Publix takes No. 1 spot in Atlanta’s grocery wars

By that, she means there isn’t a location near her and she doesn’t want to fight long checkout lines.

Nolan’s experiences -- echoed by other metro shoppers -- may explain in part why Publix, the Lakeland, Fla.-based grocery chain, took the lead in the past six months of Atlanta’s grocery market share for the first time.

Data, to be published by the Shelby Report in July, shows that Publix, with 143 stores in metro Atlanta, has 27 percent of the market, followed by Kroger with 131 stores and 25.5 percent, and Wal-Mart with 58 stores and 23 percent.

The shift to Publix is at least a momentary victory in the knock-down, drag-out grocery wars that have spanned two decades, with Publix chasing Kroger’s No. 1 position.

Despite the recession, Wal-Mart has failed to knock Publix and Kroger from their No. 1 and No. 2 perches in metro Atlanta.

Publix’s new dominance in metro Atlanta has come after years of expansion, marketing and focus on quality and store presentation. Publix also is only in five Southern states, which could give the company a better handle on the southeastern consumer.

“We have been working so hard to move those numbers in terms of increasing the numbers of customers shopping with us,” said Brenda Reid, media and community relations manager. “Over the past three years, we have focused very closely on improving the shopping experience for our customers.”

Less clutter, more consistent product placement and faster checkout experiences, she said, have been part of Publix’s initiatives to win market share -- along with intensive customer service training.

Still, Publix’s reign as No. 1 could be short lived, said Ron Johnston, president and publisher of The Shelby Report. That’s because Kroger is on the move, too.

Glynn Jenkins, director of communications and public relations for The Kroger Co.’s Atlanta Division, said the grocer has several projects under way for 2010, including the remodeling of Sandy Springs, Alpharetta and Roswell stores, a new store in Sugar Hill and two new fuel centers in metro Atlanta.

One recent innovation for the Cincinnati, Ohio-based company was the transformation of the “disco Kroger” in Buckhead into a “Fresh Fare,” a very upscale concept with a focus on produce, prepared food displays and a high-end wine selection.

“Several signs indicate that customers are feeling more optimistic,” Jenkins said. “They are spending more money inside our stores on certain discretionary categories such as organic foods, specialty deli meats and higher-end wines. At the same time, customers who are more price-sensitive remain cautious about discretionary spending.”

He said that while Kroger does keep its eye on market share, its own data shows the Atlanta division achieved positive identical sales growth in the first quarter.

About a dozen customers interviewed by the Atlanta Journal-Constitution at Publix, Kroger and Wal-Mart stores last week raved about Publix for quality and services like carrying groceries to cars -- though not necessarily price.

Keenan Sevier of Marietta praised Publix for cleanliness, but was entering Kroger to buy bread because he expected to pay less than at Publix.

Many Atlantans can see the evidence of the fierce grocery wars taking place in their neighborhoods.

“If you see a Kroger go up on one corner, there’s a good chance down the street you’re going to see a Publix,” Johnston said.

“Publix and Kroger have been going toe-to-toe for some time now. Publix has done a good job from a real estate perspective of continuing to build stores. Since they came out of the ground in 1991 in Atlanta, they have totally invested in the market,” he said.

In recent years, Publix added stores, focusing on Atlanta’s urban core with stores like those at Atlantic Station and in the condo tower Plaza Midtown, as well as rural areas. No new stores are planned for 2010, said Publix’s Reid.

And then there’s Wal-Mart -- the United States’ largest retailer -- which took less than a decade of selling groceries to capture the No. 3 market share spot in Atlanta.

For example, in January 2005, Wal-Mart had 15.4 percent market share with 32 stores -- it now has a 23 percent share.

Though Wal-Mart has been slow to add new stores recently (the last one to open in metro Atlanta was in Avondale Estates in 2008), it has been spending millions of dollars to refresh stores, giving them wider and cleaner aisles, new signage and a more upscale feel.

Warren Wright, the developmental co-manager for the Wal-Mart store on Cobb Parkway in Marietta, said April was the first time that groceries took the No. 1 spot for sales in his store, accounting for about 30 percent of revenue. Bananas, he said, are the best-seller.

Still, although Wal-Mart has made steady market share gains here, consumer analytics and research firm Buxton, based in Fort Worth, Texas, believes Wal-Mart should be No. 1 in metro Atlanta with a 32 percent share. That’s based on average sales nationwide and the number of stores it has in metro Atlanta.

“We realized in Atlanta that our customers weren’t aware of what we are actually doing,” said Karen Brewer-Edwards, Wal-Mart’s regional vice president in charge of Georgia.

She said the company is ramping up its marketing efforts with more radio, television and newspaper ads, as well as billboards.

