For many industry observers, it was a sign of how tough the economy really was that Publix Super Markets  was among its victims.
The Lakeland, Fla.-based retailer had become something of a powerhouse over the previous two decades, behind a fast-growing store base, increasing market shares, leadership in formats and strategies, and fanatical devotion of its customers. But with the sudden downturn in the economy in 2008 — a recession whose impact was felt in Florida as much as anywhere in the U.S. — even Publix was showing negative comps.
In 2009, comparable-store sales were down 3.2% overall. The company attributed the figure to economic weakness, deflation and from sales cannibalization due to new store openings.
“That’s pretty rare for them,” noted Neil Stern, senior partner at McMillan Doolittle, Chicago. “You have to go back a fairly long way since you’d seen those kinds of numbers at Publix. “
For Ed Crenshaw, Publix’s chief executive officer, the sales trend challenged Publix to step up its emphasis on value, without sacrificing its reputation for service. Its most recently released first quarter 2010 results — including a 0.9% comp increase — illustrates that results have begun to improve.
“I think what you’ve seen at Publix is them responding very aggressively to the economy,” Stern said. “They’ve stepped up their promotional efforts, and they’ve stepped up what they’re doing from a pricing standpoint. They have righted the ship, not that it was off course. But they’ve made some corrections to make sure they’d continue to be a competitive force.”
Burt P. Flickinger III, managing director at Strategic Resource Group, New York, said Crenshaw’s mix of experience gathered as he climbed the ladder at Publix have made a difference.
“He’s run manufacturing for Publix; he knows the operational side and the buying and merchandising side. He’s terrific on the financial side and in real estate development and terrific on capitalizing on the competition.”
Crenshaw, for example, helped Publix make strong gains in share in markets like Jacksonville, Fla., and Montgomery, Ala., while a competitor in both markets, Winn-Dixie Stores, was undercapitalized, Flickinger said. The acquisition of 50 Albertsons stores in Florida is paying off as Publix improves its market share and facilities as a result, he added.
“They remodeled every store wall-to-wall to Publix’s high standards,” Flickinger said. “Investment like that will have Publix continue to be the king of food-and-drug superstores in the South.”