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Business Observer Friday, Oct. 6, 2006 13 years ago

Let the Competition Begin

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Sweetbay Supermarket CEO Shelley Broader says Kash n' Karry was "an aging beauty that was never really beautiful." Sweetbay will go head-to-head with Florida's largest supermarket chain, Publix, on its home turf.

Let the Competition Begin

Retail by Janet Leiser | Senior Editor

Sweetbay Supermarket CEO Shelley Broader says Kash n' Karry was "an aging beauty that was never really beautiful." Sweetbay will go head-to-head with Florida's largest supermarket chain, Publix, on its home turf.

Sweetbay Supermarket CEO/President Shelly Broader recalls one of her first days as a grocery store manager: She was working as a cashier when a customer realized she was the financial consultant that two weeks earlier helped him obtain multimillion-dollar financing for a New York City company.

"The look on this guy's face," Broader says. "He was past horrified."

When he asked Broader what had happened, she told him she'd changed careers.

"I know he's still worried about that deal," she says.

Broader learned a lot that day about how professionals view service workers, she says, adding: "We treat people like that man treated me in that line, 'What in the hell happened to you that you're doing this crap job?' It was really pivotal for me."

For the past three years, Broader has led the transformation of Kash n' Karry, an aging grocery chain with $1 billion in annual sales and 100 stores, into the new dynamic Sweetbay.

She spoke with candor at an Oct. 3 luncheon of CREW Tampa Bay about how she became one of the few female CEOs in the region and what's going on at Sweetbay.

In her work, Broader, 42, deals with all types of people, from Wall Street analysts to store associates. As for cashiering, she says, "It is the hardest, most difficult, most humbling, most confusing job you could ever have."

And Broader wasn't just offering a lesson on values, she counts on those cashiers and Sweetbay's other service workers to fuel the growth of the chain. It doesn't matter what improvements are made at the executive level, if the employees who deal with the customers aren't passionate about service.

"If you can inspire passion in your associates, you can achieve things you'd never be able to achieve without them," she says.

No more ugly Ks

Work is complete on the transformation of the Kash n' Karry stores into Sweetbay in the Naples-Fort Myers region, she says. Work continues on stores in the Tampa Bay area.

The ugly, aqua K signage should disappear in 2007 when stores in the Gainesville area are remodeled, she says.

She also talked about the day she called the chain's owners, Belgium's Delhaize Group, to tell them they'd have to take an $80 million write-off: Kash n' Karry couldn't be salvaged. She called the brand "an aging beauty that was never really beautiful."

At her direction, the chain exited Orlando, closed 30 stores and began building a new brand.

"We really had to start from scratch," Broader says. "You'll never hear anybody from our organization say that Kash n' Karry has a new name because it doesn't. Kash n' Karry is retiring. We have really built a brand new company on top of the real estate of an old company."

The Tampa-based chain dismissed about 30% of its Kash n' Karry managers, she says, and another 5% left on their own. As for associates, only about 65% were rehired by the Sweetbay brand.

There are now 56 Sweetbays open in the chain's market, which is from Naples north to Gainesville, mostly along the Gulf Coast. Another 50 will open within a year and more than 30 the following year.

And, yes, Sweetbay does eventually plan to take on Publix, Florida's largest supermarket chain, on its home turf in Polk County, she says. But the chain doesn't plan to expand into Jacksonville or Florida's east coast. There's not much reason since Sweetbay's counties are some of the fastest growing in the country.

In response to a question, she said it'd be difficult to make a list of Publix's weak points.

"You get a market position like Publix has because they're good," Broader says. "And they're good in nearly every area of the business."

Then she took off her apron.

She says Publix has a great operation, but "they've had the luxury of operating in a market with relatively crappy supermarkets.

"By no means are they best of class for the consumers in what they offer," she adds. "But that's what makes them so smart. They haven't had to be. Why give the bells and whistles if nobody else is and you can make more money? I think they're brilliant."

Sweetbay doesn't plan to compete with Wal-Mart on its prices or to try to top Publix for service, she says. But the stores will provide great customer service and better and fresher food.

Another secret she let out of the bag: Sweetbay's prices aren't higher than Kash n' Karry.

"We are suffering some severe price impression issues at Sweetbay, but not a pricing issue," she says. "Our prices are good. Our price impression is, 'How can you have all this and it's so beautiful and your prices are the same as that awful, yucky aqua Ks?'"

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