap ex. Current prototypes range from 27,000 to 61,000 square feet.
Most store locations are leased, although Publix is starting to own more of them. But the company owns its corporate headquarters, eight primary distribution centers and its six manufacturing facilities free and clear. In March, William E. Crenshaw replaced his cousin, Charles H. Jenkins, Jr., as CEO, and Randall T. Jones, Sr., became president. Publix has a strong crew of stable, well-respected and well-liked senior executives who have been around a good while.    
For the first quarter of this year, Publix’s sales rose 6% to $5.9 billion, and earnings jumped 8.1% to $343.2 million. And to top it all off, Publix is acquiring 49 Albertsons stores in Florida next month, further solidifying its already formidable position.
We’d be remiss if we didn’t point out some market share statistics from Trade Dimensions, The Nielsen Company. While Publix still owns Miami with a 52.9% share, that’s slipped from 54.3% a year ago. Cumulatively, in the Miami, Orlando, Tampa and Jacksonville markets, its average share has dropped from 40.0% to 39.2%. But then Wal-Mart’s share in those markets has dipped from 26.7% to 25.7%.
So what’s up? The biggest wild card here is Winn-Dixie, which gained three share points in Miami during the period. Jacksonville-based Winn-Dixie has come a long way since being beaten down by Hurricane Wilma in 2004 and a rough Chapter 11.
One observer says that for awhile, Winn-Dixie’s stores were so bad they were almost unshoppable. People with a Winn-Dixie just down the street went elsewhere.
“But they (Winn-Dixie) have come back enough so that people are returning to the stores that are near their homes, and it’s had an impact,” he says. “So market share has shifted back some, which can be expected. What’s significant is that the data shows Wal-Mart losing more share than Publix while this was going on. I think a good majority of Publix stores are within a few miles of Wal-Mart. So Publix is faring very well, all things considered.”

HOW DOES PUBLIX DO IT?

Customer satisfaction. “Being associate owned and operated allows our associates to take a personal interest in our business and our customers’ shopping experiences,” says Maria Brous, director of media and community relations for Publix. “Our mission is to be the premier food retailer in the world. To that end, we will provide our customers with stellar customer service and quality products at competitive prices.
“In addition, we are passionately focused on customer value; intolerant of waste; dedicated to the dignity, value and employment security of our associates; and devoted to the highest standards of stewardship for our stockholders and involved as responsible citizens in our communities,” she says.    
Kevin Janiga, president of Winsights Marketing, Tampa, Fla., says Publix provides “a very pleasant shopping experience. Customer service is very good and the employees truly act like they enjoy working there. The stores are uncluttered, in-stock and clean.”
Says another observer, “Publix has used customer service as a major differentiator versus its competition. This includes being in stock at rates better than the competition as well as having more and better-trained employees. They are in stock, both case and features, and they have well-trained and committed employees.
“I think they have more full timers than the industry average, which means better commitment and knowledge. This is important when you are selling and merchandising more volatile sections like frozen and refrigerated foods. In a soft economy, I don’t see them moving away from this (a strong service model) because, like Wegmans, it is part of the culture. They may have to focus a little more on price, but they have good perimeters and will find a way to maintain margins.”  
The takeaway: You may not have employee ownership, but how committed are your employees? Is there a way you can make them feel more a part of the team? How do you show or measure your company’s commitment to the points raised by Brous from the Publix mission statement? Since being in stock is so important to customer satisfaction, do you know your rates, vs. those of your competition, in key categories? What are you doing about it?  

Corporate culture. Customer satisfaction doesn’t come without happy employees. And happy employees aren’t possible without a good corporate culture.
Observers agree that the Jenkins family has left an indelible footprint on Publix, with a culture that is supportive and upbeat. The company was founded in 1930 by George Jenkins, a tireless, honest worker who believed in serving customers well and who led by example. His leadership spread not only through his family, but the entire organization — right down to the store level.
Gene Hoffman, former president of both Kroger and Supervalu, says that “Jenkins understood that the great difficulty for a retailer is first to win a good reputation; the next to keep it strong while you live; and the next to preserve it after you die. George set deep seeds and they continue to grow very strong today.”  
Cannondale’s Harris would agree. “Publix has had an embarrassment of riches in the excellent quality of leadership it has had through the years. People don’t leave. So today, they have well-seasoned, well-liked good quality managers,” he says.  
Harris, who authors Cannondale’s annual “Power Ranking Survey,” says that employee ownership is also a key factor in the supportive corporate culture at Publix.
The takeaway: Do you lead by example? Do your direct reports dare take risks? How could your corporate culture be improved?

Employee ownership. Okay, with this one, you either have it or you don’t. Publix is lucky enough to have it, and most people see it as a significant advantage.
“You have owners running Publix – people feel a true sense of pride,” says Harris. “They’re well taken care of, and they are friendly to shoppers. This is just one of those things you can’t manufacture.”    
Observers say that Publix, since it doesn’t have to worry about Wall Street breathing down its neck every quarter, is better able to invest for the long haul on infrastructure, remodels and logistics.
The takeaway: Pray you have good investor relations people to handle the securities analysts, who can make or break you based on their financial and marketing acumen — or complete lack of it.  

