As grocers double down on ecommerce, competitive pressure mounts for Publix

Ashley Gurbal KritzerSenior ReporterTampa Bay Business Journal

At first blush, Safeway's launch in South Florida is a blip in the local grocery market. It's only one store in Oakland Park — one of only three in Florida.

But one facet of Safeway's Florida debut is particularly notable for the industry. The new stores — all three of which are rebranded Albertsons — launched with online shopping and one-hour delivery service, via refrigerated trucks "with multiple temperature zones, so frozen items stay frozen and vegetables are crispy fresh when delivered."

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Safeway's fleet of refrigerated delivery trucks hits the road.

COURTESY OF SAFEWAY

Safeway's delivery fleet gives the company far more control over grocery quality than if items were delivered by a third-party service.

Publix Super Markets Inc. doesn't offer online shopping, though it does offer online ordering for bakery and deli items. Publix customers in some cities, including most of the Tampa Bay region, have access to grocery delivery via Shipt, though Shipt has no formal agreement with the grocer.

Lakeland-based Publix was a pioneer in online grocery shopping in the late 1990s, but pulled back from those efforts when they weren't as profitable as projected. But it's becoming increasingly clear that Publix will likely launch some sort of online shopping program in the near future — if only to keep up with some of its largest competitors.

Kroger Co. (NYSE: KR), based in Cincinnati, beat analyst estimates last week as it expanded its online shopping services. Kroger is one of Publix's biggest competitors outside of Florida, in metro Atlanta and the Carolinas.

Publix's main competitor in Florida, Wal-Mart Stores Inc. (NYSE: WMT), toutedits success with digital and ecommerce initiatives in early June. Walmart hasrolled out online grocery shopping with curbside delivery at several stores throughout Florida, including one in Tampa.

Amazon.com Inc. (NASDAQ: AMZN) is becoming more of a threat to traditional grocers, between its Prime Now one- and two-hour delivery services and rumored private label products.

Publix is revered for its innovative culture, so it will be interesting to see when and how the grocer tackles online shopping. And when it does, it's likely to have a ripple effect across multiple industries — it could eventually affect everything from the footprint of its physical stores to its supply chain.

"They sleep with one eye open about this stuff," David Livingston, a Wisconsin grocery analyst, previously told the TBBJ about Publix and ecommerce. "They don’t totally ignore it. Publix I can see eventually being good at this."