The Comparison to the leader, Publix

The Comparison to the leader.  IMG_4092

 

Many years ago Winn Dixie, Piggly Wiggly and Publix competed for the dollars of families in Florida.  Many of you know Piggly Wiggly has evaporated with the Echerd’s and Wollworth’s of days gone by.  Winn Dixie holds onto it’s hat.  As market share dwindles and profits erode WD closes stores that at one time brought great profits.  A comparison and walk through the local WD tells me why.

When you walk into any Publix store and you encounter an employee they make eye contact and say something!  At WD, there’s the first void.  As you make your way around the store you begin to notice some things.  On one occasion I searched for sugar.  It wasn’t in a place that I thought I would normally find it.  The traffic patterns in WD didn’t make sense.  It was in one of the last few aisles.  It seemed WD wanted me to look for sugar so that I walked past the entire aisle of dill pickles.  That brings me to the next thing.  Twenty feet of pickles.  Why twenty feet of pickles, all the same brand?  It looked as though only Mt. Olive would sell pickles to WD.  The shelves were otherwise barren in this enormous store and like many customers I couldn’t wait to grab the sugar and exit.  Since I couldn’t find the sugar on aisle 26 I had to find an employee to direct me.  In Publix there are employees everywhere, not in WD.  Five minutes later after standing at the front counter for three of them the eighteen year old had to call for someone to help me.  It took me twenty minutes to get a pound of sugar.  I went to WD because I thought it would be faster, I was wrong.

People will pay more for customer service.

Given the evidence at hand there may be only room for one company to provide ample customer service.  In the grocery business in Florida it is Publix.  I find it hard to believe that a grocery giant like WD would sit back and allow Publix to eliminate them.  I would guess they use demographics as their excuse.  It is true that when you approach a WD it looks run down.  It appears to be in a run down part of town.  It appears to be in a depressed neighborhood and that the neighborhood is dying.  Guess what, WD is partially to blame.  Like the convenience store owner in the previous article they took their eye off the ball.  They saw the economy as their Achilles heal and let the stronger competitor win out.  They thought lowering their prices would bring in more customers while ignoring customer service.  They thought  budgeting their store repairs to necessary would keep profits in line.  They thought negotiating with Mt. Olive to be their only pickle company would reduce the risk on the shelves.  From the words of Dr. Phill, “How’s that working for ya?”

Who goes to Winn Dixie?

Every night Publix stores are cleaned.  WD might be cleaned too.  We can’t tell.  Why can’t we tell?  We’re not there to see it.  We as customers make a determination.  If WD’s shelves are empty then their food is old and approaching the expiration.  We buy a gallon of milk and it lasts three days whereas at Publix it lasts ten days.  We believe that the meat we buy at Publix hasn’t been repackaged.  We don’t know about any other store.  We want fresh food.  We know with certainty that the food we buy at Publix will be fresh.  We pay more to have that peace of mind and Publix knows it.  Few people go to Winn Dixie is the answer.

What does any of this have to do with a lighting company?

I can’t really answer that question.  Well, yes I can.  You see a conversation with the people of Publix unearthed information.  Publix changes light bulbs entirely every two years in their stores.  At Publix the light bulbs are fresh and bright every two years.  They do not want to take the risk of random lights being out in any of their stores.  Over at WD in Sanford 1/3 of their lights are out.  Customers see that and they know this store is going to H in a hand basket.  Two miles away in two directions there are clean and bright Publix stores to take the money of the people of Sanford.

Publix almost understands!

Included in the plans Publix has begun to retrofit the lighting in some of their stores while still re-lamping other stores (SMH).  It is true that the commitment to keep their stores bright makes sense.  It doesn’t make sense that Publix would spend ten thousand dollars and more to replace lamps with the same types of lamps every two years and waste on average $40K per store on electricity.  That’s right, the lights they are using are costing Publix on average $40k a year more than they need to spend.  It would seem that they would realize that LED’s would be a better option.  Why you ask?  Let’s look at the costs Publix is encountering.  Please do some simple calculations.  Every two years they spend $10K to re-lamp a store, right?  The two years that passed they paid out $80K in excess electricity.  So now they have spent $90k to keep their stores bright.

