Economy puts Publix under pressure

LAKELAND, Fla. The economic forecast continues to look overcast as more and more pressure is placed on corporate profit margins — Publix, one of the Sunshine State’s leading grocers on Friday reported a 6.3% decline in earnings on sales growth of 2.2%.

“The economy continues to affect our results and stock price,” stated Publix CEO Ed Crenshaw — the company’s privately-held stock sold only to Publix employees fell $0.65 to $15.55 with the announcement. “We look forward to an improving economy,” Crenshaw said.

Publix operates 1,005 supermarkets, 720 of which are in Florida, a state that relies heavily on tourism. It’s not so much that fewer tourists equals fewer shopping trips to the local supermarket, as it is fewer tourists equals fewer tourism jobs — jobs that help feed the local economy.

The Florida unemployment rate is currently 9.7%, according to the Bureau of Labor Statistics for March, compared to 8.5% nationally. And that unemployment is expected to continue to pressure supermarket sales.

“The industry is at the beginning (of) its sales challenges rather than toward the end," Pali Research analyst Robert Summers stated in a recent research note. And that means that grocery sales are expected to “drop further and remain negative longer than they did during the last downturn.”

And while all the media attention currently surrounding the possibility of an H1N1 flu pandemic certainly doesn’t bode well for tourism, news reports regarding Florida’s inadequate supply of antivirals may actually prove to be a boost of sorts for Florida pharmacy operators, should that need arise. According to reports, Florida only has 120,000 courses of Tamiflu in its stockpile, compared with the 1.7 million courses the federal government recommended the state purchase to prepare for a pandemic. Federal stockpiles are designed to supply flu medicine to 15% of any given state’s population.