2023 Food City ROY

Steven C. Smith, Food City President/CEO, continues the company’s pledge to “Run the Best Store in Town” and vision for future growth.

The Shelby Report’s 2023 Southeast Retailer of the Year

From Virginia mountains, Food City evolves into regional

CEO: ‘It’s not growth to be growing, it’s growth to be better...to gain market share’

by Jack R. Jordan / content creator

Food City, The Shelby Report of the Southeast’s Retailer of the Year, has grown exponentially over the years through acquisition and natural growth. The privately held, family-owned company began as an 800-square-foot Piggly Wiggly in Grundy, Virginia, according to Steven C. Smith, president and CEO.

Today, Food City’s parent company, K-VA-T Food Stores Inc., operates 17 locations in southeastern Kentucky, 24 in southwest Virginia, 97 in east Tennessee, 11 in north Georgia and a single store in Alabama, where another location is under construction and more are planned.

The Food City banner includes 119 pharmacies and 116 fuel/convenience stores. Alongside its flagship banner, K-VA-T Food Stores operates five Fresh n’ Lows and one Cooke’s Food Store and Pharmacy locations, four Super Dollar Food Center limited

assortment stores, four wine and spirit stores and six Curt’s Ace Hardware stores.

The company also operates a 1.2 million-square-foot distribution center that also produces Misty Mountain Spring Water. The DC and K-VA-T Food Stores are headquartered in Abingdon, Virginia. The distribution center handles the delivery of all perishables to every Food City location. The bottling plant bottles pure spring water for sale in Food City locations, as well as private label water for a number of retailers, according to Greg Sparks, SVP/COO.

The company is dedicated to giving back to its associates and the communities where it operates. Nearly 40 years ago, Food City began offering an employee stock ownership plan. Today, more than 12 percent of the company is owned by associates through the profit-sharing program. That includes about 10,000 associates, or almost 60 percent of associates, Sparks said.

leader

Second-generation owner Smith explained this change came from the company’s founder and his late father, Jack C. Smith.

“I don’t know too many good grocers that aren’t nice people and aren’t friendly people. That’s part of what you need to be a good grocer,” he said. “And you care about your communities, you care about your associates. Because it’s not me or anybody else in leadership positions that make the company good. It’s the people in the stores that care about taking care of their customers that really make a successful company.

“Back in the early ‘80s, my dad really understood that. He wanted to do something to solidify a relationship with our customers and our associates.”

The ESOP comes at no cost to qualifying employees as part of the company’s retirement program. Smith said he considers this type of dedication to the people – within and outside the company – Food City’s “secret

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sauce.”

Family history

The Smith family began the journey into the grocery industry in 1955. Jack Smith opened his first store after spending seven years in the U.S. Navy where he served as a supply officer.

“He learned logistics, he learned leadership and learned management by doing that,” Steve Smith said. While preparing for the holidays, the elder Smith made a trip to a grocery store, where he had to wait 30 minutes to check out.

2023 Southeast Retailer of the Year

Foods Inc.

Smith said his father “needed to build a lot of the infrastructure” after more than doubling the amount of stores.

“We had to add some management and back office support when he bought some of those stores,” Smith said. “He didn’t have a lot of the infrastructure to run a company, going from four stores to 14 stores. So he had to build some of that infrastructure up and build some of the back office. He brought some people on and he went forward. He got the stores profitable.”

“He said, ‘I think I can do this better,’” Smith said with a laugh.

Jack Smith left the Navy in 1954 and he, along with his father, Curtis, cousin Ernest and uncle Earl, opened their first store under the Piggly Wiggly banner. The family found success with it. Within eight years, the family owned four Piggly Wigglys in Virginia and eastern Kentucky, according to Smith.

By the 1970s, the Smith family took on what was then its biggest expansion.

“There were some other Piggly Wiggly operators around [there] that didn’t have any family members that wanted to succeed them,” Smith said. “So they wanted to sell their companies. And within two years in the ‘70s, he bought two groups of stores. One was a group of four stores and the other a group of six stores. He went from those four stores up to about 14.”

