Any grocery stores within a few miles of a Publix will find out what real competition means. Publix, an employee-owned supermarket chain, excels at customer service, cleanliness, has great store brands, reasonable prices and has already jumped on the online ordering and delivery bandwagon. Can anyone do better?
Don’t mess with Publix.
That’s the biggest of several takeaways in the early 2020 shakeout in the grocery sector, with two chains — Lucky’s Market and Earth Fare — declaring bankruptcy within nine days of each other.
Lakeland-based Publix has 806 stores, or one per 26,000 people. It also has top-of-mind brand recognition, seven distribution centers and three food manufacturing facilities in the state.
Lucky’s had six locations in the region. Earth Fare had four stores. That’s about 300,000 to 350,000 square feet of mostly prime, anchor-based commercial retail real estate, that had some 1,000 employees.
Lucky’s listed about $600 million in liabilities on its Chapter 11 bankruptcy filing. The company had about $22 million of store operating losses and a $100 million net loss through Jan. 4. It projected that the 32 (of 39) stores it’s closing nationwide were on target to lose $30 million this year.
Kroger, in a separate public filing, says it will take a $238 million hit on its Lucky’s investment.
Earth Fare, meanwhile, listed assets and liabilities of $100 million to $500 million in its Chapter 11 filing.
Focusing on natural, organic, wellness and gluten-free products, sometimes with hipster, better-for-you marketing campaigns, the chains entered the west coast of Florida in 2017 and 2018 with rapid expansion plans.
The missteps and mistakes were exacerbated by classic market forces: Low-margins, high costs of customer acquisition and retention, logistics and distribution hurdles and heavy competition all played a part.
That, and Publix.