Officials at Publix Super Markets strive to offer their customers the best possible service. It has paid off nicely for the chain, which has been named the Grocery Headquarters 2011 Chain Retailer of the Year.
By John Karolefski
Right after he finished college, Ed Crenshaw began learning about customer service as a stock clerk at the Publix Super Market in Lake Wales, Fla. Today, sitting in his office at the company’s nearby headquarters in Lakeland, he reflects on that learning, which took place over 37 years as he moved up the chain’s corporate ladder and continues in his present post as CEO. “Customer service is our position in the market,” he says.
It has been that way since 1930, when his grandfather, George Jenkins, founded the company in Winter Haven, Fla. and built the business around service and quality. Shoppers in Publix stores have come to expect a high level of TLC in the aisles and along the perimeter departments, where store associates are motivated to make the shopping experience the best it can be. Observers have long recognized the legendary service woven into the DNA of the largest employee-owned grocery chain in the country.
“Our associates know how important customer service is to our business,” says Crenshaw. “If we’re going to meet our customers’ expectations, we’ve got to deliver on service.”
Let the record show that Publix Super Markets has delivered. It was ranked as one of Businessweek’s top 25 Customer Service Champs (2007-2010). Publix received the “Customers’ Choice Award” from the National Retail Federation Foundation in 2010 and the same year was one of the top “10 Companies That Treat You Right” in a poll conducted by MSN Money-Zogby. Last year, Publix was America’s top-rated supermarket chain according to the annual national study from the University of Michigan’s American Customer Satisfaction Index. It has led the index for supermarkets since 1994 due to excellence in quality, service and prices.
Earning that widespread recognition—especially through an economic downturn when struggling shoppers are stretching their budgets—was an outstanding achievement. It was among the factors that prompted Grocery Headquarters to name Publix Super Markets as its Chain Retailer of the Year for 2011.
Crenshaw readily admits that the past year has been a challenge for Publix and its customers. “But we have been able to grow in our existing markets and grow in our existing stores rather than trying to support growth so much from new stores,” he explains. “It’s made us better. It’s also been a motivator to make sure that we’re running the business efficiently and effectively and see what we can do to reduce cost without impacting those areas that would affect the customer.”
To take the edge off the recession, Publix has helped shoppers by ramping up its BOGO (“Buy One, Get One”) promotions as well as adding and alerting shoppers to more advertised specials. “We were very cognizant of what our customers were going through,” he says. “It’s paid off for Publix because they’ve maintained their business with us.”
Indeed, the retailer posted retail sales of $25.1 billion for the fiscal year ended Dec. 25, a 3.3% increase from the previous year’s $24.3 billion. Comparable-store sales for 2010 increased 2.3%.
Publix operates 1,033 supermarkets in five states: Florida (735 stores), Georgia (179), South Carolina (44), Alabama (45) and Tennessee (30). Almost all of the stores operate under the Public banner. Other formats include Publix GreenWise Market (natural and organic products), Publix Sabor (Hispanic) and Pix (convenience stores).
Regardless of format or store, the laser focus on customer service is consistent from the beginning to the end of the shopping trip. It starts by someone welcoming shoppers to the store and ends with enough open registers to ensure a speedy and efficient exit, complete with carryout service. The focus is much the same in between.
“If you go to one of our service departments—deli, bakery, meat, pharmacy, or any of the areas where we have service available—you find knowledgeable associates behind the counter who are eager to offer assistance to the customer,” says Crenshaw. “That can be providing information about the product, offering cooking tips or serving tips. And then, of course, it’s also actually serving them with the product that they’re looking for.
“If they’re shopping on the interior of the store, they’re going to see store associates in the aisles. If asked where a product might be in the store, the answer is not ‘over on aisle seven.’ We stop what we’re doing and we take them to the product.”
Crenshaw admits that even with the company’s commitment to superior service, there are occasional customer complaints. So how are they handled?
“If a customer calls and they want to talk to me, they can talk to me,” he says. “That’s how important customers are to us. I would get them to the person who can resolve the problem and we’re going to follow up immediately. If it’s a letter to my office, that letter is going to be responded to within two or three days max. If I’m out of town, that letter will be passed along to someone who will respond to it quickly. That’s our opportunity to learn where we might be falling down on something, and we want to get that corrected.”
For Publix, superior customer service also means keeping out-of-stocks to a minimum. Crenshaw draws on his own shopping experience and the inconvenience of not finding a favorite brand.
