Publix Supermarkets – The American Dream

History:
Publix Supermarkets is a company that only within the last 80 years has become what it is today. George W. Jenkins, the late founder of Publix Super Markets, was born on Sept. 29, 1907. He grew up in Harris, GA, where he worked in his father's general store until 1925 when he headed to Tampa FL drawn by the prospect of getting into the real estate industry. Instead, he began working at Piggly Wiggly grocery, after being with the company for just a few months he was already managing the store. He was then transferred within the company to manage their largest store in Winter Haven. After 4 years he decided to resign so he could open his own store, following in his father’s footsteps. This was the beginning of something great. On Sept. 6, 1930, George opened his first store, which he called Publix Food Store located in Winter Haven, Florida. Five years later, he opened a second store in the same town. Realizing he needed to truly follow his dreams he decided to close these two stores to open the store people called his “dream store”, the first Publix Super Market, on Nov. 8, 1940. “A food palace of marble, glass and stucco, this store included innovations such as air conditioning, fluorescent lighting, electric eye doors and terrazzo floors” (Publix.com). In 1945, he was able to purchase a warehouse and 19 All American stores from the Lakeland Grocery Company. He began replacing these small stores with his larger supermarkets and this was his first step towards the never-ending expansion of Publix Supermarkets across the East Coast. This brought the Publix standard of clean stores, extremely friendly service and very good quality products to the customers throughout Florida. The wholesome values and philosophies, which laid the foundation to these stores, are still in place and serve as the true cornerstone to the Publix mission for being the “premier quality food retailer in the world” (Publix.com).

Development:
Publix began to grow at a fast rate and all while keeping Mr. George’s philosophies in mind. He believed a business would be successful “treating employees and customers like family. Our thousands of cashiers, baggers, meat cutters, and bakers are the company's largest collective shareholders—all trained to put their customers first” (Publix.com). As a result of this foundation, year after year, Publix has been named the No. 1 supermarket for customer satisfaction, as well as one of the FORTUNE's "100 Best Companies to Work For," and as an inspiration for its efforts in sustainability and community programs and involvement. The basis for the way Publix was developed and grew was something that Mr. George felt other stores were missing. He believed a shopping experience should feel like they are at home while they are in his store and it was all about treating others well. The customers were treated with respect at all times and the associates were treated the same. It was made to feel like a family for the employees, a place where they can openly voice their opinions and concerns. Promotion was from within so all employees had the opportunity for growth within the company. “Mr. George's philosophy was that if a company creates the proper environment, attracts the best people, and instills the desire to serve, it will prosper in good times and bad” (Publix.com). Publix's prosperity can be attributed not only to the high standard of employee but also Mr. Jenkins' focus on their well-being. It has been stated that Mr. George was a very good employer to work for and this is shown through him allowing workers to take ownership in the company. This method he used created employees that felt a loyalty to him as well as his company. Also, a happy employee is what makes a happy customer. Through his stock ownership and retirement plans he set building blocks for employees that would have no reason to want to look elsewhere for employment.

Growth:
Today, Publix has become a household name through Florida and much of the South East. It has grown from a single store in Central Florida into a collection of 1,077 supermarkets that “brought in $28.9 billion in sales last year” (Publix.com). Publix is not in the industry of cutting edge technology or even in one that would require constant change to meet the consumers needs. But it does need to expand if it wants to keep up with the other large retail stores such as Wal-Mart and Target, which are both much further expanded across the country than Publix. Clearly the past strategy of this company was focusing solely on employee and consumer satisfaction and that is what has made Publix the extraordinary company it is today. This strategy has worked greatly thus far but expansion cannot forever be a second priority. If someone from the East Coast were to ask a person from California if they had been in a Publix, more often than not the answer would be no or even “What’s Publix?” It is important that Publix not forget that expanding is a large factor to success. It appears they have began to realize this and currently Publix has plans to enter a new state for the first time since 2002. Beginning this year Publix has set in motion the plans to open 11 new stores in North Carolina, and this is in addition to the four BI-LO stores it has acquired there this year. The new division office that will open in Charlotte in 2014 is also the first new division office that it has opened anywhere since 1991 (Farfan). Clearly, Publix has not been focused on expansion as much as it should have been, but it is important to note that they are slowly climbing higher up the country than they were before.

