June 10, 2008
Publix in Deal with Albertsons
Publix Super Markets announced yesterday that it had reached an agreement to purchase 49 Albertsons in Florida from Albertson’s LLC. The two companies are looking to close in September. Terms of the deal were not announced.
Of the 49 locations Publix is acquiring, 30 units are in central Florida, 15 in the northern portion of the state and four are in the south.
With the acquisition of the Albertsons locations, Publix removes a competitor from the market and gains entry into at least one Florida market, Escambia County, where it previously did not have a presence. Publix plans to convert all locations that remain open to its own banner. It said the timing of grand opening dates would depend on the amount of remodeling needed for individual locations.
Publix CEO, Ed Crenshaw, was upbeat about the acquisition. “The demand for the high-quality service our associate owners provide gives us the opportunity to reinvest in these communities by acquiring additional sites for Publix stores,” he said in a company press release. “We continue to focus on being the premier food retailer in the areas in which we operate.”
Discussion Questions: What will Publix’s acquisition of Albertsons stores in Florida mean for it and its grocery competitors in the state?
BrainTrust
Recent Discussions
Discussion Questions
Poll
This is yet another move by Publix that further solidifies its already existing monopoly in the state. According to Supervalu’s most recent 10-K, for the period ending 2/28; the company only operates 75 Albertsons in the state now anyway–and Publix is taking 49 of those?! That means that aside from Publix, what’s left of market share is very segmented between 16 Albertsons left, Winn-Dixie trying to come back, the couple Kash-N-Karry’s left plus their handful of Sweetbay stores, and the number of Spanish or discount operators there are.
In my eyes, the growth of Whole Foods and Fresh Market in the state is almost more competition than these operators, that is aside from the everyday threats of the supercenters….
For the last 10 years I have been wondering when another solid grocer, i.e., maybe Kroger, would come into the state, and it just hasn’t happened. It must be that Publix is too formidable!
Publix is a very savvy marketer and retailer. By taking a competitor out of the market, Publix not only increases its sales’ base, but also makes it a more formidable competitor to the remaining players in the market.
What will be interesting is seeing if Publix will use any of these locations to expand its Sabor, Greenwise or other new formats. Stay tuned.
The major impact will be an even more impenetrable fortress in Florida. The Seminole used the Everglades to great effect. It looks like Publix knows their Florida history very well.
Publix just keeps getting stronger and the mega power in the Southeast.
They have done these acquisitions in the past starting with picking up some ideal properties from Great A&P when they were exiting the Atlanta region in the late 1990s.
Publix always sees potential in their acquisitions of strategic properties. They just can’t be beat. They are quite savvy supermarket operators.
This is a very smart acquisition for Publix. The market is already tailored made; the locations are mostly logistically incremental, and the cost looks very reasonable.
This is a huge and very smart acquisition for Publix. Albertsons and Publix will own the market. This will make it hard for Winn-Dixie to compete. Good move.
Another nail in Winn-Dixie’s coffin. Publix will do much better than Albertsons but probably will not get the stores to the normal high Publix level of sales per square foot. Albertsons has been beat down pretty bad. Most likely Publix got these stores at garage sales prices. My guess is even lower than the last sale price. With the announcement of Publix moving into the Panhandle and Alabama Gulf coast, this will further impact Winn-Dixie. Probably will see some sister store cannibalization but nothing major.
Publix is the savviest grocery retailer in the Southeast, and this acquisition of the Albertsons locations is but another example of the company’s superb leadership. It appears the sites represent those markets where Publix is well known and/or the customer base is clamoring for expanded access to a great retail brand.
It’s extremely unlikely that a great operator like Publix would’ve paid too much for the Florida Albertsons locations. So Publix enlarged their market share without a price war or the need to overextend their logistics network. What could be bad about that?
Publix already claims market share in the neighborhood of 50% in its markets overall and 70% in its stronghold along Florida’s “gold coast.” This addition will add to its power base. So long as it remains fiercely committed to serving its customers, I expect Publix will continue to stand out as the strongest supermarket operator in the southeast–and one of the best in the entire nation.
It was brought to my attention that my information on Albertsons Florida stores was incorrect.
The Florida Division of Albertsons LLC (held by private equity company, Cerberus Capital Management) is made up of 93 Albertsons-Savon food and drug stores, 15 Albertsons Express fuel centers and one Distribution Center and employs more than 10,000 associates.
Albertson’s said in its release that it will continue to operate its distribution center in Plant City, FL and division office in Lake Mary, FL to continue to support its remaining Florida stores.
I think this is just one more way that Publix continues to show their competitors (such as W-D) who is really in charge.
