Walmart Losing To Quirky Florida Based Publix – Employee Owned Company Touted By Forbes As ‘Wal-Mart Slayer’
Walmart, its very name brings with it an image of a soulless corporation, a company which abuses its employees down so much that they will rip the company to shreds on their own internal website when asked. A company reliant on government assistance to keep its employees able to even eat. It is a recipe for disaster. And those who follow the teachings of Milton Friedman and other objectivist economists would try and explain that this is absolutely required for a successful company. But don’t tell that to Publix, which now sits as the most profitable grocer in the United States, holding a remarkable 52.8% of the grocery market in highly competitive Florida, against Walmart’s 14.5%.
How does Publix do it? Are they even more soul crushing, seeking to demoralize employees to the point that they are wage slaves, like McDonald’s does? The opposite, Publix is an employee owned corporation. You read that right, employee owned. The company does well, then the employees do well. This gives your average employee of Publix a stake in improving the companies bottom line, thanks to regular dividends. They do this by retaining customers, through excellent customer service. Even Forbes magazine has come to recognize that the Publix business model is a “Walmart Slayer.” And to add to the fears of the Beast of Bentonville, Publix is expanding into new markets, just as other companies are copying the Publix model.
Publix, through its focus on its staff and customer service, is able to beat Walmart’s shareholder returns, with a compound growth of 18% per year, as opposed to Walmart’s 10.5%. Of course, Walmart is a publicly traded company, while Publix is owned by its employees, so if someone wishes to invest in Publix, they would first need to begin working for Publix, and their rate of ownership is based on their wages. This encourages the hardest workers, those who dedicate themselves to the company, giving them a real stake in the company as they labor.
Publix began 1930 by George Jenkins, and was mocked by other grocers when he opened for offering amenities like chairs to relax in and air conditioning for the customers, combined with award-winning customer service. His store prospered during the Great Depression due to this employee and customer centered model of doing business. Today, you still find this focus, with Publix offering service to their customers such as their Youtube channel full of helpful cooking tips and recipes, a specialized natural and organic line of Publix brand goods, even having a small sit down cafe which remains highly popular with its customers. The Publix baggers walk the customers groceries out to their cars, and refuse tips. It is all part of the Publix experience.
The tragedy for Walmart is that the very model which Publix is an excellent example of, was once touted by Sam Walton himself. He firmly believed that workers who were invested in the company became more motivated, and motivated employees brought in happy customers. Sam Walton would be spinning in his grave if he were to read what the employees of his company thought of it today.
One may think that Walmart may operate a higher profit margin, but then they would be wrong. Forbes covers how Publix has a net profit margin of 5.6%, far higher than Walmart’s 3.8%. Other companies engage in an employee-first approach, such as Trader Joes and Costco, but Publix does this with an employee-owned focus, giving them a leg up over the competition.
Walmart may have met its match, and its name is Publix.