“It’s critical that we view in-stock as part of the customer service that we offer,” he says. “That’s part of our service. That doesn’t mean that we can have every item every time and not have any out-of-stocks. That’s going to happen. But my objective is to have that happen as infrequently as we possibly can.
The opposite of not finding an item is too many items. That is why shoppers won’t find an overabundance of displays in the stores. Publix officials do not like cluttered aisles and put a premium on ease-of-movement for shoppers.
“That’s a real balancing act,” Crenshaw says, “There are products that we bring in and out—products that might not be stocked on a regular basis. Our customers are looking for new and interesting items, so we use a little bit of our space for items to be on display away from the shelf.
“But we work very hard not to have the aisles cluttered with displays. We have to be very careful not to make the customer weave around things and bump into each other. That would not make a pleasant shopping experience, which is part of our service.”
Smiles in the aisles
Another part of the customer service program at Publix is useful interaction between shoppers and store associates who are available to answer questions, find a product or offer a recipe. Most of this interaction takes place in the service departments on the perimeter. It all comes together in the chain’s popular staff-operated Apron’s program that consists of in-store cooking demos and sampling. The program aims to help shoppers discover or re-kindle the joys of cooking. There are several parts:
• Cooking demos to show shoppers the ease of meal preparation;
• Recipes for simple meals and recipe cards with shopping lists; and
• Cooking classes to take meal preparation to the next level.
“Apron’s really came about by listening to our customers,” Crenshaw notes. “We have a generation of customers who really don’t know how to cook like their parents. They didn’t learn how to cook, and they need help. As a customer service, we put together the Apron’s program to help our customers learn how to cook quick, easy recipes. The real bonus is they get to taste the meal before they buy all the ingredients to take home and cook.
“It’s been a very successful program,” he adds. “It’s right in our sweet spot because it’s a service we’re providing those customers on how to put together a quick, nutritious meal.”
With the wide variety of ways that store associates interact with customers, it’s not surprising that Publix takes special care in hiring. The human resources staff looks for people who feel good about serving others. Managers are taught how to ask the right questions of a potential associates to determine whether they are going to be successful.
“It’s more than just getting product on the shelf or getting the meat cut or the baked goods baked,” Crenshaw explains. “Our business is built around people serving people.”
He says proper training is the key to success. There are two types and both are done internally rather than being outsourced. The first, which applies to everyone, outlines Publix’s objectives and teaches associates how to serve customers. Then there is very specific training by job class that helps people become successful.
Crenshaw explains that people will enjoy their work much more if they have been well trained because that gives them confidence to do their job well. The goal is to build confidence in people so they feel good about the job they have with Publix.
“Training is an investment in an associate,” says Crenshaw. “We invest heavily in the training so that people can be successful and hopefully grow and advance in the company. We offer opportunities to our associates.
“Our promotion-from-within culture is very helpful,” he explains. “Typically we don’t hire managers to come into the company. Most of our people start in entry-level jobs and they’re trained from the very beginning. Then they receive training as they advance through the job classes all the way up into the store manager’s position and even beyond that. We would bring them into a corporate setting for some training on leadership.”
The company’s more than 147,000 employees share in the company’s success due to the Employee Stock Ownership Program (ESOP) which gives them a stake in the company via ownership. Jenkins, the founder, wanted the associates of the company to have an ownership stake. He believed that if they had a stake in the company they would deliver on those things that were important to the success of the company.
“As long as we’re a strong, healthy, vibrant company, we’ll continue to grow,” Crenshaw says, adding that growth won’t be possible without the hard work of store associates who focus on customer service at all levels of the organization. “This company is totally built around people,” he sums up. “It’s built around the associates who own the company and the customers we serve.”
Serious about sustainability
Many elite grocery chains across the country have made sustainability a priority and Publix Super Markets is no exception. “Sustainability starts at the very top with the support of our CEO. It’s embedded into our practices and culture. Across our operations, we have sustainability advocates who identify areas of opportunity, share best practices and make realistic changes,” says Maria Brous, director of media and community relations.
These changes deal with the conservation of energy, materials and fuel.
“Publix has always been committed to the responsible use of environmental resources,” says Brous. For example, the chain has implemented a number of initiatives, including:
• Building new stores that are more energy-efficient than existing stores;
• Reducing energy consumption in existing stores;
• Minimizing water use while still maintaining high standards of sanitation and food safety.
