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Publix rolling with service advantage

BY Mike Troy

A weak job market and enduring housing challenges in Florida weren’t enough to derail the onward march of Publix last year as the state’s leading supermarket chain expanded its total store count, grew same-store sales and ended the year with record results. 


The company’s formula for success remains the now familiar combination of stellar customer service and top-notch store operations. And with these retail fundamentals forming the core of its value proposition, Publix doesn’t have to concern itself with being the lowest-priced operator in the market, as its core shoppers are willing to pay a little more for a superior store experience and old-school service where employees bag groceries and carry purchases to customers’ cars.


Publix remains a case study that customer service still matters and pharmacy plays a key role in meeting that customer expectation. Publix ended last year with a total of 841 pharmacies and a steady stream of recognition. The company earned the distinction of being the highest ranking supermarket in terms of customer service — for the 17th consecutive year — by the American Customer Satisfaction Index, a partnership between the University of Michigan Business School, American Society for Quality and CFI Group consulting firm.


“Offering premier customer service is strategic to all of us. It’s what sets us apart from our competition,” Publix president Todd Jones said.


Happy employees are more likely to take better care of customers, and by all indications, Publix is a good place to work. The company is 1-of-13 charter members of Fortune magazine’s “100 Best Companies to Work For” list, having made the cut since the list’s inception in 1998.


Look for more of the same from the company this year as the company expected to open 26 new stores, and with some cooperation from Florida’s economy, it could be looking at an even better financial performance.

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Could 2011 be different?

BY Michael Johnsen

NEW YORK — Within the next three months, a gallon of gas is expected to exceed $4.11, which previously marked the highest historical U.S. retail price set in July 2008. Prior to that, the highest that gas prices had ever been was $3.46 in March 1981. 


But experts believe the Summer Gas Crisis of 2011 will look a lot different than the Summer Gas Crisis of 2008. For one thing, retailers were much more receptive to supplier price increases in 2008 than they are today, said Todd Hale, SVP consumer shopper insights for the Nielsen Group. “[But there have been] a lot of efforts made by retailers over the last couple [of] years during this recession to cut costs [and] lower prices to make them look more value-oriented to their shoppers. It’s a little difficult for them to go back on that.” That suggests higher prices will be passed along almost wholesale to the consumer, a factor that further could curtail spending, as wages remain relatively flat. 


There’s also the impact of the recession to consider. Households generating more than $100,000 in annual income are faring much better today than they were in 2008. “The gas situation in 2008 carried further just because of what happened to our economy — people who had money stopped making trips,” Hale said. “Now we’ve got people who are feeling a lot more comfortable and confident about the economy.” 


As many as 45% of households earning $100,000 or more said their confidence in the economy has improved over the past six months, compared with 24% among those earning less than $100,000, according to a recent Deloitte survey. 


On the plus side, consumers may be better prepared to weather short-term price fluctuations at the pump today than they were in 2008. “Their short-term consumer debt has fallen,” said Gerald Hanweck, professor of finance at the George Mason University School of Management. “Consumers, in terms of their unsecured debt, are in much better shape than they were in 2008.” 


However, secured debt, such as mortgages, still represents an impediment to consumer spending, so extended gas price increases would have a detrimental effect. Should higher gas price increases extend beyond the summer, that could have a major impact on consumer spending heading into the holidays, Hanweck said. 


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Walgreens getting a charge out of electric fill-up

BY Michael Johnsen

DEERFIELD, Ill. — As the nation braces for higher gas prices this summer, Walgreens is exploring alternatives that may have longer-term potential and could serve as a differentiator among green consumers. As of April, Walgreens had announced three markets in which it had opened electric charging stations in its store parking lots. 


Unlike gas stations where consumers can simply pump and go, charging stations can take anywhere from 10 minutes to a half hour, which creates more time to capture more purchases. 


Working with 350Green in the Chicago market, Walgreens plans to install charging stations at about 30 area stores beginning this summer. In the Dallas and Houston markets, Walgreens is working with NRG Energy to install high-powered rapid charging eVgo Freedom Stations at 18 locations across the Dallas/Fort Worth Metroplex and 18 locations in Houston. By the end of 2012, NRG plans to install a total of approximately 70 charging stations in the Dallas/Fort Worth Metroplex and another 50 in the Houston area. Additionally, NRG plans to electrify the Interstate 45 corridor that connects the two cities.

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