Publix Super Markets, Inc.

founded: 1930

Contact Information:

headquarters: 1936 george jenkins blvd.
lakeland, fl 33815 phone: (863)688-1188 fax: (863)284-5532 url: http://www.publix.com

OVERVIEW

With 534 stores in Florida, Publix is the state's largest grocery store chain. Publix also operates 127 stores in Georgia, 23 stores in South Carolina, and 4 stores in Alabama. Operations, most of which are located in Florida, also include eight distribution centers, three dairy processing plants, a deli processing plant, and a bakery. Publix is one of the largest employee-owned companies in the United States and the largest private company in Florida.

COMPANY FINANCES

After more than ten years of consecutive growth, sales for Publix reached $15.3 billion in 2001. Earnings for Publix also grew consistently throughout the 1990s, reaching $530.4 million in 2000 and remaining the same in 2001. The firm's profit margin climbed to a record 3.6 percent in 2000. Publix stock, which is sold only to Publix employees and directors, hovered around a price of $41.00 per share in the early 2000s.

ANALYSTS' OPINIONS

Florida Monthly magazine rated Publix "The Best Grocery Store" in 2001. The firm also ranked number one on a national customer satisfaction survey completed by the University of Michigan Business School and the American Society for Quality Control in 2002. That year,Fortune magazine named Publix on its "List of Most Admired Companies."

HISTORY

Publix was founded in 1930 when 22-year-old George W. Jenkins left his position as manager of a Piggly Wiggly store and opened his own small grocery store in Winter Haven, Florida. With five employees, the store made roughly $500.00 during its first year of operation. Jenkins added a second Publix store in 1935. Five years later, he replaced his two smaller stores with a larger Publix Market. In an effort to expand, Jenkins purchased a 19-unit grocery store chain from a Lakeland businessman looking to retire in the mid-1940s. After relocating headquarters to Lakeland, the company constructed a 70,000-square-foot store there in 1950.

In an effort to attract more customers, Publix put in place an S & H Green Stamp collection program, allowing shoppers to trade completed stamp books for discounts. Expansion continued in the late 1950s with the purchase of seven stores near Miami and surrounding areas. The firm also began selling its stock to employees. By the decade's end, Publix was operating 62 grocery stores in 32 of Florida's cities. To serve stores located in southeastern Florida, Publix established a southeast division headquarters unit and distribution center in Miami. Sales reached $500 million in 1970.

During the early 1970s, Publix established a bakery plant and produce distribution center in Lakeland. In addition, another distribution center and division headquarters office opened in Jacksonville. Sales reached $1 billion in 1974. By then, stores in operation had reached nearly 200. Publix added a dairy processing plant to its Lakeland facilities in 1980. Sales grew to $2 billion in 1982. Four years later, Publix opened a joint grocery store and pharmacy in Orlando. Along with constructing a dairy processing plant in Deerfield Beach, Publix also opened 30 new stores in 1988. George Jenkins handed managerial control of Publix to his son Howard in 1989.

Publix stores began to take on a new look in the 1990s. In 1991, the firm unveiled its first 65,000-square-foot store. Publix also expanded into Georgia for the first time with a 65,000-square-foot store in Savannah. Sales in 1992 exceeded $6 billion. Publix was named one of the top ten companies in Fortune's 100 Best Companies to Work for in America in 1993. By then, the firm had established itself as one of the top ten supermarket chains in the United States. Expansion into Georgia continued in the early 1990s, and Publix moved into South Carolina as well.

FAST FACTS: About Publix Super Markets, Inc.

Ownership: Publix Super Markets, Inc. is a private company. Employees, both current and former, own 85.5 percent of the firm, while executives and directors own the remaining 14.5 percent.

Officers: Howard M. Jenkins, Chmn., 50, 2001 base salary $373,750; Hoyt R. Barnett, VChmn., 57, 2001 base salary $279,625; Charles H. Jenkins, Jr., CEO and COO, 58, 2001 base salary $356,800; W. Edwin Crenshaw, Pres., 50, 2001 base salary $337,900; David P. Phillips, CFO, 41

Employees: 122,000

Principal Subsidiary Companies: Publix Super Markets operates roughly 700 grocery stores in the southeastern United States.

Chief Competitors Competitors to Publix include Winn-Dixie, Albertson's, Kroger, and other grocery store chains, as well as retailing giants like Wal-Mart.

In 1995, a CBS program called American Journal alleged that Publix beef included sheep meat. Publix refuted the charges. In 1996, the firm moved into Alabama for the first time. Also that year, 12 women suing Publix for sexual discrimination in its hiring, promotion, and salary determination practices were granted class action status. Rather than go to trial, Publix agreed to an $85 million settlement in 1998. The firm also paid $3.5 million to settle a racial discrimination charge. The firm's legal woes continued in 1999 when it became the target of a class action racial discrimination lawsuit. That case was settled for $10.5 million in 2000.

