Kantar Consulting issued a neutral outlook for 2018-2023 for Publix, mainly because the retailer may need to grow in a different manner going forward than it has in recent years.
Publix did nearly $37 billion in sales in 2018 and had a sales compound annual growth rate of 5% for 2013-2018. Kantar forecasts the growth will be 3% for 2018-2023.
“Publix historically has been able to rely a lot on organic store growth,” said Kantar senior analyst Elley Symmes. “Organic growth will continue to help that retailer, whereas with others the flat stores growth means that they have to basically just get more out of their existing brick and mortar assets.”
Where the company is opening stores could have an effect on how successful they are, however.
“They have basically saturated the Florida market, where they do extremely well, but their stores as they’ve moved north, they have mixed results,” Symmes said. “They’re beautiful stores, but at the same time they’re dealing with all different consumer segments, they also are dealing with other players that consumers are already loyal to, more local players, and so as more of their organic store growth comes from other states, we just see a bit of a slowdown in the performance of the retailer as they kind of figure out their role in that new landscape.
“Publix was really lucky that they basically had Southeastern Grocers to kind of outdo in the Florida market, and with the other markets where they’re expanding, it’s a bit of a different story,” Symmes said.
She noted that opening smaller stores could be a big opportunity for Publix going forward.
“Their new Greenwise formats are a really exciting, innovative concept that they’ve launched,” Symmes said. “They’ve only opened one to date, so that’s very much still a pilot, but as we track and see the rollout of those and the performance, that could be a real accelerator in Publix’s growth going forward.
“You have a company like Target that was really underperforming and has committed to that small-box format, and that’s helped them really expand reach and bring all new consumer segments into that retailer ecosystem,” Symmes said. “I think Publix has the same opportunity.”
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