Look out, Publix: Here comes Wegmans

Jan 20, 2016, 12:43pm EST

Ashley Gurbal Kritzer ReporterTampa Bay Business Journal

Publix Super Markets Inc. will soon have a new direct competitor with a cult following as big, if not bigger, than its own.

Wegmans Foods Markets Inc. has confirmed its first store in North Carolina — an area that's a top priority for Lakeland-based Publix.

The beer store at Wegmans features its own check-out section.

"We have a huge concentration on getting a new market established" in North Carolina, Publix President Todd Jones previously told the Tampa Bay Business Journal.

Rochester, New York-based Wegmans is one of the most beloved grocers in the U.S., despite having fewer than 100 stores in a six-state footprint. Publix has more than 1,100 stores in eight states, and as it expands, so does its workforce in Lakeland, to support the new retail sites.

If Wegmans' store in Cary, North Carolina, comes to fruition — it is in the planning stages — it will be the first time Publix and Wegmans have stores in the same city.

"We welcome competition. It makes us better and the customer always wins," a Publix spokesman wrote in an email Tuesday.

A Wegmans spokeswoman declined comment.

While Wegmans is a formidable competitor in the grocery world, there are some key differences between its stores and Publix locations. Wegmans builds much larger stores — 75,000 to 140,000 square feet — while the largest Publix stores are around 60,000 square feet.

Wegmans also tends to place its stores farther apart than Publix does.

While Wegmans may never have the same number of stores as Publix, it's considered an industry trendsetter, which may draw in the more affluent customer base Publix has been working to win from specialty grocers like Whole Foods Market Inc. (NASDAQ: WFM).

Publix has added upscale touches and specialty foods to its stores in recent years, but Wegmans is known for its prepared foods section and cafes within the stores. In 2015, Wegmans started opening sit-down restaurants in some of its stores in New York.

The competition between the two — and race to be first with food and grocery trends — could ultimately boost the rest of their stores, an analyst said.

Phil Lempert, an industry analyst and owner of SuperMarketGuru.com, said the competition between Publix and Wegmans will be "the most exciting supermarket wars."

Both Publix and Wegmans, Lempert wrote, "will be playing their best hands as they move into a market that has attracted the food-obsessed millennial generation who have a passion for quality, unique tastes and never want to eat the same food twice in their lifetimes."

"I expect both chains to really expand their prepared foods and 'grocerant'offerings," Lempert wrote in an email Wednesday, "and take these learnings and successes to their other stores to attract this powerful food generation."

Lempert said he also expects both chains to rely heavily on social media to attract millennial foodies.

Faltering grocers — Food Lion, Bi-Lo, Lowes Foods — were probably alluring to both Publix and Wegmans when they decided to enter the North Carolina market, said David J. Livingston, a Wisconsin-based analyst and principal of DJL Research.

Wal-Mart Stores Inc. (NYSE: WMT), too, is grappling with its grocery business, making it a target for stores like Publix, Wegmans and Kroger Co. (NYSE: KR). Kroger is also heavily focused on the Carolinas after acquiring Harris Teeter.

"Walmart is starting to stumble a little bit," Livingston said, "and we’re starting to consider Walmart the next generation as the low hanging fruit that you might be able to get some business from."