Publix Super Markets Inc.

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Publix Super Markets Inc.

1936 George Jenkins Blvd.
Lakeland, Florida 33801
U.S.A.
(813) 688-1188
Fax: (813) 680-5257

Private Company
Incorporated: 1930
Employees: 72,000
Sales: $6.2 billion
SICs: 5411 Grocery Stores

Publix Super Markets Inc. stands as one of the top eight chains of supermarkets in the United States by sales volume with more than 400 stores. Publix limited its sales to Florida until the 1990s, but is now moving into Georgia. For years the signs on the front of Publix have read, “Where shopping is a pleasure,” reflecting the firm’s early belief in the importance of customer satisfaction.

Publix was founded in 1930 by George W. Jenkins, the son of a rural Georgia grocer. Jenkins moved to Winter Haven, Florida, in 1927 and took a job as a stock clerk at the local Piggly Wiggly. He became the store’s manager six weeks later at the age of 17. At the age of 20 he borrowed $2,000 and started his own 27-by-65-foot store across the street, with five employees. The store earned $500 its first year, in the midst of the Great Depression.

Jenkins was a natural manager and carefully observed how to best sell grocery store items. He was one of the first in the grocery business to stress courteous, friendly employees, high-quality goods and excellent service, while most of his competitors were focusing on price and productivity. He also treated his employees well, promoting almost entirely from within, and giving them a large amount of control over their section of a store. Most store managers throughout the chain’s history started as baggers.

Jenkins was so successful that he had opened 18 more Publix stores by 1940, including some acquired with the purchase of the small All-American chain in 1939. In 1940 Jenkins opened his first supermarket, an 11,000 square foot space with a paved .parking lot, air conditioning, wide aisles, electric doors, and frozen-food cases. Though large food stores had been opened during the Depression, they were generally stark and ill-equipped. The aesthetics and features of Jenkins super stores were unique for American grocery stores and reflected his belief that shopping should be an enjoyable experience. By 1950, 22 of these supermarkets had been opened, with total sales of $12.1 million.

In 1949 Publix began its own one-person advertising department headed by R. William Schroter. Schroter soon began using local free-lancers who eventually grew into the W. M. Zemp & Associates advertising firm in St. Petersburg. The company advertised heavily in newspapers but avoided the weekly circulars used by many supermarkets.

In the early 1950s Publix began using S&H Green Stamps, a stamp program that gave shoppers a certain number of stamps per dollar spent and then enabled them to use completed stamp books to get discount merchandise. Publix decided that a 14 percent increase in sales would pay for the cost of the stamp program and found that the resulting sales increase easily exceeded that level. Publix quickly became the largest vendor of the stamps in the United States. Jenkins liked the stamps because he believed that they encouraged store loyalty, as well as the thrifty habits he grew up with. In the late 1950s Publix began selling stock to employees, eventually becoming 98 percent employee-owned.

Publix’s success in less developed parts of Florida encouraged Jenkins to move into the lucrative, but highly competitive, Miami market. The first Publix in Miami opened in 1959. The Publix formula proved as successful in Miami as it had in other parts of Florida, and in 1963 the firm opened a warehouse to service the growing number of supermarkets it was opening there. The state of Florida itself contributed to the chain’s expansion as it became one of the fastest-growing states in the United States. Fed partly by its move to Miami, Publix had grown to 114 stores by 1965, with sales of $262.9 million, and 157 stores, with sales of $465.7 million in 1970. The chain was expanding into new areas of Florida as well. In 1974 the firm opened a 200,000-square-foot warehouse in Jacksonville to supply Publix stores between Jacksonville and Tallahassee.

Publix management kept a careful eye on lifestyle trends. As more women began to work and more people remained single, stores were adjusted accordingly. One of the biggest changes came in 1966 when Publix stores moved from one small frozen-food display case to large, upright cases with glass doors. As frozen-food sales continued to grow, Publix added more freezers in and devoted more attention to how they were stocked, keeping brand name products together rather than sorting by food type. Frozen foods were updated regularly, and the firm spotted food trends such as yogurt and frozen pizza earlier than most of its rivals.

In setting up shelves, dairy cases, and freezers, the firm was careful to keep ease of shopping its top priority, but the company also kept high-margin items at eye level and made certain that items were arranged in a way that made it easy to restock quickly.

In the early 1970s, with a wave of discount stores taking hold in Florida, Publix opened its own discount chain. Publix opened 24 of them, called Food World, in ten years. In 1976 Publix introduced in-store photo-finishing, giving away a roll of film or an extra set of prints with each roll it developed. Within ten years the firm accounted for 12 percent of the total photo-finishing business in its marketing area.

In 1979 the company had reached nearly $2 billion in sales and had 234 stores and 26,000 employees. It was the eleventh-largest chain in national sales and had an after-tax net averaging 1.7 percent, far ahead of most of its rivals. Publix was the leading grocery chain in Daytona Beach, Palm Beach, and St. Petersburg, where it had 30.6 percent of the market. It was the second-largest chain in the Miami area, with 26 percent of the market. All Publix stores were similar inside and had in-store delis and bakeries. Publix supermarkets also took advantage of technology, using the second-largest number of price scanners in the United States.

