Here's how Publix could fall prey to Walmart, Amazon
and Kroger in 2016
Jan 5, 2016, 7:15am
EST
Ashley Gurbal
KritzerReporterTampa Bay Business Journal
Publix Super Markets Inc. is poised to
capitalize on most of the top grocery trends of 2016 — but there's one key area
where it could find itself playing catch-up to some of its toughest
competitors.
Grocery
analyst John Karolefski, Cleveland-based publisher of
GroceryStories.com, has revealed his top industry trends for the year.
Expect to see more entertaining in stores — think wine tastings, cooking
demonstrations and food samples — along with more cafes where customers can eat
in the stores.
Publix Super Markets
Inc.'s GreenWise store in South Tampa
NOLA
LALEYE
Publix
already uses its Aprons brand — which encompasses its cooking schools, Simple
Meals program, recipe development and event planning services — as a way to
engage customers, especially millennials,
in some of its stores. Seventy of its more than 1,100 stores have specialty cheese shops,
where customers can sample cheese and learn the stories behind each variety.
But
online shopping and digital engagement will be huge in 2016, Karolefski said —
and that's where Publix may lag some of its competitors."The two big
elephants in the room are Amazon and Walmart, both of whom are
testing online grocery shopping," Karolefski said in a phone interview
Monday. "Both have the resources, infrastructure and the national
footprint to dominate online grocery shopping if they want to. Should they do
that, it will threaten every grocer in the country, and all of them are going
to test online grocery shopping."
Amazon.com
(NASDAQ: AMZN) and Walmart Stores Inc. (NYSE: WMT) are
particularly big potential threats to Publix in its hometown of Central
Florida. Amazon has two 1 million-square-foot warehouses here, in Lakeland and
Ruskin. After Publix, Walmart controls the majority of grocery market share in
Central Florida. It also has a grocery distribution center in Winter Haven and
is under construction on a 2 million-square-foot e-commerce fulfillment center
in Winter Haven.
In
October, Walmart rolled out online grocery ordering at
a select number of stores in Tampa.
Publix
was a pioneer of online grocery shopping, testing the concept in the late
1990s. While it failed to be as profitable as
the company would have liked, Publix President Todd Jones has said the idea is " always looking" at
the service.
The Lakeland-based grocer in recent years has rolled out some online ordering options for
bakery cakes and deli items. It's also offered digital coupons for years.
But one
of its biggest competitors,
Cincinnati-based Kroger Co. (NYSE: KR), is going well
beyond online ordering in some of its stores. Kroger is one of Publix's biggest
competitors, in metro Atlanta and the Carolinas.
Kroger has a service called
Scan Bag Go, in which customers use a handheld device to scan their items as they
shop. The device tallies up the customer's total, instead of having a cashier
scan each item. Launched in a handful of stores in 2011, Kroger expanded Scan
Bag Go in greater Cincinnati in November 2015.
While
Publix tops several
consumer survey reports nationwide, Karolefski said, 2016 may be the year it
puts more of an emphasis on technology.
"If
its competitors get big on this and it gains favor with consumers, they may
have to," he said.
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