Publix continues to feel the impact of major customer issues it has struggled to shake off in recent months.
The grocery chain’s difficulties come as it grapples with a challenging economic environment and recent customer pushback against its in-store policies.
Publix, for example, faced calls for a boycott in May after saying it would only allow law enforcement to openly carry guns in its stores. It also faced further criticism from customers in August when it began lifting the 10-item or less limit on express checkout lanes in Florida.
Most recently, Publix’s buy-one-get-one-free (BOGO) deal came under scrutiny in September when it confirmed differences in the promotion from state to state.
Florida shoppers must purchase one BOGO item to get the second for free. However, in other states, if a customer only wants one BOGO item, they can choose to buy it at half price.
Publix sales drop again
Against this backdrop, Publix’s sales continued to decline. The grocery chain revealed in a new release that its comparable store sales fell 0.6% annually in the third quarter of 2026.
Publix said the sales decline was “primarily due to changes in MFP (Medicare Maximum Fair Price) and the impact of economic conditions affecting consumer spending.” The company said in its previous earnings report that comparable store sales fell 0.5% year over year in the second quarter.
The changes to Medicare’s Maximum Fair Price that Publix cited took effect Jan. 1, lowering the prices of 10 prescription drugs and changing how pharmacies are reimbursed for those drugs.
Read more: Publix plans major store changes, and customers will soon notice
In addition to another decline in sales, Publix reported third-quarter net income of about $1.1 billion, down from $1.2 billion in the same period in 2025.
Publix CEO Kevin Murphy acknowledged in a press release that consumers are facing economic headwinds.
“We know many of our customers are feeling the impact of a challenging economy,” Murphy said. “I am proud of the excellent service and care our employees have provided to our customers during this time.”
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Publix faces growing price sensitivity among shoppers
Publix’s ongoing sales challenges come as the company has been facing criticism from shoppers on social media about its high prices.
Americans across the country are indeed paying more on groceries this year. Data from the U.S. Bureau of Labor Statistics’ Consumer Price Index showed that household food prices increased by 1.8% year-on-year in September.
U.S. consumers are changing their grocery shopping habits as prices rise, putting additional pressure on grocery retailers.
More grocery news:
- Target raises prices on annual grocery deal for holiday shoppers
- Shift in customer behavior costs Kroger $12 billion
- Publix works to transform customer behavior
An October survey by the Acosta Group’s Affordability Tracker showed that 75% of Americans said groceries put more pressure on their budgets than a year ago. Many people view housing, transportation, health care, insurance, and utilities as important expenses that influence their shopping decisions.
Due to high grocery prices, 43% said they have purchased fewer non-essential items in the past six months, while 43% said they have spent more time looking for deals. Additionally, 38% are choosing to buy more store brands, 35% are shopping at lower-priced stores, and 30% are buying cheaper food and household goods.
“The affordability recovery has reached a point where small gains in purchasing power provide little breathing room for households,” Colin Stewart, executive vice president of business intelligence at Acosta Group, said in a release.
He continued: “Shoppers are weighing grocery purchases against everything else their incomes need to cover, and the habits they developed during the inflation surge remain practical ways to manage that stress.”
Publix struggles to compete with major rivals cutting prices
As shoppers become more cautious about spending, Publix faces increasing competition from grocery retailers offering lower prices.
Walmart held the largest share of U.S. grocery sales in the 12 months through September, with a 20.3% market share, according to Numerator data shared with TheStreet. An increase of 0.2 percentage points over the previous year.
Costco held the second largest share at 8.4%, compared with 7.9% a year earlier. Kroger ranked second with a market share of 8.2%, followed by Albertsons with a market share of 4.5%. Publix ranked fifth, maintaining a 4.1% share from the same period in 2025.
All retailers with a larger market share than Publix have cut prices this year to attract more shoppers. For example, Walmart revealed during its August earnings call that it used tariff refunds to lower prices on thousands of items in the second quarter of fiscal 2027.
Costco has taken a similar approach. Chief Executive Ron Vachris said on an earnings call in September that the company primarily used the $184 million it received in initial tariff refunds to lower prices on various products in its warehouse clubs during the fiscal fourth quarter.
In May, Kroger unveiled plans to lower prices on thousands of items in its stores. Albertsons also accelerated price investments in July to better compete for shoppers.
R5 Capital retail analyst and CEO Scott Mushkin said in an October Grocery Dive report that Publix’s competitors in grocery retail, particularly Walmart, Amazon and Costco, are “taking a lot of share in a market where they don’t have any share.”
“This is a very difficult macro environment,” Mushkin said. “I think this is the hardest time traditional supermarkets have faced in 30 years.”
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