Publix Urges More Supplier Collaboration

DAVID ORGEL

BOCA RATON, Fla. — Publix Super Markets is reaching out to suppliers for help with challenges in areas ranging from supply chain to sustainability.

The chain's president, Todd Jones, last week urged closer collaboration on issues such as out-of-stocks, new-item introductions, recycling and food safety — all with the ultimate goal of enhancing the chain's already strong customer service.

“We're in business from a stockholder's point of view to grow sales and profits,” Jones said in a presentation here at the American Bakers Association Convention. “But how do you make that happen? For us, it's by maximizing customer satisfaction. Let's collaborate to grow our businesses together.”

One of the key hurdles the Lakeland, Fla.-based retail chain faces is staying in stock during high-traffic periods, he said.

“If we truly want to collaborate for success, we have to realize that Saturdays and Sundays and nights are a big part of our business,” he told the audience of baking suppliers. “Sunday is our busiest day of the week, it's 19% of our business. And we do more business from 4 p.m. to 7 p.m. Monday to Friday than we do from 11 a.m. to 4 p.m. during the day.”

Jones showed a photo of a recent out-of-stock situation on a Sunday in an Atlanta Publix unit, pointing out that customers were disappointed on two counts. “Not only did we not provide customers with the inventory, we disappointed them on ad items, for which we said we'd provide a discount.”

He cited a partnership with Frito-Lay as an example of a joint program to help solve such challenges by improving delivery schedules.

“Let's talk about what we can do to collaborate and grow our businesses together,” he urged suppliers.

Publix has been successful in employing automated replenishment to help address the challenge, and continues to build on that initiative. The retailer has completed five years of using automated replenishment, and has it in place for all products the chain distributes on its own.

“We've now partnered with three DSD companies — Coca-Cola, Nabisco and Tree of Life — and we're forecasting and replenishing their inventory needs in about 12 stores.”

That arrangement has improved in-stock service levels for those items from 94.5% to 98% in six months, he said. Publix shares data with the suppliers and tracks measures including inventory positions and forecast demand.

“We may ask you to consider partnering with us,” he told suppliers at the convention.

Publix also faces the challenge of managing its total SKU counts, a growing problem as the 1,011-unit operator attempts to fill in markets with smaller store footprints.

“We have about 34,000 unique items in our stores,” he told suppliers. “Last year we were offered 11,000 new items. That's impossible for us to handle; we'd have to displace 11,000 items in order to add these. So on new items, ask yourself, ‘Will it grow the category? Can I pull out something else to make room?’”

Suppliers were also asked to help Publix build on its success with recycling. “Last year we were able to recycle 42% of our inventory that can be recycled,” he said. “But we're not satisfied. We want to get to 65%-70%.”

To accomplish that, he said, “We're looking for partners to be able to do the recycling with. You'd be surprised at how much your people want to recycle — they think it's wonderful to do this.”

Turning to the topic of food safety, Jones said there's a lot of room for suppliers to help the chain's efforts.

“All of us [retailers] need to educate our associates on the proper ways to handle products,” he said. “We get checked four times a year by the state and we have a company to check us four other times a year in every store to ensure we're handling food safety as an area of utmost importance.”