The acquisition also led to partial ownership of the company’s first distribution center, Mid-Mountain

Smith joined the company after graduating college in 1979. At the time, his father had no intention to leave the Piggly Wiggly name behind. Until, that was, he heard a company called Food City was up for sale. At the time, the family had consolidated to 11 stores, and the late Smith leveraged nearly everything he could to purchase the Food City banner.

Food City had 19 stores and was a “much bigger company than we were. Not only in store count but in volume as well,” Smith explained. Alongside leveraging the company, his father put up collateral in the form of his home, cars and all of his stocks to secure the loan to purchase Food City.

“It was a big risk,” Smith said. “Probably not too many banks would do that today. We all worked together. We worked hard. We probably never worked any harder in our lives than we did back then to make sure the company not only survived but thrived.”

Smith had been with the company about five years at the time of the purchase. Eventually, he became a district manager. He worked under a longtime friend, mentor and former company president and board

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“I think our people have really gone above and beyond the call of duty – not just recently – but over the last three years. I’ve never seen harder working people that have excelled and have put their own personal health aside and come to work and manage our stores to the best of their ability. If I didn’t tell you I was proud of them, I wouldn’t be honest with you. I am proud and it makes me get up early and stay late to be part of a great team. I couldn’t be any prouder to be their CEO.”

Steve Smith President and CEO

‘I’ve never seen harder working people’

Steve and Jack Smith

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vice chairman, Claude Varney, who helped shape his love of the business.

“Mr. Varney got me intoxicated with people and with the leadership of people. He called it, ‘How to play human chess.’ How you get people to do what you need and to do it in the right way,” Smith recalled. “It’s how you lead people and how you reward people and how

2023 Southeast Retailer of the Year

you encourage people when they’re not doing quite the right things.

“Mr. Varney had a lot of skill sets. We always said, ‘He could step on your shoes and never mess up your shine.’ You felt good about his counseling.”

Varney is memorialized by the company through the Claude P. Varney Recognition Program and the Claude P. Varney Humanitarian Award, which recognizes

“There is a belief that people make a difference in the communities where we operate…I never expected to be a retail grocer, but it’s fun. You love the business. You love the people you deal with. You love the partnerships that you create over the years…And it’s really all about the people business. That’s what makes this company special. Are we good at selling groceries? Yeah, absolutely. We love it. We love to win. And we like to win a lot.”

Kevin Stafford VP of Marketing

outstanding volunteerism among associates.

Under Varney’s tutelage, Smith took over what was then the northern division of stores. After the purchase, the Food City locations were essentially “split in half,” Smith said. He was in charge of 14 stores while someone else ran the other half in the southern division. By 1990, the company had doubled in size again. Nearly six years later, it grew further through acquisitions.

Smith became president in 1993, while his father continued in the CEO role. Jack Smith never officially retired. Instead, he slowly transitioned out of the leadership role, though he was never too far away to offer guidance.

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‘Love the partnerships’ created over the years

Core qualities

When asked what core qualities make up Food City, Smith said “quality.”

“It’s not only the quality of the people, but the quality of the products we sell.”

Food City is committed to the promise to “Run The Best Store In Town.” The phrase was first uttered by the founder, but it resonates throughout the company today.

But running the best store in town takes dedication – in store and in the community. K-VA-T encourages community involvement corporately, through the stores, as well as individually. Each store has a budget, set up through the corporate headquarters, that is required to be spent within its community, according to Smith.

“Whether it’s on the Little League programs in town or it’s on other nonprofit organizations that make that community a better place to live, to work and to

2023 Southeast Retailer of the Year

raise your children,” he said. “And we’ve got enough confidence in ourselves as a business that if we can help a community be better and people move there and people want to live there, we can get our fair share of the market.”

The company even has a program that helps store managers join local civic clubs.

“Because we want them to be part of that community, build relationships with people in that community,” Smith said.

He continued by saying the program is particularly advantageous as managers often move between regions and are required to work in unfamiliar areas.

“What better way to get to know people in the community than join a community club and give not only your time but service?”

Natural growth, acquisitions

K-VA-T Food Stores Inc. has a history of growing through acquisitions. Its most recent large acquisition was in 2015, when Food City purchased 29 BI-LOs around the Chattanooga, Tennessee, area and parts of northern Georgia.

Alongside acquiring these stores, the company also has grown organically in new markets to help augment the acquisitions, Smith said.

Food City has been investing heavily in the stores it

acquires, as well as its previous locations, something Smith said has been a staple of the company. These investments can range from complete rebuilds or remodels, implementing newer technology, expanding square footage or investing in associates.

“It’s not growth to be growing, it’s growth to be better, it’s growth to gain market share. And it’s growth to give our shareholders a return on their investment,” Smith explained. “We don’t spend money to spend money. We spend money to, hopefully, make money. But our horizons are different.”

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“I’m proud of the honor. I’m proud of the company. I’m proud of the people I work with. These are folks that I’ve been around my entire life.”

Drew Hembree JCS Sales VP & Managing Partner

‘Proud of the people I work with’

2023 Southeast Retailer of the Year

From page 28

As of this spring, the company had remodeled about 80 percent of its stores in some way, according to Kevin Stafford, VP of marketing. The company benefits from owning nearly half of the properties where it has businesses. Smith said he hopes to grow square footage by 3-5 percent a year – a goal he is confident the company can reach through internal cash flow. Investments such as these not only help capture market share, but also give associates confidence in the company. And they also draw traffic.

“It builds your team up as much as anything, gives them the confidence that they’re going to get what they need to do their job,” he said. “We’re going to be, hopefully, the first one to remodel our store, the first one to expand our store, build a new store. It gets young people inspired to want to continue to be part of that organization, too, because they see a growing company as the potential for them to move up and be an assistant manager, be a store manager, be a district manager. There’s nothing better than to go in and see a new store open and see it do well.”

The brand is continuing to grow organically. The company has continued to build new stores and explore other retail ventures. Recently, it expanded into general retail through Curt’s Ace Hardware stores. John Jones, EVP/director of store operations, described the expansion as “really exciting.”

“Ninety-five percent of [people] that walk in need help with a project,” he said. “I think that’s what I found attractive about it because most of us in the grocery business, we do this because we love helping people. Ace is all about being helpful. It’s a new business for us. It’s a growing business.”

As Food City owns so many of its properties, this move into hardware not only

fills unused space but also provides communities with job opportunities and a service that otherwise may not be available.

As Food City owns so many of its properties, this move into hardware not only fills unused space but also provides communities with job opportunities and a service that otherwise may not be available.

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As for new stores, the company announced at the beginning of May it has committed to building six locations in the Huntsville, Alabama, area. The largest one will total 60,000 square feet, with the smallest at 30,000 square feet. The other four will be 54,000 square feet.

The first three locations will be constructed “within the next three years,” Smith said in a separate statement to The Shelby Report. The other three locations will be completed by the sixth year. The stores will bring an estimated 1,350 new jobs to the area.

“We’re excited to be moving into Huntsville, Alabama, and the surrounding areas. While this is our first project in the area, it certainly won’t be our last in Huntsville and the neighboring communities,” he said in the statement.

Southeast Retailer of the Year

According to Smith, since K-VA-T is a family-owned business, it doesn’t have to worry about “this quarter or that quarter.”

“We have to worry about things that are going to be good in the long run. Because you can open up a lot of stores that might be a little detrimental to the financial statement in a year’s time. But two years, four years, six years, they pay real dividends. That’s the good thing about a company like ours.”

Next generation

The Smith family’s legacy in Food City seems secure. Smith’s daughter, Katie Penny, serves as a district manager of the Chattanooga division. While she joined the company in 2020 after a stint working outside the grocery industry, she said she always had the food industry in her blood.

She started with the company in high school, working as a part-time fuel pricing assistant. After graduating from college, she pursued a career in hospitality before rejoining Food City in 2020. She was promoted to her current position last year.

Penny has served on the company’s in-store design committee, its senior staff executive leadership team and was a founding member of the company’s female executive development group. She serves on the board of directors for the Salvation Army of Greater Chattanooga. She received an award through the Claude P. Varney Volunteerism program in 2022 for her work with the organization. She also is involved with a number of other civic groups, including the Chattanooga Area Food Bank, Northside Neighborhood and Preserve Chattanooga.

Smith’s nephew, Drew Hembree, is VP of JCS Sales

“Our people have said it probably 100 times, but it’s all about our folks taking care of our customers and making good decisions to help us continue to grow. Because we are nothing without our people there on the frontlines, taking care of customers. I think as a company, we do a great job of taking care of our associates. And that’s why they’re motivated to take care of our customers.”

Katie Penny District Manager-Chattanooga Division

and a managing partner. He began his Food City career in 1998, while in high school. He continued to work for the company throughout high school and college. After graduation, he completed the company’s yearlong assistant manager training program, working alongside a number of mentors.

Hembree has served in a number of positions throughout his career, including assistant store manager, social media manager, site analyst, category manager, director of advertising and VP of traditional advertising.

In 2019, he became managing partner of K-VA-T’s subsidiary, JCS Sales, where he is responsible for the management of Food City’s private label family of products. He also served on the Virginia Highlands

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‘We are nothing without our people’

“I think it all goes back to when Mr. Smith started his first store in Grundy, Virginia. He really talked a lot about just being able to serve your friends and neighbors and provide them with a great place to shop. I think that’s a lot of it. We just do so much in the community…I think we’re great community partners in all the communities we do business in. And we run a pretty good grocery store, to tell you the truth.”

John Jones

EVP, Director of Store Operations

‘We just do so much in the community’

2023 Southeast Retailer of the Year

From page 32

Small Business Incubator board of directors and is a former member of the Abingdon Rotary Club. He was also named to the Tri-City Business Journal’s 40 under 40 class of 2015.

Hembree said his passion for the food industry is something that he found himself, adding he would like to see more members of the family find a similar calling.

“I’m proud of the company. I’m proud of the people I work with. These are the folks that I’ve been around my entire life.”

2023 Southeast Retailer of the Year

It’s all about experience – ‘People don’t forget things like that’

by Jack R. Jordan / content creator

Food City, The Shelby Report of the Southeast’s Retailer of the Year, was founded on the simple notion to run the best store in town. But how has it accomplished that?

Customer experience is the strategy, said Dan Glei, EVP merchandising/marketing.

“If you come into our stores as a customer, we want you to have an experience that’s going to be really highly positive and makes you want to come back. We want you to tell your friends about it. We want you to

say, ‘My Food City down the street.’”

Community involvement, local offerings, highquality products with affordable prices, prepared foods, third-party partnerships and improved stores are the company’s way of making each store special.

“When people begin to identify with that personalization of their stores, that’s when you know you kind of arrived in terms of experience,” Glei said. “Now that experience can be different things for different people, which is great. In the markets we do business, we serve a diverse group of customers. You’ve got all walks of life coming to your store. You want that experience to be felt by all walks of life.”

Customers should feel at home when they come into the store. Associates are encouraged to greet everyone and provide them with the best experience possible. That comes from the culture, according to John Jones, EVP/director of store operations.

“If a customer asks, ‘Where are the Rotel Tomatoes?’ We want our associates to take you right back to the tomatoes to show you where they’re at,” Jones said. “We encourage everyone to speak to everyone every day. If a customer walks in and they pass a teammate, we expect them to acknowledge you and to speak to you. We’re not only creating a place for them to shop, we’re hopefully creating an experience that when they go home, they’re telling their friends.”

