AN ASSERTIVE NEW STANCE WITH VENDORS

ELLIOT ZWIEBACH

TAMPA, Fla. -- Nowhere is the new attitude at Kash n' Karry Food Stores here more evident than in its dealings with vendors.

"In the past we've waited for vendors to tell us what they have available. Now we will tell them what we need, which is a big difference," said Ronald E. Johnson, chairman, president and chief executive officer of the chain.

"If we want to display paper towels or liquid detergent, we'll go to the vendors and pursue a deal rather than waiting for one to come to us. We intend to take charge of our merchandising. "We'll decide how to merchandise the endcaps rather than adopting a victim mentality and listening to what's on sale and then selecting from those items without any rhyme or reason. "We are a strong, healthy company, and we want vendors coming in who trust us, vendors who will look at our current finances rather than dealing in the past." Johnson said the store remerchandising efforts plus better vendor deals can improve gross margins by 2% while also having a positive effect on overall sales. Kash n' Karry is spending about $2.5 million on forward buys and expects to crank the total up to $8 million to $10 million within six months, Johnson said. He also said the company plans to be more aggressive in dealing with direct-store-delivery vendors on buy-ins. "Our cost of goods is too high, and we've found over the years that DSD companies have been sending us their third- and fourth-string people," he said. "We've accepted that in the past but we won't any longer. We want to meet with the decision-makers." Kash n' Karry has replaced Damon Associates, New York, as its private-label broker with Cal Growers, San Jose, Calif. "Our private-label sales are $100 million, but they should be twice that and more," Johnson said. "But we didn't stake our position right, and we weren't marketing or merchandising private label properly. So we made the switch." Prior to the chain's Chapter 11 filing, vendors were giving Kash n' Karry 21-day credit terms, rather than the standard 45 days, "and we're renegotiating that with suppliers right now," Johnson said.

"Some vendors want to linger with the shorter terms, but we're very healthy financially and we're not going to tolerate it. And if we have to make an example of a company by dropping his product line, we will."