Future uncertain for many Sweetbay workers, shoppers
By Richard Mullins | Tribune StaffTAMPA - Kate Miller walked broken-hearted out of the Sweetbay grocery store at Hillsborough and Armenia avenues Thursday morning, wondering where she'll go for cat food and medicine when the store closes in a few weeks.
Published: January 18, 2013
Published: January 18, 2013
"There are people who worked there 17, 18 years, back to when it was a Kash n' Karry," Miller said, pointing back at the store on the way to the parking lot. "The prices were even better than Walmart a lot of times. And the pharmacy had a deal on prescriptions."
Late Wednesday, the parent company of Sweetbay, Belgium-based Delhaize Group, announced that a third of its 105 Sweetbay locations in Florida would close by the end of February, leaving 2,000 workers without jobs, including several hundred at the 20 stores closing in the Tampa Bay area. Seven stores will close in Hillsborough County, nine in Pinellas County and four in Pasco County.
At the Hillsborough Avenue store Thursday morning, employees were stocking shelves and talking about post-employment options and who might get a severance package. Several declined comment on the record.
The stores are in high-income neighborhoods like Westchase and Carrollwood that offer a choice of grocery stores to its residents, and in low-income neighborhoods like the one east of Ybor City where the Sweetbay is the only grocery for miles around. For residents there, its closing will mean a major inconvenience and the added expense of traveling to other neighborhoods for groceries.
"I'm very disappointed to hear that Sweetbay is closing that specific location because that's the only large grocery store in that area that people can walk to," said City Councilman Frank Reddick, who represents the district that includes the Sweetbay on 10th Avenue East. "A lot of people there don't have transportation. They will have to walk or take the bus that much further out to shop."
But there is a chance that some locations will be taken over by other grocery brands, perhaps quickly because Sweetbay rented its stores rather than purchasing the properties. Potentially, rivals such as Publix or Walmart could move into the vacant spaces, but no plans by other grocers were announced Thursday.
The fates of the stores likely will vary, said George Anderson, a grocery consultant and editor of the retail blog RetailWire. Some may change to another brand such as Publix, others will be filled by medical offices or specialty retail.
Sweetbay is part of a much larger collection of grocery brands owned by Belgian-based Delhaize Group, which operates 3,400 stores in 11 countries. In the United States, that includes 1,500 stores along the East Coast under the brands Food Lion, Harvey's, Bottom Dollar, Reid's and Hannaford.
The "Sweetbay" brand has only been around since the mid-2000s, when Delhaize started dropping the name "Kash N' Karry" from Florida stores, finishing the transition to Sweetbay in August 2007.
It was a strategy aimed at Publix, Anderson said.
"They were not able to compete on price against the Walmarts of the world," Anderson said. "That pretty much left them to compete against Publix, and Publix is a juggernaut. So that's a tough road to go."
Delhaize does not break out sales for each of its brands. But according to market researcher Retail Sails, the 1,650 Delhaize-owned U.S. stores generated about $330 per square foot in 2011, the most recent data. That compares with $559 per year at Publix, $426 at Walmart and $878 at Whole Foods.
With its 1,066 stores in the Southeast, Publix has huge volume and leverage to pressure suppliers for lower prices. Walmart's global scale gives them a similar advantage against mid-sized rivals.
At the other end of the scale, a series of niche stores are gaining ground and building new stores. Scores of discount stores are under construction in the Tampa Bay region, including Dollar General and Dollar Tree, both of which are selling more fresh groceries, as are ultra-low price players such as Aldi and Gordon Food Service. Meanwhile, membership clubs such as BJ's and Sam's Club have taken much of the bulk market.
The luxury market is dominated by grocers such as The Fresh Market and Whole Foods that specialize in organic or artificial ingredient-free foods at a premium price. Whole Foods just opened a new store in the Carrollwood area, and The Fresh Market is opening a new location in the Brandon area.
After Delhaize announced a broader shake-up that included the Sweetbay closures, stock in the company rose almost 10 percent Thursday to close at $46.69 per share.
Publix officials took the occasion to boast.
"As Publix associates, we are blessed to work for and own a financially sound company that has a bright future," the company said in a statement. "While other companies are holding back, we're looking for opportunities to grow … this is possible because we're meeting and exceeding our customers' expectations."
They also encouraged soon-to-be-unemployed Sweetbay workers to apply at Publix if they have "a passion for food and a commitment to customer service." As for taking over former Sweetbay sites, they said they are always looking, but have made no decisions.
After the cuts, 30 Sweetbay stores will remain in Hillsborough, 19 in Pinellas and 11 in Pasco. Anderson said Sweetbay may ultimately go for a wholesale brand change, perhaps remaking themselves into a Latin-themed brand, or perhaps focusing more on catering.
"I think they can make it," Anderson said. "The question is whether or not they can just produce the kinds of results to satisfy the parent company."
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