Publix Challenges Wal-Mart on....Low Prices?

Publix The Walmart Slayer Wins Another Round With Low Prices

Publix is many things — favored among shoppers for quality store brands, customer service and well kept stores — but a low-price leader it typically isn’t. But the grocer Forbes recently dubbed “the Walmart slayer” is pushing ahead with its own campaign comparing Publix prices to the discounter and telling shoppers how much they can save shopping at Publix.

“Walmart doesn’t always have the lowest price,” declares Publix’s weekly ad. “Save $31.45 this week at Publix.”

It’s just another round fired in the volley between Walmart and regional grocery operators. In 2012, Walmart started running ads comparing its prices to competitors and in some cases naming regional chains. This Spring, Publix started fighting back with billboards and ads challenging Walmart’s low price claims.

“All the supermarkets have gotten smarter about how their competing against Walmart,” says Neil Stern, senior partner with McMillan Doolittle, a retail consultancy. “They’re being smarter and more strategic in the way they fight them.”

Many retailers like Publix have decided it’s better to come close to Walmart’s pricing on a list of roughly 500 essential items. It means less margin, or profit, but they try to make it up on items that matter a little less, says Stern.

This focus on price for Publix isn’t new, but the public display is. Many years ago, Stern and I conducted a series of pricing studies in the Atlanta market. We compared like items or price per unit across several stores including Walmart, Target TGT +0.1%, Kroger KR -0.1% and Publix. In nearly every instance, Publix had higher prices by a considerable margin.

The studies were published in a retail trade magazine and inevitably we heard from Publix CEO at the time, Charlie Jenkins. Not to argue the point, but to request the shopping list and more details. Jenkins was more interested in correcting pricing discrepancies and perception than debating the veracity of our claims.

Always the sign of a successful leader.

Price isn’t everything but when a popular retailer with the perceived edge on quality and service can also match the low-price leader, it’s an advantage that’s hard to beat.