Publix Supermarket Analysis
Publix supermarket which was commonly known as Publix was founded in the year 1930 by George W. Jenkins (Prescott, Robert & William, 34). This company is workers owned, American Supermarket chain and it is based in Lakeland in Florida. The company operates in different parts of the US, with more than 746 retail stores in Florida. It also has retail food supermarkets in South Carolina, Alabama, Tennessee, Georgia and North Carolina. The headquarters of the company is in Lakeland Florida, and has a task force of 180, 000 people. The company has grown since 1930, with profit margins rising annually. In December 2015, the company recorded a revenue of $32,362.6 million. This was an increase of up to 5.9% from the financial year 2014. Moreover, the profits of operation also increased by 11.5%, with the company recording an operation of $2,678.2 million in the 2015 (Whiteside, Wilson, & Blackburn, 32). In addition, the net profit of the company in the year 2015 increased by 13.2%, which was $1,965 in the year 2015. In the year 2016, the company gained its entry in the Virginia market in a bid to increase its market share (Publix Supermarket Inc, 2). The company therefore signed two store leases in Virginia, with one which is set t open in the year 2017, in Bristol, and the second one which is set to open in the year 2018, in metropolitan Richmond. Publix supermarket decided to increase its market share in Virginia, in order to reduce its concentration in Florida, and to also take the advantage of the low wage in Virginia. Virginia has a high market potential, and the cost of operations is also low, this consequently allows the company to be able to perform better in the area (Kendzior, 52).
Publix focuses of providing the best customer service, and this is basically done through rewarding the employees for better performance (Prescott, Robert & William, 34). Most of the company’s employees as per the year 2015, were very happy since 75% of them received a salary increment. The employees’ salaries were increased because of their performance, which made the company to be able to achieve its goals. The remaining employees’ salaries remained the same, and this is basically because of the mistakes that they had made. Rewarding the employees made a high number of the employees to be happy, thus making them to provide the best customer service as it is required of them by the company. The employees therefore strive to provide the best customer service, in order to be able to receive salary increments. Moreover, the company is also acquiring stores which house its retail shops. This is in a bid to increase the profits that the company realizes, thus making the company to reduce on the costs of operating (Kendzior, 52). On the other hand, the company also closed down nine of its underperforming shops, in order to focus on the performing shops only. Due to the large number of shops that the company owns, this gives it a chance to be able to regulate the sales of the organic foods in the country. Even though Publix faces competition from Wal-Mart, it has reduced the cost of operation, through providing the best customer care services, thus making customers to stick to its products. This has really saved the company a lot of money as it does not need advertise its services, since the customers pass the information to other people through the word of mouth (Publix Supermarket Inc, 3).
Publix is good at providing the best and fresh foods, which makes our customers to eat nontoxic foods. Moreover, groceries and sea foods such as sushi are gotten from the nearest sea and farms respectively, thus reaching our customers when fresh (Prescott, Robert & William, 34). Furthermore, our customer service is also good, since the employees are very friendly and they will always handle the customers with a lot of respect. Publix brands are better than other established brands, and this consequently makes their products to be attracted by many customers (Whiteside, Wilson, & Blackburn, 32). They also sale their products at very affordable prices as opposed to other brands and this consequently makes it easy for the company to be able to beat its competitors in the ever competitive market. Cleanliness s also another priority of Publix, with its stores being very clean thus attracting the attention of the customers. Hygiene comes first in the company thus allowing the customers to eat foods which are prepared under very good hygiene, thus reducing their chances of contacting poor hygienic diseases. The company prepares high quality foods with very unique ingredients which makes the foods to be incredibly delicious thus nobody can resist their foods. The company does not compromise on the quality of the foods and the drugs that they make, it therefore makes sure that its customers are served with the best of the best foods and drugs (Kendzior, 53).
In as much as the company works hard in order to improve the quality of its services, it needs to focus on opening stores in different parts of the country, since most of its stores are concentrated in Florida (Publix Supermarket Inc, 3). This limits the sales of the company when it comes to weather changes or other calamities which might hit Florida (Kendzior, 54). The company therefore needs to broaden its market in different parts of the country instead of concentrating in one region in the US. However, the company’s strategies are very good thus it is very hard for other companies to be able to beat it (Prescott, Robert & William, 36).
Strengths
The company has a very robust assortment of reserved label brands, which allows it to increase revenue and profits. Grocery and food items in the US have gained attractiveness in the few years due to the falling conditions and proper pricing which attracts most customers (Kendzior, 56). This is therefore impacted the company positively, since it is able to receive huge of customers to the increased demands of food and grocery items in the country (Publix Supermarket Inc, 4). Most customers in the country are now opting for private label brands, thus avoiding the expensive brands. This has therefore seen private labels increasing their sales by 2% in the year 2015. Moreover, the share of the brand dollar was 18%, and the unit share became 21% (Whiteside, Wilson, & Blackburn, 32).
Weaknesses
The main weakness of the company is the high concentration of its stores in one region. This consequently exposes the company to vulnerabilities of a single economy. Publix operates a total of 1,114 supermarkets, with 68% of its stores in Florida (Whiteside, Wilson, & Blackburn, 32). This really exposes the company to many problems which include the changes in the by-laws which may lead the company to experience huge losses. Moreover, changes in the weather conditions in Florida might also affect the company thus making it to incur huge losses (Publix Supermarket Inc, 5). On the other hand, its competitors have stores equally distributed in different parts of the country thus making it hard for them to experience pressure from one economy (Kendzior, 56).
Opportunities
Natural and organic food and products are really growing at a very fast rate in the food and beverage industries. The demand for organic foods is very high, due to the preference of foods rich in nutrients by the consumers. In the year 2014, the food market of organic foods grew by 11% reaching a value of $35,891.9 million (Publix Supermarket Inc, 6). Organic food preference is however project to reach a value of $1,119. Million, which will be an increase of 70.3% as from the year 2014. This will therefore be a good opportunity for the company to be able to invest in organic foods due to the ever rising increase in the demand of organic foods (Whiteside, Wilson, & Blackburn, 32).
Threats
The high rate of wage in Florida is one of the main threats facing Publix. This therefore makes the company to incur huge costs of labour while operating in Florida (Kendzior, 56). The minimum wage rate in the US, which has been constant since the year 1998 at $5.15 per hour, rose to $5.85 in the year 2008. In the year 2009, the minimum wage also increased to $6.55 per hour and in the year 2010, it increased to $7.25 per hour (Whiteside, Wilson, & Blackburn, 32). This has therefore seen some areas in Florida experiencing higher wage growth rates as opposed to the federal’s minimum wage rate. In most areas where Publix, operates, the wage rates have really gone up, thus putting the company at the risk of experiencing low returns on investments or otherwise incurring losses (Publix Supermarket Inc, 7).
I am very optimistic about the future of the company because of the measures that they have put in place in order to control their returns.
Work Cited
Publix Supermarket Inc.: A Progressive Media Digital Business, 2016. Print.
Whiteside, R M, A Wilson, and S Blackburn. Major Companies of the Usa 1988/89. , 1988. Internet resource.
Kendzior, Russell J. Falls Aren't Funny: America's Multi-Billion-Dollar Slip-and-Fall Crisis. Lanham, Md: Government Institutes, 2010. Internet resource.
Prescott, Robert K, and William J. Rothwell. Encyclopedia of Human Resource Management, Key Topics and Issues. Hoboken: John Wiley & Sons, 2012. Internet resource.