Publix has become what is today by the pure vision of one man. He saw a store that people did not dread having to go to; he saw a place where employees were happy to be at work and customers felt as if they were cared for. A place with bright lights, shiny floors, comfortable atmosphere, and most of all a place everyone enjoyed. If it were not for the ideals of Mr. Jenkins and his view of what customer service is all about then Publix would have ended up in the running with every other grocery. Instead, with the way he focused on taking care of employees, making them feel like they are family, the employees would in turn treat the customers the same. This has created a store that is consistently ranked number one in customer satisfaction in comparison to the competition. Even the slogan embodies the views of Mr. Jenkins: “Publix, where shopping is a pleasure.”

When evaluating Publix in regard to Deming's 14 Points for Management it is evident many parallels are seen. While Publix is not manufacturing a product, if looked at in a broad prospective one can use the Management techniques to improve things like customer service by reducing variation. Below each of the fourteen points show how Publix can align to Deming’s views. 1. Create constancy of purpose for improving products and services.
Here we can evaluate how Mr. Jenkins had a vision of what a shopping experience should be. From the time he was young and worked for his father, he knew how a store should run. He saw the way the grocery stores were operating and he knew he could make an improvement. He had standards that his father had taught him growing up and he took these standards and developed something better than was in existence before. It is evident he had a focus on long term planning instead of the same short term like many other grocery store owners. These other stores simply had a product they wished to sell and focused solely on doing only that, while Mr. Jenkins saw that by creating a pleasant shopping environment and happy employees he was creating a relationship with a populous that will last their lifetime and into the next generation. By providing these quality products along with customer service that was unparalleled to any other competitor at the time, he created a success story. 2. Adopt the new philosophy.
This was especially true for Publix since the philosophy Mr. Jenkins believed is the one he based the whole business on, therefore all of management was in line with how he believed things should be run. Management being focused on customer service and providing quality products in an enjoyable shopping environment made it easy for the workforce to fall right in line with these ideals. Since this was the foundation, there was not a time that management and the workforce were not aligned on these views and working together to meet these standards. 3. Cease dependence on inspection to achieve quality.
Deming’s third point is one that does not exactly apply to a supermarket, and this is because it does not necessarily manufacture anything. If we were to attempt to apply this then we would say if all employees reduce variation to their customer service then there would not be a need to quality check each employee on their customer service skills. 4. End the practice of awarding business on price alone; instead, minimize total cost by working with a single supplier.
Here Publix cannot use this tool to its advantage as much as a manufacturing company would be able to. A supermarket must use many suppliers to provide the products required for consumers and to stock the shelves. While the company can ensure all products are always the same quality and in turn reduce the likelihood they will receive product that is not to their standards, then they would in turn keep customers happy. By keeping the variation low of the many suppliers they use for the individual products then the quality should maintain at a standard. 5. Improve constantly and forever every process for planning, production and service.
This as well is something that Publix management can use to their advantage. By reducing the variations of the ways customers are served they will ensure each customer has the same positive experience. Of course customer is hard to duplicate since it depends greatly on the employee that is providing that service but if managers instill their expectations then each employee will have a more consistent, positive interaction with customers. 6. Institute training on the job.
Publix is focused on training constantly to ensure their employees all understand their mission and purpose. As stated on the Publix site regarding training, “Publix is well known as a leader in the supermarket industry. To maintain that reputation, we work hard to train every associate on our standards for customer service, cleanliness, safety, teamwork, merchandising, waste intolerance, and a drug-free environment. This training is essential to our success and essential to helping our associates achieve their own success (Publix.com). One of the primary ways they train their associates is through on the job training given directly from one of their experienced professionals. This way each employee will learn hands on how customers should be treated and see the high standards Publix has. 7. Adopt and institute leadership.
Deming here focuses on the difference between leadership and supervision. Publix appears to have a strong management style that focuses on leadership and ideals such as leading by example as opposed to some companies who have management behind a desk. 8. Drive out fear.
Deming knows that leading through fear is a style of management that simply does not work in the ways it is intended. This style is counter-productive and this is not a style adopted by Publix. The management style of Publix is more of a family style than a fear evoking style. 9. Break down barriers between staff areas.
Deming’s ninth point is another one that does not apply directly to a supermarket since each department does not necessarily have a particular output that is used by other departments. 10. Eliminate slogans, exhortations and targets for the workforce.
Once again, being that a supermarket is not a supply chain it is hard to relate Publix management style to the 10th point Deming discussed. If thought of in a broad sense, one could say Publix management could ensure their customer service processes are consistent and if an employee does not meet standards then the supervisor should to ensure they improve the process by which the interactions happen or the training regarding the standards happens. 11. Eliminate numerical quotas for the workforce and numerical goals for management.
Deming’s 11th point does not apply to a supermarket since it does not produce a product that can be lowered in quality by setting production goals. 12. Remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit system.
Deming’s 12th point also does not directly apply to a Publix unless it is being looked at as the product being customer satisfaction. 13. Institute a vigorous program of education and self-improvement for everyone.
Publix management is excellent with implementing self-improvement programs within the organization. Publix employs certain individuals that are required to be the developer of the training programs within the company, for everyone from top management to individuals working to stock the shelves. “Training Developers create on-the-job training programs for more than 150,000 of our retail associates, technical and operational training for more than 13,000 retail department managers, leadership training for 14,000 company leaders, and implementation training to support strategic initiatives throughout the company” (Publix.com) 14. Put everybody in the company to work accomplishing the transformation.
The 14th point Deming discussed is one that does apply to Publix greatly. From the founder of the company to the high school student hired to work for the summer, all employees are trained to understand the overall goals of the corporation and it takes everyone from the top to the bottom to make it the company it is today.

