1. Publix Supermarkets, Inc.
Accounting 610
Section P
Dr. Robinson
October 22, 2013
Publix Supermarkets, Inc.
By:
Chirag Wadhwa
Courtney Peffley
Pravir Yadav
Siddharth Mehendale
William Louey

2. Agenda
Introduce yourself and other group members, and discuss the agenda
Overview of the Industry, the company, and its strategy
Review of financial performance - highlights from each category of ratios.
Present high-level summaries instead of details on each ratio
Focus on areas of concern, and/or where the company is doing exceptionally well
Recommendations (at least 3) for improving the company’s performance
Why you believe your recommendation will work
For each recommendation, clearly explain which aspect(s) of the business will improve (e.g. revenue, gross margins, turnover, RNOA etc.) and
Equity Valuation – brief overview of assumptions, and your recommendation to investors
Summary

3. Overview of The Industry

4. Company

5. Porter’s 5 Forces

6. SWOT Analysis

7. PEST Analysis

8. Financial Analysis

9. Asset Management

10. Profitability

11. Liquidity

12. Debt Management

13. Altman Z Score

14. Market Value Ratios

15. Equity Valuation

16. Recommendations to management

17. Recommendation # 1 1991: Publix expands outside of home state Florida
Expand strategically
1991: Publix expands outside of home state Florida
Currently: Georgia, Alabama, South Carolina, Tennessee
2014: New stores launch in North Carolina
Publix has proven business model for expansion into other states

18. Recommendation # 1 Target the Hispanic niche market
Expand strategically
Target the Hispanic niche market
Growing Hispanic- American population and growing buying power
Key States: Texas and California

19. Recommendation # 1 Expand strategically
Texas and California: over 50% Hispanic population

20. Recommendation # 1 Expand strategically
Currently 8 locations in Florida; Miami-based
Publix stores catered to Hispanic community; Spanish, with local tastes and preferences

21. Recommendation # 1
Expand strategically Publix is currently successful with large Hispanic population in the Southeast region USA

22. Recommendation # 1 Expand strategically
Targeting niche demographic- gain more market share before competitors; long run benefits
Increase sales volume and higher profit margins
Differentiation strategy- catering to Hispanic community

23. Recommendation # 2
Increase revenue and profits by in-store value additions
Publix is #1 on American Consumer Satisfaction Index- 40% higher profit margins than Wal-Mart(low-cost strategy)
Continue to differentiate: enhance the customer experience by adding additions to increase sales and profitability

24. Recommendation # 2
Increase revenue and profits by in-store value additions
Remodel Older Stores:
Provide more upscale shopping experience, richer value
Better look- higher pricing differentiation

25. Recommendation # 2
Increase revenue and profits by in-store value additions
Pharmaceuticals
Free antibiotics (Florida)
Match Wal-Mart $4 generic drugs
Not competing on low-cost strategy overall- lure Wal-Mart grocery shoppers; take small % from Wal-Mart while maintaining Publix’s brand image- increase revenue and profits; realized value- pay more

26. Recommendation # 2
Increase revenue and profits by in-store value additions
Alcohol
All stores to have stand- alone liquor stores in addition to the grocery aisles
Increase sales and profits; higher-end customers who are willing to spend more
Suppliers: local wines and breweries- convenience

27. Recommendation # 3 Retain private equity
Publix is the largest employee owned supermarket chain with employees owning 85% of equity
Only Publix employees may purchase stock
Employee equity leads to better customer service & customer retention

28. Recommendation # 3 Retain private equity
Publix: Forbes list of best workplace
First on Consumer Satisfaction for
supermarkets
Publix has cash and assets for
Expansion without needing to
raise equity funds by trading
publicly
Retain private employee equity to maintain strong company culture and brand image

29. Summary
Publix Super Markets, Inc. is the largest private employee owned supermarket chain
Features first on the American Customer Satisfaction Index for supermarkets.  
Publix has a competitive edge through customer experience and quality products = charge premium pricing.

30. Summary
Steady gross profit margin of 28%, which is above industry standard and its closest competitor Safeway Inc. (SWY)
Publix has maintained a constant ROE while Safeway’s ROE dropped by 30% during the year This can be attributed to lean operations, brand loyalty, and product differentiation.

31. Summary
Quick ratio for Publix in the year 2012 is higher than Safeway and the industry average
Generating cash quickly to pay its short-term obligations
Very low debts and is primarily equity financed
Publix has no interest expenses and has the ability to make investments and pay off liabilities using cash generated from business

32. Summary
Basic and diluted EPS has grown despite the recession, indicating the strong financial and strategic position of the company
Strong growth plans that include investments to expand in North Carolina; increasing its leverage and taking on debt for the first time

33. Summary Well poised to accelerate growth and gain higher market share
Recommendations to improve the value and growth of Publix:
Recap
Target niche market segments
In-store value additions
Retain private equity