Roy Exum
When I learned BI-LO had sold to K-VA-T Food Stores in Virginia, I had an inkling that this could well be the best thing to ever happen in the Chattanooga grocery market. One of the best grocerymen that Red Food ever had back in the day – Jesse Lewis – was quickly hired by the K-Va-T and he has written down through the years that he’s never worked for finer people. I also knew that K-Va-T’s flagship stores, called Food City, have virtually no turn-over because their employees are so highly regarded by management.
Yet none of that mattered yesterday when I visited with CEO Steve Smith because my biggest worry was for all the Chattanooga people who were inherited in the deal.
So in kind of a coy way, I asked him what he thought of the BI-LO people. “They are probably the best grocery store folks I’ve ever seen. That was a huge part of our decision because we’ve already got a wonderful human resource in place. How's that for an honest answer?” he smiled.
“I’m going to add something I shouldn’t say, but these people have been banged around a little. Going from Red Food to BI-LO and now to us has to be a little unnerving so the very first thing I said to them was ‘Welcome to the family – we’re here for the long haul.” Sweeter music has never been heard.
Today six newly-remodeled and renamed stores will come to life and next week at this time the last seven stores in the 29-store deal will re-open under the new brand. This will give Food City a total of 134 stores ranging from Virginia to Georgia, and for a company that last year did $2.3 billion (with a ‘b’), the future is full of promise. “We think the new stores will generate between $4 to $500 million a year,” he said, “and we are already looking at some building sites right now for additional stores in this area.”
Competition for the food dollar is expected to be tense, with Walmart’s new neighborhood food stores springing up and a solid footing by Publix. Add a growing number of specialty grocers like Whole Foods and Fresh Market, just to name two, and it might appear the market is saturated. “Oh, I think there is room for everybody. We’ve competed with Publix and Walmart and done well. I am not worried as much about competition as I am supplying good groceries to good people. That’s what works for us.
“I’m convinced that we are a people company that knows about groceries. Our customers, our employees and our managers focus on people. Before we started the transition, I was very careful to explain to our executives that the BI-LO people should be treated as equals – now they are our people. I told our upper management, ‘If you have to step on some toes, make sure the shoes keep their shine.’”
In a brilliant move, Smith quickly paired seasoned store managers from Food City in a one-on-one way with the former BI-LO store managers. “They have each other’s cell phone numbers and if anything at all happens, they have an instant resource. There is new technology, new forms to learn. It is also not lost on me that the best student is the teacher. This makes all of us better.”
A somewhat unbelievable fact is that since the acquisition, Food City has used between 4,000-5,000 hotel-room nights. “We’ve been good for Chattanooga’s economy already,” he laughed, “but now comes the big part – becoming part of the community in every way we can. I know about Chattanooga’s philanthropy and the outpouring of love for the soldiers who were killed in the tragedy was so powerful we can hardly wait to play a big role in things like that.”
Smith, whose headquarters are in Abingdon, Va., promised he would be in Chattanooga often. He said, "I’ve got 29 great reason to be here, plus one that is even better. When we really began to study Chattanooga, my youngest daughter Chloe told my wife and me that she wanted to go to Baylor as a boarding student. We were heartsick when she enrolled in August but its been absolutely incredible so far. She wants to be on the rowing team and play lacrosse – Chloe is having the time of her life. And all of us are excited about watching the Baylor-McCallie game this weekend.”
It should be obvious Smith and Food City are “all in” about becoming “Chattanooga’s grocery store.” As a matter of fact, Jesse Lewis is so happy, according to Smith, he promptly went to watch his beloved Alabama football team last weekend. “Jesse has told us for years about Chattanooga and about the people here. Everybody we’ve brought to help with the transition now believes Jesse understated it; we are absolutely thrilled to be part of this region.”
The Food City stores have more brand-name goods that the previous stores and the chain enjoys a strong reputation for quality meats, produce and deli products. “We feel an obligation to provide the best grocery-store experience possible and the way that is done is with employees who are dedicated to serving the people,” he said.
Steve’s father, a naval academy graduate, got into the grocery business after he was miffed by waiting 30 minutes in an A&P cashier’s line. After Steve finished business school he got his first store and it folded in two years. “Ever since then I’ve been humble,” he grinned.
“That’s the biggest reason, I guess, we try so hard to be the best. Every Food City employee, including our newest one, can hardly wait to prove it. We plan on being here forever!”
royexum@aol.com