There were recent clues that Tampa, Fla.-based Kash n' Karry was retooling, but none that suggested the major transformation the chain has now decided to undertake.
Late last year, the Delhaize America unit's president and chief operating officer, Shelley Broader, told me during an interview that the retailer was pursuing a new avenue. "There's an incredibly exciting opportunity in Florida," she said at the time. "It's a very fast-growing market with a big influx of population. ... We are now starting to execute around a niche that is not being filled by anyone in the market."
Broader talked about a new emphasis on ethnicity, seasonal business, produce and other fresh foods, supported by extensive consumer research.
Jump ahead to January of this year, when another major piece of the Kash n' Karry future came into place. The chain said it would close or sell 34 underperforming stores, primarily in the Orlando market and eastern Florida. The move would refocus operations on the core territories of Tampa and the western region of the state. That would leave the chain with just over 100 units and plans for 20 remodels or openings in 2004.
It wasn't until earlier this month, however, that the larger scope of Kash n' Karry's plans became evident. The retailer revealed it will rebanner its stores as Sweetbay Supermarkets, a completely new operation named after the Southeast's Sweetbay Magnolia, within the next three years. Broader told SN's Retail Editor Mark Hamstra that "this is more than just a name change. We're changing the whole shopping experience for consumers." (SN, March 15, Page 1.)
Here's how she put it in a company press release: "The new brand and store concept will express the vibrant, exciting and diverse tastes, colors and aromas of great food that are so important to Floridians."
The new entity is competitively positioned as a chain that exceeds Wal-Mart supercenters on quality while offering lower prices than conventional chains such as Publix and Albertsons. While success is by no means guaranteed, the company gets an "A" for effort. Few chains attempt such a bold transformation, and it appears a lot of research went into the decision.
These changes have the mark of Hannaford Bros. all over them. Hannaford, like Kash n' Karry, is a unit of Delhaize America. Broader came from Hannaford. Ron Hodge, Hannaford's chief executive officer, holds that same title at Kash n' Karry. Even the logo for Sweet Bay is derived from Hannaford's logo. Clearly, Delhaize hopes to translate the Hannaford success elsewhere.
It's not clear whether the Kash n' Karry strategy is the mark of vision or a reaction to being squeezed in the market. Probably a combination of both. Andrew Wolf, analyst, BB&T Capital Markets, Richmond, Va., told me last week: "Usually, this type of major change is not a sign of strength. In this case, it's not desperation. The market is forcing them to adapt, but they are probably doing it early enough so that the chances of success are not too limited. ... If they can pull it off, it widens possibilities on where the industry can go with the format of the supermarket."
Expanding those possibilities are what Kash n' Karry and the entire supermarket industry now very much need. So there's good reason to watch the Kash n' Karry/Sweetbay saga unfold, even if all the pieces to the puzzle won't be in place for some time.
