Dive Brief:
- Publix announced Monday its sales rose 1%, to $15.7 billion, and comparable-store sales decreased 0.5% during its second quarter, which ended June 27. The results mark the fourth consecutive quarter of slowing sales growth for the Florida-based grocer.
- The grocer’s net earnings of $1.7 billion for the quarter were up more than 20% compared with the same period last year.
- The grocer said that reduced drug prices tied to the federal Inflation Reduction Act and shifts in consumer spending in response to economic conditions depressed its sales growth.
Dive Insight:
A year ago, Publix’s sales and comp-store sales rose by 7.3% and 6%, respectively, during its second quarter of fiscal 2025. Since then, though, sales growth has slowed, with comp-store sales now turning negative.
Publix joins a bevy of other retailers, including Albertsons and Walmart, that have seen their pharmacy sales take a hit due to the Inflation Reduction Act. Under that law, reduced prices for 10 major drugs, including diabetes medications Jardiance and Farxiga as well as blood thinner Eliquis, went into effect at the start of this year. For grocers that have relied on their pharmacy businesses to juice sales growth, the lowered drug prices have reduced their pharmacy revenue.
Publix said the pharmacy reimbursement changes partially offset new supermarket sales, leading to its 1% sales growth in Q2. The grocer also said that sales took a hit from “economic conditions impacting consumer spending.”
During Q2, Publix announced it joined Medicare GLP-1 Bridge, a temporary federal program that allows eligible Medicare customers to get select GLP-1 prescriptions for a flat rate of $50 per month at the grocer’s pharmacies.
In a Securities and Exchange Commission filing, Publix said it opened 16 stores, remodeled 56 and closed eight during the six months ended June 27. The grocer runs approximately 1,440 supermarkets in the Southeast.