SMH

It’s time for new lights and another $10K but they’ll still pay out the $40K in excess electricity.  This routine will continue until they get around to changing the old lighting into LED.  Here’s what they must be thinking; if they retrofit to LED and the bulbs are more expensive they’ll still be changing them every two years.  That has to be what they are thinking.  If it is they have the wrong LED vendor.  If their vendor has told them they will still have to change the bulbs they are lying to Publix.

It’s a simple as a five year warranty

Publix has over 1,100 stores and it doesn’t look like any of them are closing any time soon.  You would think with that many stores and losing on average of $45k a year on lighting that they would do things differently.  You would think, I know I do, that if Publix’s vendors are selling a two year cycle it is time to fire the vendors.  Heck, if you’re replacing lights and paying someone to replace your ballasts it is time for you to fire those vendors.

Would you think Publix would benefit from a five year parts and labor warranty?  Let’s explore that.  That average store uses an excess of $40k in electricity, right?  Multiply that out.  $40k x 5 years.  Publix stands to save $200,000 on their electricity.  Wow, that’s a lot.  Okay now in those five years they spend an average of $5k a year on re-lamping.  So, all totaled they are spending $225,000 doing it “their way.”  Oh, and that’s in one store!  According to my research they waste $45M a year.

What’s the solution?

Instead of putting a band-aid where a tourniquet is required Publix should put an immense effort  retrofitting their stores.  Every day that passes Publix loses $123K.  Can you believe they’d sit back and allow themselves to lose that much money?  Well, they don’t.  You see, you the customer is paying for that.  Every visit to Publix and your $200 grocery cart pays for their 6.5% profit and their expenses.  As you do this Publix earned $354M in profits  and left $45M on the table which is another 2%.  That’s right Publix could be enjoying an 8.5% profit, but they cannot see the forest for the trees.  Publix owns a bank, did you know that?  It’s true.  If they loaned themselves the $40M to retrofit all of their stores at a low interest rate and immediately retrofit their stores the tourniquet would stop the bleeding.  Then in a year or two Publix would be in the black with their lighting costs instead of $40m in the red.  Just saying!

Meanwhile over at Winn Dixie

Still comparing to Winn Dixie.  Well, how can one store earn cash of $354M while another one has a loss?  Winn Dixie is in dire straights.  Their loses have caused them to close stores and that’s foolish if you ask me.  Stop for a minute Winn Dixie and look at your competition.  Ask, is it too late?  I’d say no.

Free advice

Hey, Winn Dixie, here’s my free advice.  Be more like your competition.  I’ve talked a lot about Sanford Florida.  You own the plaza where that store is.  Improve the plaza!  If you don’t own it, pay to improve it.  In Sanford there are 23,000 homes and the combined income of those homes is over $1Billion.  So when you look at that amount of money it is likely that maybe $100M is available for groceries.  It is currently divided up with you, Save-a-Lot, Aldi’s and yes, three Publix stores.  You are in the heart of Sanford and yet Publix is getting your business.

My advice to you is to promote “the New Winn Dixie.”  Retrain your employees on customer service.  Hire managers who are present.  Promote those with good attitudes and put the ones with bad attitudes out to pasture.  Make a “New face of Winn Dixie” by changing uniforms to brighter colors.  Set standards for your employees and reward them for great service.  In essence turn the frown upside down.  Treat your employees well and they will treat the customers well.  Spend money to improve the store and fill the shelves with a variety of products.  Advertise the changes and give away things in the stores constantly to bring in all of Sanford.  Call your store the Original hometown grocery chain and tug at the heartstrings of people.  Take pride in your store and prove to the community that you care.  Right now the community thinks you are barely hanging on, that’s because you are!

One more thing

Hire American Retrofit LED to retrofit your stores, save on electricity and bring profits back to Winn Dixie!