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Kash n' Karry's sales rebound

Kash n' Karry Food Stores Inc. on Wednesday said sales rebounded last winter, giving the company its first quarterly sales gain in a year. "We had a good quarter," said Raymond Springer, the Tampa-based supermarket chain's chief financial officer.

Sales inched up 1 percent to $275.8-million for the quarter ended April 28, ending a sales decline that stretched over the three previous quarters.

Kash n' Karry officials gave credit to a much-promoted Smart Buy Program, which features special prices on selected items highlighted in stores by shelf tags.

The company also shifted its advertising away from a campaign promoting its environmental awareness and recycling efforts. Instead, it turned to such traffic generators as a Super Bowl ticket giveaway and promises of low prices.

Full results of an April move to boost sales by keeping most stores open around the clock are not reflected in the reported quarter.

The company's loss for the quarter widened to $4.17-million, up from $3.53-million. But losses are not considered as important as cash flow in junk bond-financed leveraged buyouts such as the one that put Kash n' Karry managers in an ownership position in 1988.

Kash n' Karry's operating cash flow before interest, depreciation and amortization increased slightly to $18.1-million in the quarter.

Kash n' Karry continues to have trouble increasing sales by opening new stores. That's because overbuilding and the recession have stalled shopping center construction in Florida. So the company is turning to stand-alone stores it builds and owns itself rather than getting far cheaper deals from shopping center developers.

Kash n' Karry proposes to build its own stores in Tampa's Hyde Park, St. Petersburg's Allendale and in Gainesville.

Food Lion Inc. recently chose a similar tack. The Salisbury, N.C.-based grocer is selling $200-million in bonds to build stores mainly in the Dallas area. But some of the proceeds probably will help the chain get back on its once-ambitious growth track in Tampa Bay as well, company officials said.

"We're not going to let the recession slow our store growth," said Food Lion spokesman Mike Mozingo.

Food Lion did the same thing in 1982, then sold the stores to developers when the economy recovered.