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Sweetbay addresses high-price image(Tampa Tribune (FL) (KRT) Via Thomson Dialog NewsEdge) Nov. 16--TAMPA -- Call it a sophomore slump. Last week, the parent company of Tampa-based Sweetbay Supermarket revealed that its Sweetbay stores racked up impressive sales during their first year after being converted from Kash n' Karry stores. However, sales during their second year have been "disappointing," senior executives of parent company Delhaize Group of Belgium told stock analysts in a conference call. Behind the disappointing sales figures: a high-price image among some Florida consumers. To counter that perception, Sweetbay is aggressively touting the company's values through television and radio commercials and in-store signs. For example, on Wednesday afternoon a Sweetbay store on Gandy Boulevard in Tampa was awash in green "Savings on the Spot" banners hanging from the ceiling. "What has happened is our Sweetbay stores are beautiful, they've been cleaned up, they've been invested in," said Stephen Smith, a Sweetbay vice president over marketing and merchandising. "Our customers are expecting when they see our stores that our prices have gone up, when they actually haven't gone up." For about two years, the buzz surrounding Sweetbay has overwhelmingly been positive. The company's president and chief operating officer, Shelly Broader, was promoted to chief executive officer this year. The chain's early success was a factor in her promotion. Much of the news coverage about Sweetbay has focused on its fresh produce, the addition of gourmet products and the bright colors on its walls. Last Thursday, however, Delhaize Group CEO Pierre-Olivier Beckers reported a rare stumble for Sweetbay. Beckers wouldn't give sales figures but said that second-year sales at Sweetbay stores didn't fulfill the parent company's expectations. Those expectations were particularly high because of the chain's early success, he told stock analysts. The company thinks that public perception is the problem. On Wednesday, Smith said Sweetbay beats its conventional supermarket peers -- Publix, Albertsons and Winn-Dixie -- on price. Smith said prices at Sweetbay and Kash n' Karry are the same for similar items. Sweetbay has added some gourmet items that Kash n' Karry doesn't have, and those items tend to have higher prices, Smith said. People also may think Sweetbay is pricier simply because they are doing more of their shopping there. In the past, people did their primary shopping at Publix and went to Kash n' Karry for fill-in shopping, Smith said. Today, more people are turning to Sweetbay for their primary shopping. So, instead of spending $10 on a trip to Kash n' Karry, they are spending $40 on a trip to Sweetbay, he said. To change people's minds, Sweetbay began placing "Savings on the Spot" tags and banners throughout its stores in May. The signs tout everyday savings on certain items, such as a price of 89 cents for a 6-ounce box of Stove Top Stuffing. Sweetbay says that is a savings of 81 cents when compared with competitors. The company also has created TV and radio ads promoting its Savings on the Spot campaign. The ads ran in the summer but were dormant during the political campaign season, when political ads get priority at TV stations. The ads are beginning to run again, Smith said. On Wednesday, the Tribune spoke with four shoppers at the Gandy Boulevard Sweetbay. One said she thinks Sweetbay is high-priced. "That's [prices] what everyone's complaining about," Tampa retiree Dorothy Davis said. "Tell them to get their prices down, and they'll do much better." One supermarket industry consultant said Sweetbay isn't alone in facing a perception problem. In recent years, many grocery chains have stopped touting price so heavily because they don't want to try to beat low-price leader Wal-Mart Stores at its own game, said Jon Hauptman of Willard Bishop Consulting in Illinois. Instead, they have promoted their fresh produce, clean stores and service, he said. But they still need to tell customers about their values, which is what Sweetbay is trying to do now, he said. "The ultimate goal is to have shoppers say, 'Sweetbay might not have the lowest prices, but if you are a smart shopper you can do real well there,' " Hauptman said. To see more of the Tampa Tribune -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.tampatrib.com. Copyright (c) 2006, Tampa Tribune, Fla. Distributed by McClatchy-Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |