Sweetbay Supermarket is searching for the sweet spot in the Florida grocery market. Number three in the market (behind market leader Publix and Winn-Dixie), Sweetbay operates about 105 supermarkets along Florida's west coast. Squeezed between Publix at the high end and discounters, including Wal-Mart Stores and ALDI, at the low end of the market, Sweetbay emphasizes value and caters to the Sunshine State's large Hispanic population with expanded produce sections (featuring exotic produce) as well as more organic foods and nutraceuticals. Formerly known as Kash n' Karry Food Stores, Sweetbay is owned by Brussels-based Delhaize Group.
While Delhaize does not break out financial results for its six US supermarket chains, the international grocery company in 2011 rang up more than $19 billion in sales in the US, about two-thirds of its total sales and 62% of its profits. With 105 supermarkets, Sweetbay accounts for a small fraction of its parent company's 1,650 US stores.
Parent Delhaize announced that it will shutter 33 unprofitable Sweetbay stores -- about one-third of the chain -- by mid-February 2013. Sweetbay will operate 72 supermarkets after the closures. The closures are expected to impact about 2,000 employees. Upon announcing the closures, Delhaize hinted that further changes are in store for its Sweetbay chain.
Nearly a decade after its transformation from Kash n' Karry to the more upscale Sweetbay banner, the chain is struggling to increase its slim share (~12%) of the market. Competition and the extended economic downturn in Florida, not to mention aggressive expansion by rivals, are all taking a toll. To compete, Sweetbay is emphasizing value through initiatives, such as its $10 meals promotion and the rollout of a new budget brand called My Essentials. Establishing a service-oriented corporate culture is also seen as key to competing against Publix, which has earned high customer service ratings from Consumer Reports.