Publix To Add Grocery Warehouse To New North Carolina DC Complex

By late 2022, Publix should become more efficient and competitive in the markets that are part of its newest division in Charlotte, NC which was created 2012. That’s because the Lakeland, FL-based chain will have officially opened its newest distribution complex near Greensboro, NC (Guilford County) that will encompass approximately 2.2 million square feet and service Publix stores in the Carolinas and Virginia, the latter state being one of Publix’s fastest growing markets in terms of new stores.

Earlier this year, the most profitable grocery chain in the U.S. broke ground on phase one of the project which includes a 940,000 square foot refrigerated depot. And late last month, the employee-owned merchant said it would add 1.2 million square feet of dry grocery space to the Guilford County complex which could serve up to 140 Publix stores when it is completed in two years – a timeline that’s three years ahead of the originally announced schedule.

Currently, the Charlotte division supplies 126 stores – 48 in North Carolina, 61 in South Carolina and 17 in Virginia with at least five more stores planned to open in the next year. Those stores are currently supplied from two Publix DCs – Lawrenceville, GA (225 miles from Charlotte and more than 550 miles from Stafford, VA where its northernmost store is currently under construction); and McCalla, AL (approximately 500 miles from Charlotte and 725 miles from Stafford).

The new facilities will obviously help with logistics efficiencies, but they will also allow Publix to better fine tune and localize its assortment in a state-of-the art distribution complex.

When the depot is completed, Publix said it expects to add about 1,000 new jobs.

And there was also continued good news on the sales and earnings front for the very successful merchant. Overall Q3 sales increased 18.3 percent to $11.1 billion and earnings jumped nearly 60 percent in the three months ended September 26. Moreover, comp store revenue rose an impressive 16.5 percent in the 13-week period.

Publix estimated that its sales during Q3 increased approximately $1.25 billion, or 13.4 percent, due to the impact of the coronavirus pandemic.

Net earnings also zoomed, growing 59.9 percent to $917.6 million compared with $574 million in 2019.

CEO Todd Jones applauded the efforts and performance of store associates for helping Publix achieve its impressive results. “Our associates’ efforts to serve our customers, our communities and each other during this challenging time continues to be extraordinary,” he noted in a statement. “I couldn’t be more proud of their hard work and dedication.”

Although Publix’s stock is not traded on the open market (and is available to current employees and members of its board), the company noted that effective November 1, its stock price increased from $54.35 per share to $57.95 per share. Currently, Publix operates 1,251 stores in seven Southern states and employs about 225,000 associates.

