Publix Super Markets stands out as one of the most dominant and well-managed retailers in Florida. Its recent fourth-quarter report showcased the company’s strength, with operating earnings of $1.3 billion, representing a remarkable 35% increase compared to the previous year. Moreover, Publix’s full-year profits for 2022 reached an impressive $4 billion, a solid 13% rise from 2021.
Despite its success, Publix remains a privately owned company. Its shares are held by dedicated employees, directors, and the Jenkins family, who founded the supermarket chain. Surprisingly, Publix’s market value towers over that of Kroger (ticker: KR) and Albertsons (ACI) combined, reaching a staggering $48 billion based on its quarterly stock price.
With a staggering 842 locations within Florida alone, Publix has become synonymous with grocery shopping in the state. The company’s strategic expansion and unwavering commitment have effectively driven its competitors, such as Kroger and Albertsons, out of the Florida market. Although Kroger serves the region through online grocery services, Publix’s dominance is undeniable. In fact, Publix operates a total of 1,322 stores, expanding its reach to Georgia and Alabama, where it boasts the second and third highest number of stores, respectively.
Setting itself apart from Kroger is Publix’s impressive net margin of 7%, which is twice that of its competitor. Notably, Publix’s dedication to exceptional customer service stems from being an employee-owned company—a distinction making it the largest of its kind in the country. Employees have the opportunity to purchase stocks through company plans and receive stocks as part of their compensation packages.
Adding to its appeal, Publix continues to offer free cookies to children, a cherished practice that had temporarily ceased during the challenging times of the Covid-19 pandemic. Furthermore, these mouthwatering treats are baked right in Publix’s stores, ensuring customers enjoy a delightful shopping experience.
At the end of the fiscal year, Publix had an employee count of 242,000, and some longstanding staff members have even become millionaires through their dedication and hard work. The company fosters a culture of internal growth, promoting from within its ranks. CEO Todd Jones, who started as a clerk in his late teens, exemplifies Publix’s commitment to nurturing top talent. It’s worth noting that Publix demonstrates pay restraint, as Jones earned $3.4 million in 2021—a stark contrast to Kroger CEO Rodney McMullen’s $18 million.
While the company’s executives maintain a low profile in the media, Publix’s impressive performance speaks for itself. At present, the company has no immediate comment regarding our inquiry. In response to the earnings press release, CEO Todd Jones expressed his pride in the company’s operating results and thanked Publix’s associates for continuously delivering premier customer service.
Publix: A Strong and Successful Company
The Publix grocery store chain has been a long-term winner in the retail industry. Currently, the company’s stock price is set at $14.55 per share, with over 3.3 billion shares outstanding. Over the past five years, the stock has seen an impressive 75% increase, excluding dividends. In fact, over the past 25 years, the stock has grown tenfold. The current valuation of the stock is around 12 times the projected 2022 operating profits.
Publix sets itself apart by regularly boosting its dividend, which currently provides a solid 2.5% yield for investors.
A retailing consultant, David Livingston, highlighted Publix’s success, attributing it to the company’s financial strength. Publix boasts a fortress balance sheet with virtually no debt and holds approximately $11 billion in securities, primarily bonds. Additionally, Publix owns a significant amount of real estate, hundreds of stores, as well as all of its distribution centers and manufacturing facilities. One interesting observation made by Livingston is that Publix doesn’t heavily rely on home deliveries; instead, it focuses on providing great in-store experiences for its customers. As a result, people enjoy visiting Publix’s stores.
Livingston goes on to note that Publix continually grows quarter after quarter and rarely faces setbacks. He even compares the company’s methodical expansion along the East Coast to a “lava flow.” In many states, including the Carolinas, Publix maintains a dominant market position without substantial competition. Livingston believes that Publix’s success is further reinforced by its ability to attract high-quality employees, much like Costco Wholesale does.
Founded in 1930 by George Jenkins at the age of 23, Publix has always been ahead of the curve. Even in the 1940s, the company stood out with its stores featuring amenities that were rare in the industry at the time, such as air conditioning, automatic doors, frozen-food cases, and terrazzo floors.
According to Forbes, the Jenkins family, who currently owns Publix, has an estimated stake worth around $9 billion.
Given its favorable demographics in Florida and its unassailable market position, Publix has a bright future ahead.