While local stores will stay open, the Tampa supermarket chain will fight to remain competitiveby closing stores elsewhere and creating a more upscale image.
By LOUIS HAU
Published January 16, 2004
[Times photo: Willie Allen Jr.]
Kash n' Karry employee Iris Rivera assists shopper Tony Razzano at the Kash n' Karry store on Gandy Boulevard in Tampa.
TAMPA - Kash n' Karry, struggling to hold its own in the increasingly fierce competition for the dollars of supermarket shoppers, is closing 34 stores across Florida. But it's keeping all 67 stores in the Tampa Bay area, and even adding a few.
The closings announced Thursday will cost 1,500 Florida workers their jobs as the Tampa chain pulls out of the Orlando area and closes stores along the Atlantic coast and in north-central Florida.
Once the closings are completed by the end of February, the downsized Kash 'n Karry will have 103 locations and 10,000 employees, mostly in its core market in the bay area and along the Gulf Coast. The changes include renovations of many stores with an upscale motif. And company officials confirmed the retooling might even include getting rid of the Kash n' Karry name.
Company executives also said they remain committed to opening stores in St. Petersburg's Midtown district and Tampa's Channel District.
Calling it "a day of mixed emotions," Kash n' Karry spokeswoman Camille Branch-Turley said the chain's laid-off workers will receive severance packages and help in finding jobs. But she emphasized "we're looking forward to the future with some really exciting changes."
Asked about the prospects for a name change, marketing vice president Steve Smith said the company expects to release details by the end of June. There has been speculation in retail circles that Kash n' Karry might adopt the name of its more upscale sibling, Hannaford Bros., which operates more than 100 stores in New England and New York.
Kash n' Karry, Hannaford Bros. and Food Lion of Salisbury, N.C., are owned by the Delhaize Group, a Belgian food retailer.
Smith declined to comment on a potential name switch to Hannaford, but he praised that chain's ability to offer "the best value and the highest quality."
"That is what Hannaford does better than anybody," he said.
Branch-Turley said the company plans a 50 percent increase in capital expenditures in 2004 to make extensive renovations at 14 stores and to open six, but she declined to be more specific.
Kash n' Karry's retrenchment and retooling comes after its share of the grocery market in Hillsborough, Pinellas, Pasco and Hernando counties fell from 23.5 percent in 1998 to 16.9 percent in 2003. In addition to contending with the continued strength of market leader Publix Super Markets Inc., Kash n' Karry has been hurt by the rapid expansion of Wal-Mart's Supercenters, which add a full-service supermarket to the discount giant's stores.
"What's happening in the supermarket industry is that people are having to position themselves against Wal-Mart," said Neil Stern, a partner with McMillan & Doolittle, a retail consulting firm in Chicago. "If price is the only proposition you're offering the consumer, you're going to be in big trouble. It's hard or impossible to match them on price."
As a result, Kash n' Karry probably had little choice but to try to move upmarket, he said, even though that will put the chain in more direct competition with Publix.
"As formidable as Wal-Mart is on price, Publix is just as formidable a competitor on quality and service," Stern said. "There's not much open ground that somebody's not competing for right now."
To preview Kash n' Karry's planned changes, Branch-Turley took reporters on a tour Thursday of the chain's supermarket at W Gandy Boulevard and S Manhattan Avenue in Tampa, which underwent an extensive renovation that was completed in November.
New features include a greatly expanded selection of organic and health-oriented foods; a larger selection of wines, some of it displayed on wooden racks; and a redesigned meat counter with an open work area where the staff has been retrained to answer customer queries and offer cooking tips.
Design touches include new purple and aqua-green aisle signs and a new facade. To heighten the visibility and safety of its liquor section, which under state law is required to have a separate entrance, the store has installed windows in the separating wall.
Kash n' Karry's intention to move ahead with the Channel and Midtown locations will keep intact development projects in those neighborhoods. In the Channel District, a Kash n' Karry supermarket is expected to anchor a residential and retail development next to the Channelside entertainment complex.
In St. Petersburg, the City Council agreed last year to spend more than $1-million to assemble the land for a shopping center anchored by a Kash n' Karry in economically struggling Midtown. Developers hope to break ground this spring and open the store by June 2005.
"It sounds to me as though this may actually strengthen the deal," said Goliath Davis, St. Petersburg's deputy mayor. "They are looking at their business plans and deciding where their focus is going to be. And we are included in that focus. That's a positive."
- Times staff writers Mark Albright and Carrie Johnson contributed to this report, which also used information from Times files. Louis Hau can be reached at hau@sptimes.com or 813 226-3404.