‘Round The Trade

While it continued to experience softness in its physical grocery sales (primarily Whole Foods), that seemed to be a mere blip on its overall performance as Amazon once again posted stellar sales and earnings in its recently completed third quarter which ended on September 30. Overall sales for the e-commerce mega-merchant reached a record $91.6 billion with profits also skyrocketing to $6.3 million. And while the Seattle-based juggernaut experienced a 10 percent decline in physical store sales to $3.8 billion (which also included Amazon Go and Amazon Four-Star stores), Amazon’s online store sales (which includes orders that were fulfilled by Whole Foods but not purchased in those stores) increased an impressive 37 percent to $48.4 billion. Amazon’s “Prime Day” estimated $10 billion revenue boost was not included in those stats because they occurred last month in the company’s fourth quarter. We also have a bit of an update on last month’s news that “Godzilla” has purchased an equity stake in Grand Rapids, MI-based SpartanNash. Multiple sources have now told us that the 365,000 square foot distribution center that the wholesaler is leasing in Severn, MD will be used to supply the fledgling Amazon Fresh (and possibly Amazon Go) stores in the Mid-Atlantic. Based on our research, we have confirmed at least 10 future Amazon Fresh units coming to Maryland, New Jersey, Pennsylvania and Virginia including two sites that we recently learned about – Gaithersburg, MD and Havertown, PA. One more note about Amazon and Whole Foods Markets, which it purchased in 2017 for $13.7 billion in cash: according to Whole Foods CEO John Mackey’s new book, “Conscious Leadership,” Berkshire Hathaway chairman Warren Buffett passed on an opportunity to acquire WFM when the natural and organics merchant was searching for a buyer. According to Mackey, the “Oracle of Omaha” wasn’t interested in purchasing the Austin, TX-based chain because “it wasn’t a good fit.” The best fit of all was for Mackey who shared in the financial spoils when Amazon paid a whopping $13.7 billion in cash for the company…more financial news: Albertsons, which launched its IPO in June, last month posted strong second quarter results. Identical store sales rose 13.8 percent and overall sales grew to $15.8 billion, up from last year’s second quarter number of $14.18 billion. Although earnings dipped a bit ($284.5 million vs. $294.8 million last year), that dip was attributed to a large boost the Boise, ID merchant received when it entered into several sales/leaseback deals. The most prominent gain of all came from digital revenue which increased 243 percent. The retailer said it expects ID sales growth of 15.5 percent for all of fiscal 2020. Albertsons also announced that former CPG executive Mary Beth West (ex-Hershey, Mondelez and Kraft) has joined the company’s 13 other directors including co-chairs Leonard Laufer (Cerberus Capital) and the popular Jim Donald. On a more local level, it was great to hear Albertsons Mid-Atlantic division president Jim Perkins speak (virtually) at last month’s New Jersey Food Council meeting. Perkins provided an overview of the retailer’s new organizational structure which recently combined the Acme and Safeway/Eastern divisions which will now comprise 275 stores that garner annual sales exceeding $6 billion. He also told the remote audience of how Acme prepared and executed its pandemic plan, which resulted in high marks from vendors, consumers and even competing retailers in the critical areas of in-store service levels and associate morale. Key pre-planning priorities were aggressively purchasing product in February (before the pandemic created major chaos), increasing inventory at its Denver, PA distribution center, identifying and working with alternative supply sources, creating an operational plan that could be executed, and deploying office staff into the stores to help. The “Hillbilly from Philly,” who’s one of the most humble and gracious executives in the entire grocery biz, also went out of his way to thank the vendors for their “extra effort” during challenging times. When you see Jim in the trade (and who knows when that will be), ask him about his experience with Hometown Foods in trying to wheel and deal for some Pillsbury Flour during the height of the product hoarding that made flour and baking supplies difficult to find. If you’ve noticed more Funfetti items in Acme, Jim will explain why that is…after informally polling about a dozen retailers during the past month, all noted that they believe the “new norm” has arrived at least in terms of sales performance. “Since early August, our sales have been steady and allowed us to better project volume moving forward,” said a senior VP of one of the Northeast’s largest chains. “As long as restaurants remain at current seating capacity levels and schools are not fully open, I see a steady period of solid growth over the next three or four months. Until a there’s a safe vaccine that’s widely available, I feel the current buying patterns will remain in place.” Asked about his stores’ ID sales performance, he said that based on the most recent 13-weeks, those comps are about 15 percent positive. That number is in line with the other retailers we surveyed who said their recent same store sales were in the plus 12-17 percent range.

Local Notes

While its store openings are a bit more deliberatively restrained these days due to COVID-19 concerns, Wegmans debuts are still like no other in the business. The Rochester, NY-based uber merchant opened its long-awaited Tysons Corner (McLean, VA) store and what a beauty it is. At “only” 80,000 square feet and part of a huge mixed use project (Capital One Center), the new store has a chance to become one of the regional chain’s top sales per square foot (SPFS) producers once we get back to a more normalized living pattern. Another “urban” future store that could be the company’s best SPFS unit will be the merchant’s Wisconsin Avenue, NW (Fannie Mae) unit in DC which is slated to open in 2022. The Tysons opening represents Wegmans’ 104th overall store and fourth in Fairfax County.

