NEW PUBLIX UNITS DISPLAY IN BULK

TONY SPLEEN

LAKELAND, Fla. -- One of the last bastions of packaged produce is finally going bulk.

Publix Super Markets here is shifting the merchandising strategy in its produce departments to include more bulk produce -- a major move for the nation's 11th largest retailer, which for decades has bucked industry trends by continuing to sell most of its produce in bags or on overwrapped trays.

The change is being driven by consumer demand, according to a local observer. The chain is "offering customers what they want," he said, adding that Publix is getting "a lot of compliments from customers. They no longer have to guess what's on the bottom of a package."

Officials from Publix declined to comment on the changes in their produce merchandising.

Industry observers contacted by SN predicted the move will help the company be more competitive in its aggressive expansion efforts. Publix -- a dominant chain in Florida for the last 62 years -- has recently expanded into Georgia and South Carolina. The company operates 432 stores and reportedly has plans to open 200 more outside of its home state in the next six years.

Several of the newer stores in Georgia and some existing stores in Florida have been experimenting with bulk produce. But it wasn't until recently that the retailer opened a new store in Florida with plans to sell produce in bulk from the start.

That store opened in February in Orlando, with 5,000 of its 47,000 square feet of selling space devoted to the produce department, which displays more than 60% of its offerings unpackaged.

Existing Publix units have slowly made the move to include more bulk offerings, an industry observer noted, and all new stores are reportedly being planned for bulk displays.

Since the original plans for the Orlando store were to sell bulk produce, the company installed refrigerated cases equipped with misting machines -- a new feature for Publix stores and one not needed in a produce operation that sells only packaged items.

At this time, misters are used in only one other Publix unit, but more will be installed if they prove useful and as older stores are converted to include more bulk produce, a source told SN.

It's too early to say if there will be a total shift to bulk merchandising at Publix. Some items -- like apples, oranges, grapes, asparagus and corn -- are still available in packages, but they are also sold in bulk.

"Some people just don't like the thought of their produce being touched by other people," the local observer said. That's why Publix has chosen to give them the option of packaging.

In the 1960s and 1970s, packaged produce was the norm in supermarkets. The popularity of bulk displays took off in the 1980s, as supermarkets put a greater emphasis on freshness and quality and as a more diverse consumer base demanded a greater range of portion sizes. Most retailers made the shift to bulk.

Publix -- an industry leader in fresh foods categories -- held out through the era of change. About 10 years ago, virtually all produce sold in Publix stores was packaged or wrapped -- even bananas, a source said. In recent years Publix has displayed some unpackaged items, yet packaged produce remains an important element chainwide.

Company representatives have long touted the success of their packaged-produce merchandising strategy, saying that it helps cut down on bruising and shrink. The company pledges that every piece of produce in a bag or overwrapped tray is of high quality. In-store signs tell customers that if they are skeptical about the contents of a package, associates will open it upon request.

Why has Publix been slow to change? "I'm sure they've had their reasons," said Bruce Axtman, a senior associate at Willard Bishop Consulting, Barrington, Ill., a supermarket industry consulting firm. "As the retail environment continues to change, produce and other perishables are becoming more important in terms of how consumers judge stores and how retailers compete with other formats. This adds up to a need to be more aggressive and consumer-focused."

Axtman, who specializes in the produce side of the supermarket industry, noted that club and wholesale formats that are getting into perishables are typically selling packaged produce -- not bulk. The shift in merchandising strategy at Publix may help the retailer further differentiate itself in a market that is seeing considerable growth in alternative store formats, he said.