Vendor relations. Frozen and refrigerated food vendors have long described Publix as firm, fair and consistent. Publix’s Brous says that communication is the key to its success with its vendors.
“We clearly articulate the needs of our customers and engage our suppliers in the process. We have a vendor scorecard in place that clearly defines for our suppliers how well they are meeting the goals. The better the supplier achieves on the scorecard, the more information we are sharing with that supplier as it relates to their business and the success of their brand in our stores.”
Cannondale’s 2007 Power Rankings rate Publix as among the “Best Retailers with Which To Do Business.” It came in behind Wal-Mart, Kroger and Target, but ahead of Safeway, H-E-B, Wegmans, Costco and Meijer.
Cannondale’s Harris says that does not mean that Publix is easy to do business with. He notes that the company has its own particular point of view, and vendors won’t be successful trying to force programs on the company.
“If they don’t like something, they won’t be wishy-washy — they’ll come right out and tell you. People can deal with bad news, but if you don’t know what to expect and you’re left trying to figure things out, you go mad. With Publix, it may not always be pleasant, but you always know where you stand,” he says.
Further, Harris explains, “Publix will deliver for you if you come to an agreement. They’re honorable, and they have the supply chain mechanics to execute on merchandising programs. The buying teams are not just good at procurement — they’re thoughtful and creative, and willing to work on innovative programs. Manufacturers we work with consistently say it takes a long time to figure out how to work within the Publix system, but once you get it down, at least things become more routinized.”  
Says another observer, “Publix is one of the most upfront and honest retailers in the business. They don’t buy products, they sell them! They utilize monies like slotting to promote products, not line their pockets. They scorecard all of their main vendors on supply chain issues (on-time deliveries, orders complete etc.). This has forced vendors to improve their own operations and results in better service for Publix with fewer out-of-stocks, better feature support with inventory, etc.”
No doubt Publix benefits significantly from its membership in an elite share group which includes: Wegmans, Rochester, N.Y.; H-E-B, San Antonio; and Meijer, Grand Rapids, Mich. Not coincidentally, all these regional retailers are privately held.
 Of course you can’t please all of the people all of the time. Some frozen and refrigerated vendors we interviewed say Publix is too slow to jump onto new products, and too conservative in its approach to new merchandising ideas.
“They wait until they see something is definitely going to work somewhere else before they’ll agree to it,” complains one. “They miss that early momentum almost every time.”
But as one frozen food vendor puts it, “They’re the best trading partner I have. Our business continues to grow and flourish since Publix is focused on selling cases and not filling profit buckets.”
The takeaway: Would your vendors describe you as “firm, fair and consistent?” Why or why not? How could you improve communication with vendors? How often do you execute flawlessly on merchandising programs? What gets in the way of this?  

Private label. Publix’s private label program is widely recognized as one of the best. Brous notes that “Within the last four years, our private label product packaging has been enhanced. We removed all the ‘noise’ from the packaging and have found our niche with our consumers — clean, defined packaging meant to engage our customers with clever sayings where appropriate. Our packaging now stands out on the shelves as opposed to blending in. It’s clean, crisp, clever marketing.”
Harris notes that when it revamped its private label program, Publix was seeking a uniform look that was clean, simple and clearly articulated. Today’s white label and black art with the Publix logo “really nails it,” he says. “Some retailers have three or four tiers with different names, without including the name of the store. But Publix puts its name front and center, so that there are hundreds of thousands of little ambassadors for the brand in consumers’ homes. It does what private label is supposed to do: provide a great value at a reasonable price, supported by the retailer.”
The takeaway: What does your private label program say about your stores? Is it consistent across categories and departments? Does the packaging stand out, or blend in? Do the products offer a great value at a reasonable price?  

Innovation and risks. Some say that Publix is risk-averse, but there is evidence to the contrary. When it first crossed the state line and opened a store in Savannah, Ga., in 1991, there were those who predicted a Waterloo. Publix had strong regional divisions in Florida, operating (some said) a little too independently until everything was centralized in Lakeland. And while the chain had proven logistics expertise in its original footprint in Florida, expanding into new turf seemed risky.
Today, of course, nearly 30% of Publix’ 937 stores are in Georgia, South Carolina, Alabama and Tennessee. There’s a distribution center and a dairy plant in Lawrenceville, Ga., and nary a critic in sight.
More recently, Publix has opened two Sabor stores, geared to Hispanics — one in Kissimmee and one in Hialeah. Two additional locations are planned for South Florida. It also has two GreenWise markets (catering to the organic/natural shopper), with another planned for later this year. To help shoppers prepare tasty and healthy meals, it also opened in-store meal solutions centers called “Apron’s.”
 The takeaway: What risks has your company or department taken in the past year? What risks might you take in the year ahead? Is a lack of action your biggest risk? How are you responding to niche markets, and demographic trends?