Another impressive store opening to report is The Giant Company’s 51,000 square foot former Weis unit in the Swatara section of Harrisburg, PA that the Ahold Delhaize USA (ADUSA) brand acquired last year and spent about $5 million to extensively remodel. Meanwhile, at corporate ADUSA, the Northeast’s largest supermarket chain said it will now disclose the percentage of food sales derived from healthier products. This is certainly an ambitious project and the big merchant will be working with Partnership for a Healthier America to assess branded and private label products that achieve one, two, or three-star ratings as part of its proprietary Guiding Stars nutrition program. I’m assuming that multiple purchases of Oreos, Haagen-Dazs and Di Giorno pizza won’t qualify for sales disclosure.

Reading, PA-based Redner’s Markets Inc., said it will add new staff at every location throughout its Eastern Pennsylvania, Maryland and Delaware trading area. Like many other retailers, Redner’s has experienced new sales growth during the COVID-19 pandemic. The retailer also noted that its recently expanded “Redner’ Ready” online ordering service has contributed to revenue gains. That growth has impacted all Redner’s divisions – convenience (21 Quick Shoppes), grocery (44 Redner’s Markets) and warehouse – and will result in new employment opportunities. “We expect to hire full and part time, cashiers, stock clerks, prepared food workers, among others, in all of our stores to enhance our service model. We are excited about the growth we are experiencing and welcome all the new additions. We look forward to offering meaningful employment and continuing our essential service to our communities,” said Robert McDonough, the regional chain’s VP-human resources. Current benefits for Redner’s 4,800 associates include an Employee Stock Ownership Plan (ESOP), health plans, and financial incentives. The company has been conducting job fairs in select communities and is encouraging job seekers to come out and talk with a recruiter, store director, or go online at www.rednersmarkets.com to learn more about these opportunities. In addition to the job additions at its stores, Redner’s also announced increased starting wages for workers at both of its corporate warehouse facilities. Beginning on November 1, starting wages will increase to $15 per hour with a $500 signing bonus. Current and existing workers’ wages have also been adjusted. Redner’s, which was founded by the late Earl “The Chief” Redner, is currently celebrating its 50th anniversary. And just before presstime, Redner’s announced that it has named Jason Jones as its new controller. In his new post, Jones will work with the VP-finance in overseeing financial related matters for the company’s accounting team. Prior to joining the regional chain, Jones was with Central PA-based accounting firm RKL for 20 years.

Wakefern has rolled out its new Fresh to Table store-within-a store concept which focuses on offering its customers healthy meal solutions and other on-trend produce and fresh food offerings (prepared foods, heat & eat items, grab & go products). The Fresh to Table concept was launched at three ShopRite units in Greenwich Township, NJ (owned by the Colalillo family; Joe Colalillo is also chairman and CEO of Wakefern); Burlington, NJ (owned by the Eickhoff family); and Monroe, NY (a corporately-owned store that is part of SRS). If all goes well with the initial pilot, expect more ShopRites to add this new concept to its floor space. Village Super Markets, Wakefern’s second largest and only publicly-traded member, which operates stores locally in Lutherville, MD and Silver Spring, MD, posted solid second quarter numbers for the period ended July 24. The Springfield, NJ merchant saw overall sales increase 19 percent and profit grow by 37.2 during the 13-week period. Same store revenue rose 7.5 percent and digital sales soared 240 percent. With so many people leaving New York City (especially Manhattan) because of the COVID pandemic during the past seven months, Village’s acquisition of five Fairway Markets in May (four in Manhattan) has produced diminishing sales (but a profit gain) at those locations. In 2019, Village opened its first stores in Manhattan when it acquired Gourmet Garage’s three units. “Sales in Gourmet Garage and Fairway have declined significantly compared to historic levels due primarily to population migration out of Manhattan during the pandemic,” the company noted in its press release. The truth of the matter is that things are not likely to change anytime soon for those stores, which are also in need of remodeling and other upgrades. And unlike its high-volume suburban stores which have benefitted from Wakefern’s ShopRite At Home and other delivery services during the pandemic, those ancillary offerings aren’t as strong in Manhattan where FreshDirect and Amazon control the grocery delivery business.