Publix’s skilled marketing and use of up-to-date technology had contributed to its success, but so had the stability of its work force. The firm had never experienced a strike, lockout or layoff, and had no union members in its work force. It also had the lowest employee turnover of any large chain. This was attributed to employment policies that included a profit-sharing plan that distributed 20 percent of net profits at each store to that store’s full-time workers, a retirement plan funded by 15 percent of pre-tax profits, and the policy of heavily promoting from within the company. Employees were also given more responsibility than at most large chains. Publix was named as one of the top ten companies to work for in America by the 1993 edition of The 100 Best Companies to Work for in America.

Publix still limited its operations to Florida, but by 1980 it had a strong presence throughout the state, with the exception of the panhandle. Its operations were divided into three divisions: the Jacksonville division, which covered the northern third of the state; the Miami division, which covered the eastern coast south of Brevard County; and the Lakeland division, which covered the rest of the state. The company headquarters were located in Lakeland, where a 425,000-square-foot grocery warehouse stored a three-week supply of goods.

Publix spent about 0.75 percent of sales on advertising, amounting to about $15 million in 1980. Newspapers accounted for 68 percent of the advertising budget, television 24 percent, and radio five percent. The company had formerly used even less radio, but was increasingly turning to it to reach younger Floridians. Once at the stores, customers found theatrical merchandising displays that changed weekly. The displays were worked out by the employees of each store and at various times included a mannequin sitting in an old-fashioned bathtub, fountains, papier-mache volcanoes, model trains, and real cars. The displays were done without direction from the Publix central office since Jenkins believed that store managers best knew what would work in their own territory.

The 1980s brought considerable change to Publix. One of the first changes was automatic teller machines, which Publix began installing before many banks did. The firm was also the first supermarket chain to install bar-code scanners in every store. Jenkins had always refused to open his stores on Sunday, but in 1982, losing market share to stores that did open on Sunday, he relented. In 1985 all but three of the discount Food Worlds were closed. With workers getting a percentage of their store’s profits, a discount store lacked internal support. Sales for 1985 reached $3.2 billion, up from $2.8 billion in 1983, and Publix was the ninth-largest grocery chain by sales.

The 1980s also brought a change of management at Publix. In 1984 Joe Blanton, who had been president for ten years, died, and was replaced by Mark Hollis. Hollis represented a new generation of management at Publix.

Superstores, with 30,000 square feet or more, were another 1980s innovation. After its competitors successfully began opening them, Publix began opening its own superstores, with up to 39,000 square feet each. While industry analysts praised Publix’s early use of new technologies, some criticized the firm for lagging behind its competitors in opening large stores that offered more services. Most Publixes were located in shopping malls where customers could also shop for goods other than food. By the beginning of the 1980s, however, consumers were moving towards single stores where they could buy most things they needed. Publix’s competitors opened combination stores where customers could fill prescriptions in addition to buying groceries. In 1986 Publix followed, opening its first combination store in Orlando. The 55,000-square-foot, upscale space combined a grocery store with gourmet food and deli and bakery sections, with hardware, toys, and the firm’s first pharmacy. The combination stores included a one-hour photo department, a counter where cameras and small electronics were sold, and an expanded cosmetics, health, and beauty aids section. The stores were intended to appeal to younger, professional, two-income families, and their sites had been carefully selected with an eye on demographics. Publix quickly opened two more Publix Food & Pharmacy stores in Tampa, one in Tamarac, near Fort Lauderdale, and three more in other parts of Florida. The firm also remodeled and expanded old supermarkets and opened new ones. Publix opened 28 stores in 1986 and more than 30 in 1987, often choosing sites where Florida’s population had not yet exploded but was expected to.

To help support these new stores, Publix doubled the size of the Lakeland warehouse to 440,000 square feet, and planned a 660,000-square-foot perishables warehouse near Fort Lauderdale. To increase flexibility in merchandizing and marketing, Publix dropped S&H Green Stamps in the Lakeland and Jacksonville divisions in June 1987. In 1989 Publix again tried a new technology when it began moving toward automatic checkout machines. The machines allowed customers to scan their own groceries, and then pay a central cashier.

In January of 1990, after suffering a stroke, George Jenkins retired as chairman and chief executive and became chairman emeritus. He was succeeded by his son, Howard M. Jenkins, who was 38 years old. The younger Jenkins had begun at the retail level and worked his way up to management.

At the time of the leadership change, Publix had 370 stores, 60,000 employees, and profits of $128.5 million on sales of $5.386 billion. It was the 21st-largest retailer in the United States, behind Walgreen and McDonald’s. Publix did not have concrete plans for a store outside of Florida however, until late in 1990, when it announced plans to build a 48,000-square-foot store in Kingsland, Georgia, about 80 miles south of Savannah.

Plans for a second store in a Savannah shopping mall were soon announced. In August of 1991, with 384 Publix stores in existence, the firm announced that it was looking for sites in Atlanta. Some industry observers felt that the firm would have a hard time finding desirable locations due to its late entry into the Atlanta market, though others were more optimistic. Publix was expected to encounter stiff competition from the Kroger chain, which also stressed customer service. It also faced the problem of securing supplies, with the nearest Publix distribution site being six hours away in Jacksonville. But with its years of experience—and constant flow of cash from its hundreds of existing stores—some analysts believed Publix would succeed in Georgia as it had in Florida.