Publix Super Markets is a publicly-traded supermarket operator that has dominated the Florida market for decades. With annual revenues of over $27 billion and almost 800 stores in the state, Publix and Florida are almost synonomous. The business was built on their famous slogan, "Where Shopping is a Pleasure", and the company genuinely operated to make the slogan a reality for many years.
To support the strategy Publix used an advertising campaign that focused on family, traditional values and holidays. Rather than show stores or food aisles, Publix showed happy families sitting around holiday tables enjoying each other's company over food. The best traditional values advertising I have ever seen (outside of U.S. military ads).
Recently Publix changed their strategy and advertising to focus on price. This change was in response to the increasing presence of Walmart in Florida and a re-invigorated Winn-Dixie (owned by private equity firm Lone Star Funds) who promotes price savings.
Publix is making a mistake!! I have competed twice with Walmart, in Mexico and Indonesia. Both times the companies succeeded and grew. Both times we ignored Walmart's pricing message and focused on promoting merchandise where we were strong and Walmart was weak. In Mexico we promoted all the Mexican meats, chorizos and salchichas. In Indonesia we promoted fashionable clothing. Both of these strategies are similar to the successful strategy of Target. Never compete where Walmart wants to compete-price-but rather compete where you are stronger.
Three easy to use lessons about strategy:
- Pick the part of the market you want to dominate rather than fighting with the entrenched competition (Napoleon)
- Execute a strategy that plays to your special strengths and expertise
- Bring sufficient resources to succeed
In preparing this post I visited Publix website (pictured below), which may be the single worst website I have seen in years.
I also went to You Tube to see whether the new Publix TV ads were posted there. Much to my surprise no new TV ads and none of the holiday, family values ads were posted. Maybe Publix thinks their market segment does not use the Internet?
Maybe Publix does not think in terms of market segment but rather thinks they serve everyone. Such a strategy may have succeeded in homogeneous 1960s Florida but not today. If I were Publix I would move upmarket in my positioning to serve the better customers and those that aspire to such a lifestyle. I would remodel the stores to match this positioning. The better part of the market is underserved today in Florida with perhaps only Whole Foods operating multiple stores.
Sad to see an icon of Florida making such mistakes.