Kehe, the Romeoville, IL-based organic, natural specialty and ethnic distributor which has increased its presence on both the East and West Coasts over the past five years, has opened a new 550,000 square foot distribution center in North East, MD. The new depot will serve Kehe’s customers (which include Acme, Safeway, Shaw’s, Sprouts and MOM’s Organic Markets) more efficiently with improved delivery times and increased speed-to-shelf of new items. The North East depot is Kehe’s 16th distribution center in its national network.

Two Baltimore-area based companies are expanding. Hunt Valley, MD-based McCormick will open its largest distribution center in the Sparrows Point area. The 1.8 million square foot facility will be located in the Tradepoint Atlantic Industrial Park and will consolidate multiple existing warehouses. The state-of-the-art depot is expected to be completed in the second half of 2022. And H&S Bakery, one of the largest privately-held (by the Paterakis family) businesses in the Baltimore area, will open its first retail bakery next summer not far from  its corporate headquarters on South Central Avenue in the Harbor East section of the city. The new bakery will be called Kneads and will specialize in scratch-made bread and baked goods.

We have a few notable deaths to report over the past month, including one of the coolest guys in the history of cinema (and a damn good actor, too), Sean Connery. The original James Bond was 90 when he passed. As the man who liked his martinis “shaken, not stirred,” Connery appeared as 007 in six “Bond” movies; he originally quit playing the debonair secret agent in 1967, afraid that his career would be stymied by typecasting. However, Connery was lured back for one final Bond film, “Diamonds Are Forever,” in 1971 when he was offered $1.25 million by the film’s producers. After that, Connery’s career as an actor really flourished. His acting chops could be seen in such movies as “The Man Who Would Be King” (1975), “The Rock” (1996) and as Irish cop Jimmy Malone in “The Untouchables” (1987), which was my favorite Connery role and the one that earned him an Oscar. Every teenage boy in the 1960s wanted to be Sean Connery.

And two other great musicians, albeit from a different brand of country music, have passed. Billy Joe Shaver, one of the wildest and most talented songwriter/singers to have ever come from the Lone Star State, was 81 when he died. Born in Corsicana, Shaver never completed the eighth grade; he worked as a cotton picker and in a sawmill, all while trying to become a professional musician. When he turned 30, he finally landed in Nashville as a songwriter but it was five more years before he broke through, writing such songs as “Old Five And Dimers Like Me” “You Asked Me To,” and, lastly, “Honky Tonk Heroes” for Waylon Jennings’ 1973 landmark album of the same name. Additionally, Shaver wrote the country classic “I’m Just An Old Chunk Of Coal” as well as my favorite tune of his, the autobiographical “I’ve Been To Georgia On The Fast Train.” In 2007, Shaver also shot a man near Waco after a barroom dust up but was later acquitted, helped by Willie Nelson’s court appearance as a character witness.

Jerry Jeff “Scamp” Walker, a musician who greatly influenced me, is gone at the age of 78. If you never saw Walker live in concert, you’ve missed something special and unique. He was a great storyteller and one of the best country songwriters of the past 45 years who was also backed by The Lost Gonzo Band, one of the best in the business. Having the talent to write a standard such as “Mr. Bojangles” alone is high praise. In fact, about 10 years ago when attending a David Bromberg concert, the great string player who was part of Walker’s band in the 1970s, recalled that he had recently visited “Scamp” in Austin. The morning that Bromberg arrived, Walker said he needed to drop some papers off at his lawyer’s office in downtown Austin. “As we were going up the elevator in a high-rise building, the Muzak version of ‘Mr. Bojangles’ started playing. I asked Jerry Jeff if he would qualify for a royalty on the song and he smiled at me and said, ‘Yeah, that’ll be another Rolex for my collection.’” If you never have listened to his “Viva Terlingua” (1973) album, ask Alexa to play it for you. Even she’ll be impressed.