Case Study: Publix
As Publix Super Markets, Inc. moved into the decade of the 2020s, Kevin Murphy reflected back over his two years as president. Sales and profits had maintained their positive trend, established long before Murphy’s presidency, and comparable store sales continued to increase, despite the chain’s expansion of the number of stores. Publix continued to enjoy excellent publicity and a great corporate image, both internally and externally: it had been on Fortune’s 100 Best Companies to Work For, and Publix’s voluntary turnover rate was 5 percent, versus the industry average of 65 percent. The company was the largest employee-owned company in the United States and had never laid off an employee in its 89-year history. Although fiscal 2019 had shown net sales of a record $38.1 billion (an increase of 5.6 percent over fiscal 2018), and net earnings of over $3 billion, or 7.9 percent of sales, Mr. Murphy was concerned about the future.
The grocery industry appeared to be moving rapidly from the traditional in-person shopping experience in which the shopper visited a favorite grocery and personally chose the week’s grocery items, to e-commerce with home delivery, or phone app-ordered pickup based shopping. Technology had provided the means for shoppers to select their grocery items from an app on their phones, and delivery and logistics improvements enabled quick delivery of the grocery basket to the shoppers’ door. Mr. Murphy believed that Amazon’s purchase of Whole Foods was a likely catalyst to cause faster than normal industry change in e-commerce grocery sales and delivery. Evolving lifestyles had resulted in a decreasing amount of food cooked at home, and an increased focus on sustainability, health, and natural organic foods.
A new and powerful force that Murphy thought capable of causing significant and lasting industry effects was the COVID-19 pandemic sweeping the country. Cost control remained a major key to success, and private brands had emerged as a practical means of keeping costs low. Murphy was concerned that the rapid change in the supermarket industry was of sufficient magnitude to cause a major disruption in Publix’s positive trajectory if the company did not accurately identify the driving forces in the industry, and forecast and stay ahead of the industry’s path.
Using your critical thinking skills, and a recent SEC Form 10K, analyze the case study and prepare a paper discussing the following topical areas:
-Identify and discuss Publix competitors and their competitive strength
-Identify and discuss the driving forces in the grocery industry
-Using a recent SEC Form 10K, discuss the company’s financial performance and earnings
-Identify and discuss Publix’s strategy for growth and expansion going into 2022
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