Does Kroger Own Publix? A Deep Dive into Two Grocery Giants

With nearly 3,000 stores across 35 states, Kroger is one of the largest supermarket chains in America. Publix, though smaller with 1,280 stores, dominates across the Southeastern U.S. This leads many shoppers to wonder – does Kroger own Publix?

The short answer is no, Kroger does not own Publix. Despite being two grocery behemoths, Kroger and Publix continue operating as completely independent companies in 2024.

But this surface-level answer glosses over the complex dynamics between the two chains. This article will analyze if Kroger owning Publix could ever happen, and why it hasn‘t yet.

Kroger‘s History of Acquisitions

Kroger has an extensive history of acquisitions dating back decades, indicating the chain is always looking to expand:

• 1983 – Kroger merges with Dillon Companies, acquiring chains like King Soopers, City Market, and Gerbes.

• 1999 – Kroger absorbs Fred Meyer and its subsidiaries for $13 billion.

• 2013 – Harris Teeter comes under Kroger ownership in a $2.5 billion deal.

• 2015 – Kroger purchases Roundy‘s for $800 million, adding Mariano‘s and more.

In total, Kroger has acquired at least 20 regional chains since the 1980s. For a company laser-focused on growth, Publix seems like an obvious target. Yet a deal hasn‘t happened. Let‘s look at why.

Publix‘s Employee Ownership Structure

What sets Publix apart from other grocery chains is its employee stock ownership. Both current and former Publix employees hold approximately 19% of the company‘s shares.

For comparison, among S&P 500 companies, employees control an average of just 3.9% of shares. Publix’s employee ownership is nearly 5x higher.

This uncommon structure would likely prevent Publix from agreeing to a buyout. Employees would be reluctant to relinquish their control over the company culture and future.

Comparing Key Financial Metrics

While Kroger‘s revenue is 2.8x higher than Publix, the latter has a stronger profit margin. And Publix achieves nearly 20% of Kroger‘s revenue with less than half the stores, indicating higher sales productivity per location.

From a financial perspective, Publix punches above its weight class, despite Kroger‘s much larger size. Publix likely sees more value in remaining independent.

Differing Corporate Cultures

Kroger leans into a traditional corporate structure – highly focused on expansion, mergers, and streamlined operations to drive economies of scale.

Publix cultivates a markedly different culture described as “fanatical customer service”. Nearly every Publix decision ladders up to improving associate and shopper satisfaction.

Blending these two opposing philosophies via an acquisition could prove extremely challenging. And Publix may worry about losing its identity under Kroger ownership.

Regional Competitive Dynamics

In regions like Florida and Georgia where Kroger and Publix stores overlap, Publix commands a dominant market share of 49% and 43% respectively.

Kroger likely wants to keep Publix independent rather than fully absorbing those markets. Eliminating Publix would give Kroger a near-monopoly in the Southeast – something unlikely to get past regulators.

What Are The Antitrust Implications?

If combined, Kroger and Publix would control over a 70% market share across multiple Southeastern states.

Experts agree this degree of consolidation and reduced competition would raise serious antitrust concerns. It could be similar to the blocked merger between Staples and Office Depot in 1997.

The FTC would likely move to block any merger unless the combined company agreed to substantial divestitures.

Publix: Staying Fiercely Independent

As employee-owned companies are bought up by larger corporations, Publix remains committed to keeping decision-making in the hands of associates and maintaining its unique culture.

Despite Kroger‘s acquisition spree over the decades, Publix continues operating on its own terms. The chain seems content staying southeastern focused rather than expanding nationwide under a new owner.

While anything is possible long-term, a Publix acquisition appears unlikely without major shakeups. For now, consumers can continue enjoying the choice between two excellent grocery options.