This experience extends to every department. In the meat department, customers can get their steaks hand cut. Prior to COVID-19, customers were encouraged to sample fruit. And even on rainy days, courtesy clerks help customers to their cars under an umbrella.

“People don’t forget things like that,” Jones continued.

Getting involved with the community is one of Food City’s largest core qualities. Store managers are encouraged to join local civic clubs. Stores are provided funding to return to the community. And associates are rewarded for their efforts outside work. It gives them a sense of belonging, raises brand awareness and reminds customers that those bagging their groceries or stocking their produce are their neighbors.

“Customers like to identify with people that are like them or are interested in the same things they are. You can see your local produce manager at a Little League baseball game. It could be Junior League or it could be Tennessee football. Associates want to be involved with their community. Because it’s theirs,” Glei said.

The grocer works closely with local vendors and entrepreneurs, most notably farmers. In the produce department, customers can read about the farms that grew the fruits and vegetables. Likewise, brands made locally can be found throughout the store. As beverage alcohol continues to grow in store space, providing

“First and foremost, it’s our people in our stores, the people in the [corporate] building. It’s just a very cohesive company, a cohesive unit. Our culture is great from Steve [Smith] down. We all get along, we all have fun. I think if you go to the stores, our people have fun. They enjoy working for us.”

Steve Holloway VP, Meat/Seafood Operations

local craft beers and wines has been key.

“People really value that, and it sets us apart from the national chains that come in. It’s really hard for them to do this. And I’m not sure they have the same level or mission statement to deliver upon that,” Glei said. “We want Food City and every place we do business, whether we’re in Abingdon, [Virginia] or Albertville, Alabama, we want you as a customer to believe we’re deeply connected to the community. That’s important to us.”

Starbucks and sushi deserts

The company also partners with nationally recognized brands to enhance the customer experience. This spring, the company celebrated the opening of its 50th Starbucks location. The partnership with the coffee shop, which began in 2017, has delighted customers who rarely see the brand.

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‘It’s just a very cohesive company’

“It’s what we do in the community. We’re not just a grocer. We’re part of the community. We support the local people, and they support us.”

Mickey Blazer

EVP, Pharmacy, Fuel and Convenience Stores

‘We support the local people’

“When we brought Starbucks to some of our stores, there was not another Starbucks for almost 100 miles. That may be hard to imagine, but if you’re in Pike County, Kentucky, your closest Starbucks was someplace in West Virginia,” Glei explained.

When the partnership was established, Glei said the company told Starbucks it would take the brand “to places it needs to be and to customers who want it.” He referred to these areas as “Starbucks deserts.”

Food City’s foodservice and meat department brings fresh, made-in-house sushi offerings to areas that might not otherwise have any.

“We’re an enabler for those services and those opportunities and options to come to some of our communities. That’s certainly not the case everywhere. But in many places, it is. Customers still appreciate the experience,” Glei said.

Food City also has partnerships with e-commerce platforms Instacart and DoorDash for customers to get groceries or prepared foods delivered to their homes.

2023 Southeast Retailer of the Year

Foodservice

The company has a long history of preparing fresh food inside its stores. It’s a catalyst for many store remodels, according to President Steve Smith.

“Really that’s the main reason that we’ll expand a store is to give the foodservice department more room,” he said.

The offerings at several newer or remodeled locations include: sushi; gas-fired Asian wok-prepared dishes; The “Q” Smoke Pit Famous Smoked Meats; brick oven baked pizzas; fresh food bar with a variety of soups, salads and fruit selections; olive and wing bar; and daily rotation of freshly prepared foods. They also have a variety of daily, made-from-scratch deli salads, desserts, breads and other bakery items.

The classic “meat and two sides” plate continues to be a staple at Food City as the company offers a hot bar combo that includes a drink for under $10. Staples of the bar include homestyle favorites like meat loaf and fried chicken or fish while also rotating internationally inspired menus such as Italian, Mexican and Asian. The hot bar is open daily for breakfast, lunch and dinner.

