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Letter to the editor

Rest isn't part of Sweetbay's recipe

The transformation from Kash n' Karry was just the start for new-look Sweetbay.

By MARK ALBRIGHT, Times Staff Writer
Published October 4, 2007

Ted Bilski of Apollo Beach looks over fruits and vegetables in Sweetbay. The yellow stickers identify nutritious selections.
	[Ross Mantle | Times]

ADVERTISEMENT [Bill Serne | Times (2005)] Shelley Broader, president and chief executive of Sweetbay, was named "Retailer of the year" by a trade magazine for her efforts in turning around the grocer.

TAMPA -- No sooner had the last Kash n' Karry been converted to a Sweetbay Supermarket in August than the Tampa grocer felt compelled to cut prices on 1,000 of the most commonly purchased groceries and start crowing about "Locked in Low Prices."

"We weren't getting credit for low prices because people thought we were more like Publix," said Steven Smith, vice president of merchandise.

A glance around the competitive landscape shows why. Publix was running $5-off-your-next-shopping-trip coupons in newspapers. At Winn-Dixie, it was $10 for loyalty card members. Then, Albertsons dropped its Preferred Card outright, hoping to lure any cherry-pickers drawn by deals.

In short, Sweetbay's new-look stores have been lauded by experts as lifting a dying chain out of the ashes. Grocery Headquarters, a trade magazine, this week named Sweetbay chief Shelley Broader the "retail executive of the year." But anybody who figured Sweetbay's three-year transformation is a permanent fix missed the fierce knock-down, drag-out rattling through the supermarket industry.

"For us, this is only the beginning, not the end," said Broader, whose Sweetbay chain generates about $1-billion in sales from 104 stores spread from Naples to Gainesville. "Right now there's only one thriving traditional supermarket chain here Publix. As a brand, we're 16 months old. The others have brand new owners (Albertsons) or just came out of bankruptcy (Winn-Dixie). We aim to be the second thriving traditional supermarket."

Indeed, Wal-Mart's march into the food business fueled the only market share gains in 2007 among big Tampa Bay area food retailers (See chart at right).

It hasn't been a painless transition. Sweetbay's Belgian parent, Delhaize Group, poured about $250-million into renovations, a dramatically expanded food offering and a corporate overhaul.

In places with a growing population like Florida, supermarkets lose market share if they stop opening stores. Sweetbay runs 50 fewer than four years ago. While Sweetbay can boast 100 percent of its stores were remodeled in the past three years, it must commit to a staggered schedule of future remodelings or face the expense of doing them again in seven years, the industry standard.

After years of shrinking what had been a deteriorating store base, Sweetbay is getting the cash to open four to five stores annually and set up a remodeling schedule. It's a pace not seen since the 1990s. Broader doesn't see stores beyond the current footprint for a few years unless one of her competitors stumbles and creates an opportunity.

While the parent company does not break out Sweetbay's performance, company officials say sales gains in comparable stores and traffic counts are up since the sharper price message.

"Brand-building doesn't happen overnight," said Pierre-Olivier Beckers, Delhaize's chief executive, in a conference call. "We recognize, certainly, that there is yet much to do to reach profitability."

Managers concede they took their eye off the ball on their everyday low-pricing strategy in dry groceries, those vast center aisles that provide 72 percent of a grocer's sales volume, according to Willard Bishop Consulting. Sweetbay's rivals are so-called high/low grocers who pare prices on common items as low as they need to be competitive, tack the lost profit margin onto prices of slower-selling items and lean on deep periodic vendor discounts to burnish their pricing image.

In contrast, Sweetbay promises prices almost as low as the deep supplier-discount deals all the time.

If shoppers figure it out and respond, it joins another initiative resonating with shoppers.

Borrowing a program developed by corporate sibling grocery chain Hannaford Brothers in New England, Sweetbay's Guiding Stars is credited with boosting sales of nutritional foods.

About 6,000 of the 40,000 items in a store are rated as nutritional with grades of one to three stars displayed on shelf tags.

Hired health professionals based the ratings on 100-calorie servings. Foods get points for vitamins, minerals and dietary fiber. They lose points for cholesterol, trans fats, saturated fats, sodium and sugars.

"Shoppers have found it a wonderful tool to make healthy choices that is independent of the food companies,"said Broader. "I did research years ago about how people say they want to eat right but really don't. Thanks to better education, we're proving that now they will."

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Sweetbay's Guiding Stars program

The labels, which rate products by their nutritional value, resonated with shoppers, changed their behavior and boosted sales of the products.

• 61 percent say they are eating healthier than a year ago.
• 50 percent are aware of the Guiding Star labels.
• 42 percent of those aware of them say they follow them sometimes.

Unit sales since the star-studded program started in March showed:

• Sales of ground beef with stars are up 18 percent while sales of ground beef with no stars are down 1 percent.
• Breakfast cereals with stars rose 5 percent while those without were flat.
• Yogurts with stars grew 8 percent; no-star yogurts dropped 5 percent.

Source: Sweetbay Supermarket

[Last modified October 4, 2007, 01:15:33]