Mostly Cloudy84° WeatherMostly Cloudy84° Weather

Chief leads Sweetbay through era of rising food prices, heated competition

Mike Vail shows off the latest Sweetbay, which moved into a former Publix in East Lake Woodlands after Publix took over an old Albertsons. Frugality is the big new thing, he says. 

JIM DAMASKE | Times

Mike Vail shows off the latest Sweetbay, which moved into a former Publix in East Lake Woodlands after Publix took over an old Albertsons. Frugality is the big new thing, he says. 

Mike Vail was a key player in the leadership team that transformed the 105-store Kash n' Karry Food Stores into a more upscale Sweetbay Supermarket for its Belgian owners.

Eight years later as Sweetbay president, he's piloting the Tampa-based chain through an extended economic downturn and aggressive expansion by rivals Publix and Walmart and less pricey newcomers Aldi and Save-A-Lot. All this at a time when consumers balk at paying rising food prices.

Even so, Sweetbay, No. 3 in market share locally at 12 percent, has kept opening two new stores a year. Vail, 48, discussed necessary adjustments while showing off the newest Sweetbay in a rebuilt Publix at 3400 East Lake Road in East Lake Woodlands.

What's the local food market going through?

We are all grappling with some incredible food price inflation — 4 to 6 percent this fall as opposed to declining prices a year ago. It's starting to be passed on to the consumer, so we've firmed our price position between Publix and Walmart.

Manufacturers have been shrinking package sizes and reformulating ingredients to hold prices. Pepsi came up with a 1.25 liter plastic bottle to keep the price under 99 cents. Your competitors tightened up on coupons. You took a few other steps to ease price shocks. Name some.

This time of year we normally would have only California stone fruit like peaches priced at $1.99 a pound. We still do, but in the more visible front row we brought in East Coast peaches this fall of a slightly lesser quality that go for 50 cents less a pound. In meats we added shaved chicken, pork and beef. It's cut from the cap end of our premium deli meats and tastes great in sandwiches at $3 a pound. We introduced super-value packs in fresh meats. You can save $5 on a $30 order or up to $30 on a $110 total meat bill by ordering a month's worth at a time. We also taught our butchers to explain how you can save by cutting your own steaks from a primal (the large quarters of beef, pork or lamb that store butchers cut into pieces).

How has your customers' sense of value in food prices changed?

Four years ago they wanted two-thirds quality and one-third price. Now it's the other way around. They will remain frugal for the foreseeable future.

You are rolling out a store brand called My Essentials that appears to replacing your Hannaford store brand. What's the story?

My Essentials is our new budget price brand that's taking over the entry-level price in basic food categories that have been Hannaford. It's priced the same as Hannaford now but over time will get our starting prices closer to Walmart. We'll have about 500 My Essentials items — basics like chips and toasted oat cereal — while 1,500 more national brand equivalents will remain Hannaford, like flavored chips and honey-nut oat cereal.

After decades of spurning prewrapped fresh produce, you're doing it. Why?

We're packing some in shrink wrap at common price points like $1.49 and $1.99, stuff like peppers, squash, green beans and potatoes. It's a quick grab and go for the price conscious who don't like to guess at price per pound.

How has Florida's housing crisis reshaped your strategy?

There's been no population migration to new suburbs, so we're buying and remodeling old stores in established neighborhoods that are not fully served. We'd been shut out of East Lake Woodlands for years, for instance, but Publix moved into an Albertsons across the street. We rebuilt the old Publix as a new Sweetbay. We're spending $5 million to totally rebuild our Temple Terrace store.

How are you dealing with Publix and Walmart adding so many new stores while you open a couple a year?

We've lost market share, so we have to focus on each store's share in each neighborhood. It's not just food retailers. Drugstores — we face 600 CVS and Walgreens where Sweetbay operates — are moving into food. They sell 25 percent of the volume of all products we both carry.

Your new store in Tarpon Springs was the first LEED gold-certified supermarket in the bay area. Why isn't this one certified?

We put in most everything we learned about energy efficiency and sustainability from Tarpon into our new stores. We just don't pay to get them certified. So the monthly electric bill at this store is $20,000 vs. $30,000 in our pre-LEED stores.

You headed the board that spearheaded the overhaul of America's Second Harvest in Tampa into Feeding America. That's the food bank for food banks in eight counties that sells excess food gathered from manufacturers at 18 cents a pound, the cost of getting it here. Why have you invested so much volunteer time at Feeding America?

It fills a very important role, helping feed the less fortunate. I have a lot of expertise in the food business that I want to share with nonprofits. When I joined the board nine years ago, it was a small, loosely organized group of food banks that often competed with each other. Now we have top executives on board who retired from Cargil, offer a more cohesive program and more than doubled the budget. The problem is, in times like these, suppliers don't have as much excess food for us to distribute. Every one of our Sweetbay stores is partnered with at least one food bank to donate day-old deli, bakery and fresh frozen meats.

You played defensive end at Colby College in Maine and your three daughters are active in sports, often on teams you helped coach. Any of them serious about college sports?

My two daughters in college tease my youngest that she is "Dad's last hope." She's 14 and a pitcher on a touring women's softball team this summer.

Have you tried to hit her fastball?

No. But I do have to catch it.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Chief leads Sweetbay through era of rising food prices, heated competition 09/02/11 [Last modified: Friday, September 2, 2011 10:53pm]

© 2014 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...