Publix, the fastest-growing grocery chain in America, isn’t a
corporate giant that exploits workers, but an employee-owned company
that’s more profitable than any of its competitors.
Unlike Walmart’s hourly workers, who just got a raise to $9 and $10 an hour,
Publix workers get a piece of the company after putting in 1,000 hours
and working for the company for over a year. Each employee-owner takes
home an additional 8.5 percent of their take-home pay every year in
stock options. According to Forbes,
58,000 of the company’s 159,000 workers are on track to become owners,
and the company makes sure each potential owner gets a broad sense of
the business by rotating them through its grocery sector, distribution
network, and real estate division.
This year, Publix was ranked as one of FORTUNE’s top 100 companies to work
based on an anonymous employee survey, which asks questions based on
pay and benefits, working conditions, communication with management, and
diversity. Publix is only one of 12 companies to be consistently listed
by employees as a top place to work every year since the list’s
inception in 1998. But Publix isn’t dominant in just the grocery
industry — its pharmacies are also consistently outperforming top
pharmacies. A 2013 Marketforce survey of customers at CVS, Walgreens, Rite Aid, and Publix rated Publix as providing the most satisfying customer experience.
That high rating by customers is the driving force behind Publix’s
success. CEO Todd Jones — who was a Publix bagger in the late 1960s —
told Forbes the company’s success depends on keeping customers happy. In
2007, Publix ranked first in the same American Consumer Satisfaction Index that ranked Walmart last.
“We believe that there are three ways to differentiate: service,
quality and price,” Jones said. “You’ve got to be good at two of them,
and the best at one. We make service our number one, then quality and
then price.”
To take supply-side economists at their word, a company that puts so
much time and money into customer service, and shares profits so
recklessly with so many workers, would mean they’re going broke, right?
In comparison to the biggest grocery store chains, Publix is the most profitable, posting $27.5 billion in 2012 revenue,
and profit margins of 5.6 percent that same year. When compared to
Walmart’s 3.8 percent margins, along with Kroger, which only made
margins of 1.6 percent, Publix is eating its competition for lunch. Even
though Walmart pulls 16 times more in annual revenue, the
employee-owned chain still has over $100 million more in cash and investments on its balance sheet ($6.8 billion) than Walmart ($6.7 billion).
And despite the company’s altruistic actions toward workers and
customers, it still manages to provide lower prices than Walmart. This
2012 chart shows prices of essential items at Publix and Walmart, and
shows how much Publix shoppers save by not spending their money at
Walmart:
Whether or not Publix will become the premiere grocery chain in America
remains to be seen. But what the company has proven beyond all doubt is
that conventional wisdom degrading employee ownership of a company as
bad for business is just a myth.
The Wal-Mart near us has lower prices than publix by a small margin, but it’s almost negligible even for us (we are very poor) and publix DEFINITELY has better quality and selection.
I’m glad to hear they’re apparently such a good company as well!
