Publix now owns nearly a third of its stores, and profit margins keep rising

March 02, 2018
Scott Iskowitz/AP
(AP Photo/Scott Iskowitz, File)

Reflecting an aggressive shopping spree over the past decade, Publix Super Markets now owns nearly a third of its stores.

Separately, Publix said it was giving raises to its 193,000 employees, although it didn’t disclose the size of the raises. Amid a strong job market and a windfall from tax cuts, many retailers have boosted wages.

As of Dec. 31, Florida’s dominant grocer owned -- rather than leased -- 371 of its 1,167 locations, or 31.8 percent. In 2007, Publix owned just 11 percent of its stores, according to a Palm Beach Post analysis of Publix’s financial filings.

Related: Publix pays $72 million for shopping centers in Wellington, Jupiter

Publix doesn’t comment on its real estate strategy, but the trend couldn’t be clearer.

The company said it plans to invest $1.53 billion in 2018 to build new stores, remodel old ones, upgrade technology and buy shopping centers it anchors.

Publix had nearly $1.5 billion in cash and short-term investments at the end of 2017.

Meanwhile, Publix’s store count, sales and profit margins continue to grow as Winn-Dixie shrinks and as the Lakeland-based grocer fends off other potential competitors, such as Walmart and Amazon.

Publix reported sales of $34.6 billion for 2017 and a profit margin of 6.6 percent -- an unusually high figure for a player in the notoriously low-margin grocery business.

Related: Publix routs rivals, eyes competition from Amazon

By contrast, grocery giant Kroger showed a margin of just 1.1 percent for the first nine months of 2017. Unlike Publix, which has a comfortable lead in its main market, Kroger is waging supermarket wars in parts of the country. Also unlike Publix, Kroger sells gas, a notoriously unprofitable endeavor.

Publix also got a boost to the bottom line thanks to the corporate tax cut signed in December by President Donald Trump. The tax package cut Publix’s tax bill by $224 million in 2017.

Publix divulged the new details in its annual report, released late Thursday.