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Richard Mullins Columns

Publix chief dishes up grocery gossip

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Published:   |   Updated: June 2, 2014 at 08:49 AM

Ed Crenshaw is a fan of Trader Joe's and has been for 20 years.

That's saying something, considering Crenshaw is chief executive of the dominant grocery store chain in the whole Southeast, Publix, and leads a fleet of 1,000-plus locations from Florida to Tennessee.

Crenshaw divulged this near-blasphemous belief last week at a real estate industry conference in Tampa, where he came to tell the story of the beloved Publix founder, George Jenkins. Crenshaw rarely makes public speeches, so I jumped at the chance for a few minutes to talk to the man in charge, if only to hear whether food prices will keep going up and up and up. I mean, have you seen the price of milk lately? It's insane.

Along the way, Crenshaw talked with me about expansion plans, long-running rumors about a tie-up with nNorthern grocery giant Kroger, whether Publix will ever have a membership card or domestic partner benefits for employees, and a few other things.

First, let's start with rising food prices. I wish the news were better. “I think we'll see more food price inflation,” Crenshaw told me after his speech. Not only are higher prices the new normal, but Crenshaw said beef and energy prices will continue to push lots of food prices higher.

“Probably the best thing we can do is be an agent for our customer,” he said. “There's only so much we can do.” That includes making stores more efficient, trying to reduce food waste “and pass those savings on to customers.”

So, will Publix expand the number of BOGO deals to help customers? “It depends on the vendors and whether they participate in that,” Crenshaw said. “There's a cost to Publix and the vendors with those BOGO deals.”

Maybe Publix could try a membership card program, like those at Winn-Dixie or Wegmans.

“It does not fit into our marketing approach,” Crenshaw said. “We want the best value for every customer, and there are other ways of doing that. Why make the customer jump through a hoop to get a deal?”

At one point, someone asked about Trader Joe's and whether he viewed the stores as a threat, no matter how small.

“I'm a big fan of Trader Joe's,” Crenshaw said. “I really am. I went to a Trader Joe's in California probably 20 years ago, and I was pretty amazed by it … but it's a totally different customer than we're trying to appeal to.” Crenshaw said Trader Joe's fans are “almost a cult.” (He said this as a compliment.) “We know people are going to try it, but we are more mainstream … and I suspect that most of the people that shop at Trader Joe's will probably do the bulk of their shopping at Publix.” The average person grocery-shops 2.3 times a week, he noted. “We will provide everything you need, along with great people, and you do not have to jump around and go to different places.”

This whole talk was hosted by the Real Estate Investment Council of Tampa, so more than a few questions focused on where Publix might park another store.

“If we can grow stores in areas within our present footprint, I like that,” he said. “I'm not going to mention a competitor by name, but the experience in our stores is much different than the low-price leader, and obviously it costs more to do what we do in our stores than the low-price leader does. We have to look for the right customer, as well.”

In other words, Publix needs customers able to pay a certain price for milk, compared to a price-driven giant like Wal-Mart.

Still, given how Publix keeps expanding, I asked Crenshaw whether the deep-set philosophy that George Jenkins instilled in the company would preclude Publix from acquiring another grocery giant — given the difficulty in replicating that philosophy from scratch at a new acquisition. Year in, year out, rumors of merger talks between Publix and Kroger keep circulating.

Crenshaw dutifully recited the required legal obfuscation. “Oh, I can't talk about things like that.” But he added something else. “We have bought assets — like Albertson's locations. … That works best for our culture. That culture is truly the bedrock of our company, our people. George Jenkins once said this to me. 'Never try to be the biggest.' His objective was only to be the best. Size only came about as a result of his trying to be the best.”

Then came my most politically dicey question. Publix has a reputation as a great place to work. So, what does he think about giving domestic partner benefits to Publix employees, given how same-sex marriage is gaining approval in state after state?

“We know that is becoming more and more prevalent,” Crenshaw said. “We'll continue to look at where we are with all our benefits, and evolve as our associates' needs change.” Though a bit noncommittal, compared to companies like Chick-fil-A, that sounds like he's leaving the door open.

With hordes of executives trying to get Crenshaw's attention after his speech, I asked one last question, given that industry after industry is being turned inside out by new Internet startups. What does he think about Amazon's online grocery ordering plans?

“People want to be around people,” he said, compared to sitting at home on a PC. “We want them to have a great experience, as opposed to the alternative. Online ordering is going to evolve.”

One other thing he said that night shed light on his thinking about Trader Joe's, Wal-Mart, Amazon, grocery prices and everything else. The success of a company, Crenshaw said, is based on three things: Service, quality and price. “In our business, you've got to be good at two of those, but you better be the best at one of them. For us, the No. 1 priority is service.”

 

rmullins@tampatrib.com

(813) 259-7919

Twitter: @DailyDeadline

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