Despite these problems, growth continued. Publix acquired nine stores in Atlanta from the A&P supermarket chain in 1999. By then, the firm was not only the sixth largest U.S. grocery store chain, it had also become the nation's tenth largest food company. Charles Jenkins succeeded his cousin, Howard Jenkins, as CEO in 2001.

STRATEGY

The success of Publix is due at least in part to its strategy of offering innovative services to its customers. For example, the first Publix Market, constructed in 1940, offered Florida grocery shoppers air conditioning for the first time. In the 1970s, Publix became the first grocery store chain in Florida to use bar code scanning technology to speed the checkout process. The firm also began offering ATM machines before Florida banks did. In 1988, Publix put in place an automated checkout system for customers who wanted to scan their own groceries. While other grocery store chains focused on offering the lowest prices, Publix differentiated itself by promoting these and other services as well as a friendly staff.

Historically, the firm had limited its growth efforts to Florida. That strategy changed in the 1990s, however, when Howard Jenkins succeeded his father as CEO. Publix moved into Savannah, Georgia, in the early 1990s and the firm's expansion efforts in Georgia intensified throughout the 1990s. By 1998, the company operated 70 stores near Atlanta, holding roughly 22 percent of the grocery market there. According to Florida Trends writer John Finotti, although this aggressive expansion strategy did boost sales, it also caused some problems. "Building that base in such a short period of time has been taxing . . . For one, marketing costs have climbed as Publix introduced itself to Atlanta shoppers. In addition, Publix has struggled to replicate its culture of friendly store employees and customer service as the expansion stretched the ranks of experienced managers thinner and thinner." Despite these difficulties, Publix maintained its expansion strategy with plans to open 300 new stores by 2006.

CURRENT TRENDS

In the late 1990s, some analysts predicted that online grocery stores like Webvan and Peapod would pose a serious threat to traditional grocery store chains like Publix. Although that threat failed to materialize, Publix decided to launch its own online grocery service in September of 2001. The firm had seen a drop in sales in Atlanta after Webvan opened there. When Webvan went bankrupt, Publix decided that although the immediate threat was gone, the trend of online shopping was likely to continue, particularly as high-speed Internet connections became less expensive and more commonplace and as people continued to look for ways to save time. Rather than wait for another competitor to launch such a service, the firm developed its own Internet-based operation. Known as PublixDirect, the new unit operated a fleet of 38 trucks and made roughly 2,500 deliveries per week in January of 2002.

PRODUCTS

Along with traditional groceries, Publix stores sell flowers, baked goods, dairy products, ethnic foods, heath and beauty care products, housewares, meats, produce, and seafood. Services include photo processing and banking. Some stores also include pharmacies.

PUBLIX MARKET SETS ITSELF APART

At the age of 32, George Jenkins decided to close his two small Publix grocery stores and build a larger supermarket. The Publix Market, which opened its doors in 1940, was the first supermarket in Florida to offer air conditioning. The store also attracted attention with its electronic doors, florescent lights, pastel colors, and music.

CHRONOLOGY: Key Dates for Publix Super Markets, Inc.

1930:

George Jenkins opens a grocery store named Publix

1940:

Jenkins opens the first Publix Market

1964:

Publix opens its one-hundredth store

1991:

Expanding outside Florida for the first time, Publix opens a store in Georgia

2001:

Publix launches PublixDirect, an online grocery store service

CORPORATE CITIZENSHIP

Each year, Publix supports the Special Olympics, March of Dimes, Children's Miracle Network, United Way, and Food Industry Crusade Against Hunger. In 2001, the firm donated $2.1 million to the March of Dimes. It also raised $600,000 for Children's Miracle Network; $651,000 for the Special Olympics; $14.5 million for United Way; and $900,000 for Food Industry Crusade Against Hunger. Publix also makes cash and non-cash donations to a variety of local charities.

SOURCES OF INFORMATION

Bibliography

gibbs, lisa. "virtual paper or virtual plastic." florida trend, march 2002.

finotti, john. "publix's battle for atlanta." florida trend, march 1999.

"publix announces annual results." business wire, 1 march 2002.

publix super markets, inc. home page, 2002. available at http://www.publix.com.

"publix super markets, inc." notable corporate chronologies. farmington hills: gale research, 1999.

For an annual report:

write: publix super markets, corporate office, attention consumer relations, po box 407, lakeland, fl 33802-0407 or call: (800) 242-1227

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. publix super market's primary sics are:

2013 sausages and other prepared meat products

2051 bread and other bakery products

5411 grocery stores

also investigate companies by their north american industry classification system codes, also known as naics codes. publix super markets' primary naics codes are:

311812 commercial bakeries

312111 soft drink manufacturing

445110 supermarkets and other grocery (except convenience)