Publix Locks Up 3 Brickell Locations Cornering Market In Business District
By Frank Norton
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Brickell’s third supermarket, to open at Mary Brickell Village in 2003, will give consumers three convenient shopping options: Publix, Publix or Publix.
The chain’s existing location at 134 SW 13th St. will be joined in December by a second store on Southwest Third Avenue and the third next year between Southwest Ninth and 10th streets. Publix has not announced an opening date for the third site.
Though Brickell residents and workers are eager for stores to share the traffic burden that crowds the 13th Street, or Coral Way, store, industry watchers aren’t sure consumers win in the end.
"In any industry, if you have one company controlling that industry in an area, it decreases competition," said Mario Goderich, director of consumer protection at the Consumer Services Department, a Miami-Dade County government office.
With 550 stores in Florida, Lakeland-based Publix wields a 52.9% market share in South Florida and 44.9% share in Miami-Dade County, according to Market Scope 2002 – a publication of Connecticut-based Trade Dimensions, a research group. The company has even higher saturation levels in upscale communities like budding Brickell and Aventura, where it operates four stores within a 3-mile radius of each other.
In Brickell, apart from lobby shops selling mostly bread, beer and milk, no competitors are seen entering the market.
Mr. Goderich said such unrivaled clustering could lessen both product selectivity and price competition, leaving consumers with fewer, higher-priced items in time.
"Obviously when you offer variety and availability to consumers it stimulates price competition" between brands, he said referring to localized promotions that neighborhood competition creates.
"Without that competition there may not be incentive to do so," he added.
Jacksonville-based Winn-Dixie, with 114 stores in South Florida, would seem to be a natural competitor. But a company spokesman would not discuss real estate decisions or whether the grocery chain has ever vied for a Brickell site.
Colorado-based Wild Oats, which operates four premium priced organic food stores in South Florida, said it has not considered Miami’s Brickell region. And Sedano’s Supermarket is not considered a viable entrant for Brickell because it caters to specific demographics, particularly Hispanics.
Though some industry experts said Publix is carving a mini-monopoly in the Brickell area, they also said such dominance is both fair and common for a company with overwhelming market share.
Miami Commissioner Johnny Winton said the chain’s monopoly on Brickell is not only perfectly legal, "it’s brilliant," even if consumers lack price and product choices.
"That’s how the free-market system works: He who gets a corner of the market gets to dictate the rules."
Doron Valero, president and CEO of Equity One Inc., which owns and develops grocery-anchored strip-malls in South Florida, agrees, saying Publix shows prowess when it comes to scouting and closing on prime locations.
"They do have a tendency to lock in a market when they get one store up. It’s largely a matter of their web of real estate brokers and developers being able to pull it off," he said.
According to Jose Calvo, chairman of the Florida Retail Federation, Publix has the best site-market research division of any retailer in the state. He also said the chain most effectively optimizes sales per square foot by accurately predicting demographic, traffic and product trends.
Founded in 1930 in Winter Haven and now based in Lakeland, the employee-owned company has 711 supermarkets in Florida, Georgia, South Carolina and Alabama, which together in 2001 grossed more than $15 billion.
Mr. Calvo and others said the Coral Way Publix is the highest grossing for sales per square foot in the chain, though company spokeswoman Maria Rodamis would not confirm that.
One Brickell businessman said that by dominating grocery sales in Brickell, the chain is effectively branding itself into residents’ consumer habits. That’s good competitive strategy, Mr. Valero and others said.
"To me it says they’re recognized in an up-and-coming area," Mr. Calvo said, "and that other competitors haven’t moved fast enough."
The Brickell market area, bound by the Miami River, I-95, Biscayne Bay and Southeast and Southwest 26th Road, has about 7,000 condo and rental units planned or under construction. The banking- and office-heavy district also draws thousands of workers daily, producing a steady flow of customers who may want to buy groceries on their way home.
Mr. Doron said the area’s diminishing land space and high real estate prices will significantly raise entry barriers for potential competitors. That could disappoint residents.
"I would like to see other stores because we don’t have selectivity," said Regina Moore of 150 SE 25th Road.
"What I miss most in this area are fresh markets. I prefer to go to specialty stores rather than one place for everything. Different stores have different selections," she said.
Brian Gale, who heads the Brickell Area Association, a consortium of business interests, said Publix is a good match for resident consumers but should be complemented by alternatives.
"If there’s no competition in a given area, I’d be hard pressed to see the consumer winning," he said. "But these things usually tend to even out over time." Top Front Page About Miami Today Put Your Message in Miami Today Contact Miami Today © Copyright 2002 Miami Today designed and produced by Green Dot Advertising and Marketing