Walmart and publix fight for shoppers’ grocery dollars gas city indiana restaurants

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I t hardly seems like a fair fight. • Walmart, the world’s largest retailer, with 10,130 stores in 27 countries, vs. Publix, a regional grocery chain, with 1,053 stores in five states. • Yet here they are, duking it out for a bigger piece of the grocery market pie. Win, lose or draw depends on factors big and small, from the economy to the freshness of ground beef. • Ultimately, industry observers say, both may emerge victors, leaving smaller chains like Sweetbay and Winn-Dixie to fight for the scraps. • Walmart upped the smack talk in a recent ad campaign that challenges Publix customers to compare prices at Walmart. Buy identical items at both stores and, according to the ads, you’ll pay about 15 percent less.

That sounds about right to Lizzie Johnson, 67, who shops regularly at Walmart and occasionally at Publix. "I save a lot here,” she said while leaving Walmart’s Neighborhood Market on Kennedy Boulevard in Tampa. "Exactly how much I don’t know, but I like to come here for the meats, fruits, drinks and ice cream.”

The battle began when Walmart opened its first Supercenter in 1988, selling tomatoes and tea bags alongside T-shirts and bath towels. Over the years, the combat has intensified as Walmart opened new stores and concepts and bargain hunters flocked to the unbeatable prices.

"Walmart has been extremely aggressive and successful. It turns out shoppers like to buy everything under one roof,” said Jeff Humphreys, director of economic forecasting at the University of Georgia’s Terry College of Business, which tracks the buying power of ethnic groups.

Founded in 1962 by Sam Walton as a discount store for clothing and household goods, Walmart sits second on the Fortune 500 list, below only Exxon Mobil. It rang up $447 billion in revenue last fiscal year but saw profits dip to $15.7 billion, thanks largely to deep price cuts brought on by continued weak consumer confidence.

Today, Walmart has 26 percent of Tampa Bay’s grocery share, up from single digits several years ago, according to the Shelby Report, which puts out trade publications about the grocery industry. Publix leads with 43 percent, but Winn-Dixie and Sweetbay have slipped to 10 and 6 percent, respectively.

Traditional grocery stores behind Walmart and Publix are the most at risk of falling behind, especially as Super Target, Aldi and other discount stores add stores to further splinter the market. They can’t compete with Walmart’s price, but they also can’t compete with Publix’s reputation, fueling some speculation that the area could basically become a two-grocer town.

Walmart rules in much of the Southeast, where the Bentonville, Ark.-based company has the highest density of stores. It’s ahead in seven of 11 regions in the Southeast tracked by the Shelby Report. Kroger dominates in most of Georgia and parts of the Midwest. Publix reigns in nearly all of Florida.

Publix’s market share is closely tied to the proximity of stores to its Lakeland headquarters. It’s neck-to-neck with Walmart in the south Georgia/north Florida area but leads here in Central Florida. In South Florida, Publix has a commanding 54.6 percent.

Bob Messenger has been tracking grocery trends for about 17 years as the publisher of The Morning Cup, a daily online newsletter for leaders in the food industry. A longtime resident of Ellenton who recently moved to Chicago, he has watched Walmart evolve and win over customers solely on price. Although a fan of Publix, he doesn’t see a bright future for smaller, traditional markets.

"I think Publix is dead meat if Walmart targets them specifically. In fact, any grocery retailer that they target is in serious trouble because that’s just the nature of Walmart,” he said. "Even when the economy improves, I don’t think Walmart is going to suffer at all. It’s an institution in this country. It’s almost iconic.”

Publix and other grocers often beat Walmart on their stores’ closeness to customers, but they can’t compete on price, he said. If forced, they won’t be as profitable and, as a result, won’t have the resources to outshine Walmart in customer service, product selection and other areas considered their strengths.

Publix ranks 106th on the Fortune 500 list with $27 billion in revenue and $1.5 billion in profits. It stands visibly unshaken by Walmart’s latest campaign but continually seeks ways to improve the shopper experience. Next month, in response to customer feedback, it launches a new online deli ordering service at some of its stores to shorten wait times at the counter.

The website’s founder, Michelle Atwood of Atlanta, has seen Walmart’s comparison campaign and insists any savings are misleading if you factor in Publix’s weekly buy-one-get-one free deals, known of BOGOs, and other promotions. She recruited shoppers from Publix’s five states to shop identical lists and found Publix to be cheaper.

Walmart advertises everyday low prices without the hassle of monitoring sales. It doesn’t do BOGOs like Publix but matches competitors’ prices if a shopper present proof, something Publix does not. Walmart also accepts manufacturer coupons but not coupons from other stores promoting $5 off a certain purchase amount.

Scott Stewart, a 61-year-old mystery shopper from St. Petersburg, has visited Publix stores about 1,000 times in the past seven years and almost never has had a bad experience. "If I’m going to spend 89 cents on an item in Publix or 87 cents on an item in Walmart, I’ll go to Publix every time,” he said.