The chain’s energy conservation efforts span the technology gamut from cutting-edge solar-powered facilities to environmentally friendly refrigeration—with a lot in between.
Four Publix locations own working photovoltaic systems: Publix at Miami Lakes, GreenWise Market at Palm Beach Gardens, GreenWise Market at Boca Raton and corporate headquarters.
“We also focus on energy-efficient refrigeration and air-conditioning designs in our stores and facilities,” notes Brous. “Several new stores now feature a secondary coolant technology that significantly reduces the refrigerant charge.”
Added to the sustainability mix are options for the reduction, re-use and recycling of materials including:
• Recycling store-generated material destined for landfills;
• Partnering with suppliers to reduce materials, promote reusable and recyclable materials and increase the use of recycled content where practical; and
• Working with suppliers to identify sustainable product and packaging options.
Publix’s recycling rate is currently 45%. The company recycles 7,000 tons of plastic and 210,000 tons of cardboard. Each location has recycling bins for paper and plastic bags.
Food suppliers that do business with Publix must have packaging that is recyclable or is made from recycled materials, unless the food cannot be safely packaged for the consumer in such materials.
The Publix label works to reduce its packaging as well. The company changed vendors to reduce the amount of plastic in its water bottles. Some 3.6 pounds of plastic is saved annually from this change.
The Publix transportation fleet is examined for sustainability. Reducing fuel use and emissions through fleet modifications, training and optimization of loads, routing and delivery schedules takes place, as is evaluating the use and sale of alternative fuels wherever practical.
“We’ve examined our truck routes to reduce empty miles on the road, wear and tear on our vehicles and increase fuel savings,” says Brous. “We’ve changed the way we load our trailers to put more items on each truck and increase efficient use of truck space. In less than two years, we have decreased miles traveled by our trucks by more than 28,000 miles per week and our greenhouse gas emissions by over 2,200 tons.”
Publix has 1,200 light-duty cars, trucks and vans in its fleet, and is moving to using the most efficient traditional car models. Recent additions to the fleet are more gas-electric hybrids. Currently there are of 200 hybrids and 400 flex fuel vehicles.
The bottom line: “Publix’s continued success depends upon sustaining our environment, the people in our company and communities and our business.”
Take the brand challenge
Many grocery chains are confident of their store brands because they provide shoppers with quality and value. But Publix Super Markets takes that confidence to another level with its Brand Challenge, which is a variation of a BOGO (Buy One Get One) promotion. Shoppers are encouraged to buy a designated national brand item and get the private-label version of the product for free.
“Our Store Brand Challenge has been a successful promotion,” notes Maria Brous, director of media and community relations. “It allows the customer to compare the products in their home on their own time and when they can easily compare how the product performs for them. This is an extremely efficient program that has grown share in almost every category.”
Some examples of the products that have taken part in the promotion are breakfast cereal, granola bars, taco sauce and spaghetti sauce.
Here is a run-down of the chain’s private label packaged goods:
Publix. The mainstream brand, typically called an NBE (National Brand Equivalent), represents the largest number of private label SKUs. The items under this brand are equal to or better than the NBE and offer a savings to shoppers. The brand includes more than 20 authentic Hispanic foods.
Publix Premium. The “up-tier” brand for packaged goods is positioned to compete against specialty, gourmet, or very high-end products. New package design was recently introduced and is now being rolled out.
Publix GreenWise Markets. The overall health & wellness brand includes about 250 products merchandised in designated sections within the stores and also as a separate store banner. New package design system is planned for rollout in 2011. “We also work hard to make sure they are a healthier alternative than the majority of products in their respective categories. This is different than others who will source an organic product, but then have high levels of sodium or sugar in the product,” says Brous.
Publix has developed a reputation for offering great variety across its stores and private label is one component of that variety, according to Brous.
The chain’s approach, she adds, is to focus its innovation efforts on key business areas, such as bakery and deli, or in key categories such as ice cream. That focus was recognized this year with an innovation award from the Private Label Manufacturers Association for Publix Premium Pecan Turtle Fudge Limited Edition Ice Cream.
“Our stellar customer service ties into every area of our operations, including our store brand program. Our customers trust us and connect with us on an emotional level,” she says. “When we connect on an emotional level, we have an opportunity to create brand advocates. We like brand advocates because they can have a tremendous amount of positive influence on other customers in a way that we cannot.”