Publix Supermarkets is not a perfect company, it like many others has not only the strengths that make it the store it is today but also has weaknesses that must be addressed in order to continue to be a successful organization. When considering Strengths, Weaknesses, Opportunity, and Threats (SWOT) faced by management and the organization as a whole there are many in each area will be considered for success. Strengths - Publix Supermarkets has a solid foundation in customer service and even has been ranked number one to other retailers in customer satisfaction which has began historically via the company owner. Also Publix has its own manufacturing units for diary, bakery, and deli adding to the consistently high quality of these items and also reduces costs of purchasing from other suppliers. Marketing within the regions it is already saturated into is also a strength. Weaknesses- The market is only expanded to five states, the company does not seem to be keeping up with changing technology, and the price of the products is not considered to be affordable by all. Other industries are taking competitive advantage over the high prices of Publix.
Opportunity- Publix has a very strong hold on the markets it is currently in therefore it can expand easily in the states it is already saturated into, and since the company places emphasis on it’s own brand of products it is increasing its sales that will come back into their own investments. Threats- The largest threats to Publix is simply the competitors strong presence in such vast regions across the country, the prices are relatively high when compared to other emerging superstores such as Wal-Mart, Winn Dixie, Target and wholesale stores such as Costco. Since the founder focused on top quality customer service historically and did not focus as much on expansion and low costs like some of the competitors have, a large demographic does not consider shopping at Publix. The overall environment Publix is confronting is one where some of these threats are surfacing. Over the past 20 years technology has had major shifts that Publix is not necessarily keeping up with. Even lacking simple things such as the ability do to self check out at most stores can be a factor that causes consumers to shop elsewhere. The external factors that have the largest impact on Publix are customer needs and wants, industry trends, technological innovations and competitive dynamics. To properly balance these strengths and weaknesses to the opportunities and threats, Publix needs to have a management style that will continue to focus on the quality customer service but also on prices being charged to the consumer. By offering their own brand at a lower price they may be able to address the external factor of consumer wants and needs along with the competition pricing. The competitive position of Publix is still strong and it can continue to pursue its current corporate level strategy as long as a focus on technological advances and price are brought into the forefront of focus. In order for Publix to turn its weaknesses into strengths and threats into opportunity it only has to focus on one primary thing, innovate and develop a strategy to lower prices and draw the consumers in who believe Publix prices are simply too high. By developing a corporate level strategy that will assist in bringing down prices, even just on the Publix brand products then people would continue to shop at Publix over a big box store.

