Publix Cutting Prices

LAKELAND | Publix Super Markets Inc. appears to be battling its high-price reputation with a new effort to cut prices on staple items.

Prices on milk and other staples are being "dramatically lowered" for periods extending beyond traditional sales, spokeswoman Shannon Patten said. Patten would not discuss specific price reductions or items covered but one current promotion in the Tampa Bay area features Publix milk at $3.79 per gallon. It sold for $4.69 last week at one Lakeland Publix.

"We understand that people are feeling the crunch of the economy and we are always trying to find ways to save customers money. So what you will see is we've lowered prices on items that customers use the most," Patten said.

This year Publix also has stepped up promotion of "buy one, get one free" offers and plans to distribute brochures with tips for saving on food and household costs, Patten said.

The new strategies are somewhat of a departure for Lakeland-based Publix, which has largely built its reputation on customer service and clean, attractive stores rather than sharp discounts.

That philosophy was echoed by Chief Executive Officer Ed Crenshaw during February's annual meeting of the Lakeland Chamber of Commerce, when he said, "We don't claim to have the biggest stores or the lowest prices. Our position in the market is very simple: high quality and great service."

Publix held off earlier this summer when some grocers rolled out incentives for customers with economic stimulus checks, but such campaigns paid off for competitors like Cincinatti-based Kroger Co. (a formidable Publix rival in Georgia), which in late June announced a 15 percent gain in its first quarter profits, beating analysts' expectations.

Wal-Mart, second only to Publix in Florida market share, in May reported record earnings and sales for its first quarter.

Publix, meanwhile, announced earlier this week that profits slipped 3.5 percent to $295.8 million during the second quarter, while same-store sales were up just 1.3 percent.

Analysts say that shoppers are likely "trading down" to Wal-Mart and other discount chains as food prices rise, and Florida consumers will have even more options this fall as German discount chain Aldi opens 25 stores in Central Florida, including one in Lakeland.

"While it's traditionally true that food is the last place consumers cut back, they can and sometimes do have to cut back when times get tough," said Neil Stern, a principal with Chicago-based retail consulting firm McMillan Doolittle, in an interview with The Ledger earlier this week. "Wal-Mart right now seems to be positioned pretty well as consumers trade down and look around for value."

[ Kyle Kennedy can be reached at kyle.kennedy@theledger.com or 863-802-7584. ]