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What would it take to overthrow king Publix? Safeway's Florida exit begs the question.

George Jenkin's second Publix store opened in 1940. It was very much a grocery store of the future, with automatic sliding doors, frozen food cases and air conditioning. The chain's popularity and history makes it hard today for other grocers to break through the Florida market. (Courtesy of Publix)
Published Aug. 17, 2018

LARGO — Everything is on clearance inside Tampa Bay's only Safeway grocery store.

Patio furniture, 40 percent off. Beach chairs, too. Most grocery items are 30 percent off; the entire liquor store is 20 percent off.

The discounts will probably get steeper as it draws closer to Aug. 25, when the California-based chain will end its two-year foray into Florida retail.

Florida's three Safeways are handing their keys over to Publix, which will reopen the stores under its signature green banner this fall.

In Florida, it always comes back to Publix.

And the competitors that try to beat Publix at its own game? Well, they historically get burned.

Safeway took over three Alberstons stores in 2015, investing a combined $30 million in bringing the West Coast brand to Publix country.

Even then, analysts said the move was risky and inadvisable.

"Safeway tried to compete on a traditional supermarket level and it couldn't," said Jeff Green, a partner at Phoenix retail real estate firm Hoffman Strategy Group. "The experiment crashed and burned."

Call it the Publix factor, the Publix obsession, a legion of Publix purists — whatever you'd like. But Floridians at large love the grocery chain "where shopping is a pleasure." It makes it tough on competitors — whether they're new or old to the market.

Look back: Safeway opens in Largo as Publix's newest competitor

Kroger, the Cincinnati-based grocery giant that has more than 2,000 stores across 31 states, has yet to take on Publix directly in Florida. Instead, it's putting its money behind the expansion of specialty store Lucky's Market.

Meanwhile, Winn-Dixie and its parent company Southeastern Grocers are in the process of re-branding, expanding Hispanic banner Freso y Más and remodeling stores to stay competitive after emerging from bankruptcy.

"George Jenkins was a brilliant and great grocer," said Phil Lempert, an analyst and food trends editor at the Today Show. "What he and the family and everybody has done there has really focused on the relationships with their employees and the relationship with their customers.

"That really transcends price, store format, all those things."

Publix, which has about 1,200 locations in six states, continues to post rising sales and higher stock values — even when it got backlash from some shoppers who protested the chain's donations to NRA supporter and Republican gubernatorial candidate Adam Putnam.

Safeway's Florida problem, according to both analysts, was that it wasn't different enough from Publix to stand out and attract shoppers. It also didn't open enough stores to win a substantial customer base.

Lempert used Atlanta as an example: about 25 years ago, Kroger decided to enter the market. It opened dozens of stores, not three, and still saturates the area today.

It's expensive to do that, though. And risky in a market like Publix-loving Florida. Safeway declined to comment when asked about its exit from the Sunshine State.

On Tuesday afternoon, Cathy Matusiak pushed her grocery cart through a pet care aisle with mostly barren shelves at the Largo Safeway.

She's from the Chicago suburbs and has lived in Florida for two years. She's only been inside Publix three times.

"The produce was too expensive," she said. "I'll never go back."

Safeway has been her store. It's also the only place she can always find Ben & Jerry's Chubby Hubby ice cream.

"I keep telling the people at the cash registers, 'I'm going to miss you guys.' I was shocked when I heard," she said. "It seems like there's a Publix everywhere you turn."

She liked having something else. Other retailers likely think there's more shoppers with that attitude.

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A Kroger subsidiary just bought a Delray Beach shopping center for a new Lucky's Market. The Colorado-based chain has put a target on Florida. Sixteen of its latest leases have all been in Florida.

"Publix is such a strong part of the market share that it means there's a lack of alternatives," Green said.

Lucky's is not like Publix. And that's why it works here.

A Lucky's spokeswoman said the company has been embraced by Florida foodies who want to live a healthy lifestyle at a reasonable price.

You could call that segment the food-obsessed, millennial and 'Gen Z' shopper, according to Lempert.

He identified two other key Florida demographics: the long-time Floridian or Florida native (the Publix type) and the under-served Hispanic shopper.

Let's go shopping review: Winn-Dixie and Fresco y Mas

That last category is what Jacksonville's Southeastern Grocer is working to dominate. Fresco y Más is already huge in Miami, and this year it expanded to Tampa.

SEG's other stores such as Winn-Dixie — the general supermarket that competes directly with Publix — are being renovated to include hardwood floors, brighter displays, expanded produce and wider selection.

"Certainly there's a lot of baggage," Lempert said, referring to the chain's recent bankruptcy. "This most recent move is a smart one, if they can pull it off."

Every region has its favorites — though the cult-like following Publix attracts isn't necessarily the norm.

Take a shopper like Gerry Murphy, who moved from Hillsborough County to North Carolina with her husband eight years ago.

Her first house there was an hour-and-a-half away from a Publix. She made the drive whenever she could. When it was time to move closer to Chattanooga, which has the Florida chain, Murphy's first question to the Realtor at every potential home: "How close is it to Publix?"

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She now lives a comfortable 4.8 miles away from her favorite store.

The only area that may be as emphatic about its regional chain is Western New York. There, Wegmans reigns supreme.

Wegmans, like Publix, has values that have won over generations of shoppers who swear by its products, prepared foods and customer service, Lempert said.

Both chains are growing.

Wegmans is creeping down the coast while Publix creeps up.

Should they go head to head? That could be the real battle.

Contact Sara DiNatale at Follow @sara_dinatale.


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