Corporate-level strategy- Publix has a job in their corporation that is focused solely on strategy. “Strategy Support oversees the company's Continuous Quality Improvement (CQI) program, which was created to encourage everyone at Publix to work collectively to improve efficiencies, reduce costs, and to create openness to change. Our CQI program is essential to making Publix a better company. Since the program's inception, thousands of improvement projects have been completed, netting a considerable savings for Publix. Our CQI program has helped Publix develop a culture of cost containment and has enabled us to remain competitive without compromising the level of service we provide our customers” (Publix.com). Clearly the mission of Publix currently is and will always be quality above all else. Publix does operate as one core business yet the strategy has not changed much over time. There is not necessarily one specific division that detracts from the competitive advantage; simply they need to have more focus on consumer wants. While the current customers who shop at Publix love it, and continue to rank it number one in customer satisfaction, they still need to ensure they are pricing products at a level that will attract new customers. For the future performance and growth of this operation, more programs need to focus on cutting costs without cutting quality.

Business-level strategy-
Publix can easily overcome the threats it is facing and they are taking steps in the right direction. By continuing to focus the business level strategy on the positive consumer shopping experience but also ensuring it meets the consumer’s want of lower prices, they will solidify their place as the number one grocer in every region they operate in. The current functional strategy with this extraordinary focus on the customer experience offer superior service and an ideal shopping environment need not change. Publix simply would not be the same store of this was not its primary concern. Yet, by pursuing a method to lower prices, Publix can focus on customer satisfaction in more than one way. To implement this strategy Publix can, instead of cutting quality to lower costs, offer discounts or coupons to make them more competitive in their market.

Structure and control systems- Publix has an effective functional structure with each department grouped based on similar skills, expertise, and types of work activities. This type of structure works very well for Publix since in this structure each department (such as human resources, production, distribution) has allocated resources that help it reach the organizational task, and each department only deals with their particular area.

Recommendations- Publix does not need to make any major corporate changes in order to assess and overcome the weaknesses and threats it faces. Given that this company is founded on the consumer relationship and has spent many years devoted to spectacular customer service, the current customers are not going anywhere. For over 80 years, customers have proved that quality service trumps low prices for many individuals. The strategic problem faced by Publix is that it cannot simply advertise it has the lowest prices because it does not, and likely will not have lower prices than a store like Wal-Mart. Yet, by aligning the business strategy with one that attempts to bring prices closer to it’s competition as well as a strong advertising campaign it can draw back some consumers that believe Publix is simply too expensive. Publix needs to accept its weaknesses regarding small operating area as well as higher prices and then use the strategy of showing the consumer Publix other things to make up for it. Having a business strategy that focuses on local markets, which will increase sales while it creates a connection to a particular community, will ensure success. Currently, the company has opened “Publix Sabor” stores in south Florida, which is seeking to attract shoppers from its large Hispanic and Caribbean populations (The Economist). Publix is already a success, but with an altered focus and a more personal approach bringing in new consumers, they can be a forever success.

References:
The Economist. Publix, The Opposite of Wal Mart. Retrieved October 6, 2014 from http://www.economist.com/node/9122287
Evans, J.R. & Lindsay, W. M. (2014). Managing for Quality and Performance Excellence (9th ed.). Mason, OH: South-Western, Cengage Learning.
Farfan, Barbara. How Privately-held Publix Supermarkets Beat the Large Publicly-Traded Pharmacies Retrieved on October 1, 2014 from http://retailindustry.about.com/od/retailbestpractices/a/How-Privately-held-Publix-Supermarkets-Beat-Largest-Publicly-traded-Pharmacies-CVS.htm
Publix History. Retrieved October 1, 2014 from http://corporate.publix.com/about-publix/culture/history.