Publix has enough DC flexibility to service the outlining stores without killing their cost structure. Expect them to continue these opportunistic endeavors.
Very Smart!!!
Publix is superb in service-breadth of grocery offerings, private label, marketing, local and statewide support, attractiveness of stores…there is no end to their supremacy. They ARE the store for general category grocery and I really think they are a specialty grocer that offers an everyday full line of product!
GOOD for them!!!
More Discussions
Has Same-Day Delivery Become an Expectation Across Retail?
Are expectations around retail delivery speed in flux?OpenAI Names the Infrastructure Standard for Agentic Commerce
Will OpenAI or Google (or another entity) set the gold standard for agentic commerce?Is Five Below Poised For Even Greater Growth?
Five Below is hitting serious growth numbers. Can this trend continue?
This is yet another move by Publix that further solidifies its already existing monopoly in the state. According to Supervalu’s most recent 10-K, for the period ending 2/28; the company only operates 75 Albertsons in the state now anyway–and Publix is taking 49 of those?! That means that aside from Publix, what’s left of market share is very segmented between 16 Albertsons left, Winn-Dixie trying to come back, the couple Kash-N-Karry’s left plus their handful of Sweetbay stores, and the number of Spanish or discount operators there are.
In my eyes, the growth of Whole Foods and Fresh Market in the state is almost more competition than these operators, that is aside from the everyday threats of the supercenters….
For the last 10 years I have been wondering when another solid grocer, i.e., maybe Kroger, would come into the state, and it just hasn’t happened. It must be that Publix is too formidable!
Publix is a very savvy marketer and retailer. By taking a competitor out of the market, Publix not only increases its sales’ base, but also makes it a more formidable competitor to the remaining players in the market.
What will be interesting is seeing if Publix will use any of these locations to expand its Sabor, Greenwise or other new formats. Stay tuned.
The major impact will be an even more impenetrable fortress in Florida. The Seminole used the Everglades to great effect. It looks like Publix knows their Florida history very well.
Publix just keeps getting stronger and the mega power in the Southeast.
They have done these acquisitions in the past starting with picking up some ideal properties from Great A&P when they were exiting the Atlanta region in the late 1990s.
Publix always sees potential in their acquisitions of strategic properties. They just can’t be beat. They are quite savvy supermarket operators.
This is a very smart acquisition for Publix. The market is already tailored made; the locations are mostly logistically incremental, and the cost looks very reasonable.
This is a huge and very smart acquisition for Publix. Albertsons and Publix will own the market. This will make it hard for Winn-Dixie to compete. Good move.
Another nail in Winn-Dixie’s coffin. Publix will do much better than Albertsons but probably will not get the stores to the normal high Publix level of sales per square foot. Albertsons has been beat down pretty bad. Most likely Publix got these stores at garage sales prices. My guess is even lower than the last sale price. With the announcement of Publix moving into the Panhandle and Alabama Gulf coast, this will further impact Winn-Dixie. Probably will see some sister store cannibalization but nothing major.
Publix is the savviest grocery retailer in the Southeast, and this acquisition of the Albertsons locations is but another example of the company’s superb leadership. It appears the sites represent those markets where Publix is well known and/or the customer base is clamoring for expanded access to a great retail brand.
It’s extremely unlikely that a great operator like Publix would’ve paid too much for the Florida Albertsons locations. So Publix enlarged their market share without a price war or the need to overextend their logistics network. What could be bad about that?
Publix already claims market share in the neighborhood of 50% in its markets overall and 70% in its stronghold along Florida’s “gold coast.” This addition will add to its power base. So long as it remains fiercely committed to serving its customers, I expect Publix will continue to stand out as the strongest supermarket operator in the southeast–and one of the best in the entire nation.
It was brought to my attention that my information on Albertsons Florida stores was incorrect.
The Florida Division of Albertsons LLC (held by private equity company, Cerberus Capital Management) is made up of 93 Albertsons-Savon food and drug stores, 15 Albertsons Express fuel centers and one Distribution Center and employs more than 10,000 associates.
Albertson’s said in its release that it will continue to operate its distribution center in Plant City, FL and division office in Lake Mary, FL to continue to support its remaining Florida stores.
I think this is just one more way that Publix continues to show their competitors (such as W-D) who is really in charge.
Publix has enough DC flexibility to service the outlining stores without killing their cost structure. Expect them to continue these opportunistic endeavors.
Very Smart!!!
Publix is superb in service-breadth of grocery offerings, private label, marketing, local and statewide support, attractiveness of stores…there is no end to their supremacy. They ARE the store for general category grocery and I really think they are a specialty grocer that offers an everyday full line of product!
GOOD for them!!!