As far as Wal-Mart’s performance in Atlanta’s market share goes?

“If you focus too much on market share you forget the customer,” she said.

But the game isn’t being played by just the big three. Grocery newcomers like Aldi, Trader Joe’s and Fresh Market also are chasing their share of Atlantans’ grocery spend. And Food Lion -- with less than one percent of the market -- is making a comeback with a new store in College Park, for example.

Grocery wars have been legion in metro Atlanta, as grocery chains have come and gone. Remember Winn-Dixie and Bi-Lo? In 1993, Winn-Dixie had the No. 2 market share in metro Atlanta and Bi-Lo was eighth. Today, both are gone from metro Atlanta. Gone, too, are Cub Foods, Bruno’s and SaveRites.

One analysis of why Atlanta hasn’t succumbed to Wal-Mart’s dominance yet is because of Atlanta’s fairly affluent population base, said Juli Zoota, director of research at Buxton.

“Compared to other markets throughout the United States, Atlanta has more than its fair share of consumers that are white-collar, affluent-to-middle income, suburbanite families and young, urban, multi-ethnic professionals.”

In short: Exactly the type of customer that Publix tends to attract.

Still, Charles Wetzel, president and chief operating officer of Buxton, wouldn’t count Wal-Mart out.

“Wal-Mart is a gigantic company, but it executes with the flexibility of a very nimble company. That’s only feasible because they have a good feel for who their customer is.”

He predicted that Wal-Mart would continue to increase its market share in Atlanta by the end of 2010, if not overtake Publix and Kroger.

SHOPPER VIGNETTES

At the Wal-Mart on Cobb Parkway in Marietta, shoppers Janet and Kenny Martin of Marietta said they go to Publix for “buy one get one free” deals, and because the store has more variety. But they prefer Wal-Mart for its prices.

In general, the shoppers interviewed believed:

-- Wal-Mart overall was cheaper (Wal-Mart’s rollbacks were mentioned by name) but has less variety. However, the universal complaint about Wal-Mart were long checkout lines and items that have sometimes expired. Two shoppers said they “loved” Wal-Mart.

-- Kroger has a great selection, sizes and prices (Kroger’s “10 for $10” deals and Kroger Plus Card were mentioned).

And though shoppers said they might expect to pay more at Publix, they would get a higher quality of produce, meat and fish. Publix’s service ‚ì such as carrying groceries to the car -- also was admired. Publix bakery and prepared foods also were praised.

One mother, Shymil Jones of Marietta, had Tropicana juice, cheese slices and Danimals in her Wal-Mart cart, along with a bikini for $18.

“I love to shop!” she proclaimed. But on a budget, she compares prices at Aldi and Sam’s Club before buying.

The Martins, who had steaks in their Wal-Mart cart, came for light bulbs and a cellphone charger too. “I like that,” said Janet Martin, of how she could buy toiletries and groceries all in one place.

That sentiment was echoed by Wal-Mart shoppers Nimmi Malhotra with her 7-month-old son, who had bath toys along with fresh vegetables and all manner of foods in her cart, as well as John Baber, a 31-year-old professional who said he’s been grocery shopping at Wal-Mart since college.

Not everyone loves the Wal-Mart experience, however.

Karen Armstrong of Atlanta called the “combined” grocery/general merchandise shopping experience “repugnant.” She doesn’t want to buy T-shirts and tomatoes in the same place, for example. She was leaving Publix with a cart full of groceries. “But my business partner goes exclusively to Wal-Mart and loves it,” she added.

Sonya Williams of Marietta was leaving the Kroger at Delk and Powers Ferry roads with a few items, but said she had just left Publix where she had ordered a cake for her son’s birthday.

Grocery market share in metro Atlanta

During the past six months, Publix took the lead in metro Atlanta’s grocery wars. The Shelby Report, based in Gainesville, Ga., determines market share based on revenue and a host of other variables, including demographics, store locations and surveys.

1. Publix, 143 stores, 27 percent share

2. Kroger, 131 stores, 25.5 percent share

3. Wal-Mart, 58 stores, 23 percent share

4. Ingles, 41 stores, 4.8 percent share

5. Costco, 7 stores, 4.1 percent share

6. Sam’s Club, 12 stores, 2.9 percent

7. SuperTarget, 12 stores, 2.7 percent share

8. All American Quality Foods, 24 stores, 2.2 percent share

9. Whole Foods, 7 stores, 1.5 percent share

10. BJs, 8 stores, 1 percent

Source: The Shelby Report of the Southeast, to be released in July.

(*Note: Other grocers in metro Atlanta have less than 1 percent market share, including Trader Joe’s, Aldi, Fresh Market, C&S, Food Lion, Super H Mart, Save-A-Lot and others.)