Customers also can order specialty cakes, party trays, fresh sandwiches and heat-and-eat items. Some locations offer full-service catering and event planning.

As a testament to the volume of prepared food that some Food City foodservice departments can encounter, Katie Penny recalled the day after COVID-19 nongathering restrictions were lifted in Hamilton County, Tennessee.

“I was working at one of our highest volume stores

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“I’ve been with the company for 35 years. I had a job for a short period of time out of college and I interviewed with Steve [Smith] and he hired me and I’ve never put in an application anywhere else. We have a fabulous group of people…they work really well together.”

Bucky Slagle VP of Produce/Floral Operations

Associates ‘work really well together’

From page 40

in the division,” said Penny, district manager-Chattanooga division. “I remember we had a 96-piece chicken order going out at nine o’clock and the main cook had called out. Myself and the foodservice manager, we just jumped in. We just started frying. And I don’t think we stopped frying until four o’clock that day.”

She received the Golden Clucker Award last year for her division achieving the highest percentage in chicken sales.

“That’s a lot of hard work and execution on all of our foodservice associates’ parts and being consistent on providing a good quality product for our customers and being able to take care of their needs at those peak times,” she said.

2023 Southeast Retailer of the Year

“We want to provide experience, whether in foodservice, grocery, produce, meat, seafood, Starbucks and sushi. That’s what really gets customers excited. We have people who are leaders. We want to be leaders. They want to be leaders…if you look at it through value and breadth of assortments, we are the best store in town.”

Dan Glei EVP, Merchandising/Marketing

Food City also uses its prepared foods for events across its market areas. It has a fleet of 13 mobile smokers that are used at different stores every weekend for outdoor events in the stores’ parking lots, according to Steve Holloway, VP of meat/seafood operations.

Two smokers stay at two of the company’s highest volume stores in Kingsport and Gatlinburg, Tennessee, while the rest are assigned to a district for use at fundraisers and other events.

“These are big mobile smokers that hold a lot of product,” Holloway said. “We can get 100 Boston butts, probably 120, maybe (130) racks of ribs.”

Food City will smoke a variety of meats such as Boston butts, briskets and baby back ribs to be used in a variety of recipes, including sliders, smoked mac n’ cheese or loaded baked potatoes. The mobile smokers continue to grow in popularity.

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‘We have people who are leaders’

2023 Southeast Retailer of the Year

From page 42

“It’s big, but the pitmasters have big followings, the ones that have been around a while. We get emails from customers every day wanting to know where they’re going. We have a schedule on our website, but the guys have big followings.”

The weekend events are scheduled to end at 9 p.m. but typically sell out long before then, according to Holloway.

Promotions, sales and deals

The weekly ad is key for retailers. Food City provides its ad for print and online through the Food City app and website. Alongside rotating sales, the company touts special events, advertises deals and provides members of its ValuCard rewards program with extra savings. It also offers bulk savings, BOGOs, weekend deals, Pick 5 deals, over 20 private label brands, onlineonly promotions and special weekend discounts.

Kevin Stafford, VP of marketing, said these deals help balance Food City as it appeals to different types of consumers. On that note, Glei explained that customers looking for quality or value don’t have to choose one or the other.

“Even though experience is our strategy, it means different things to different people,” he said. “We may know that you’re a quality-driven shopper, but there’s another shopper that comes to our stores. They’re a very price-driven shopper. They have a certain amount of money that they have to be able to feed their families. We work pretty hard to take care of that particular customer.”

When customers walk through the store, they can find items that have been marked with a blue “Value

Every Day,” red “SALE!” or a green “LOWER Price” sticker. All three represent value for customers. Likewise, bulk sales are found on items with the “Buy More SAVE MORE” tags.

Customers with a ValuCard membership get access to BOGO sales. They also get access to Food City’s Fuel

Bucks program, which provides a discount at the fuel pump. Members get value every day with the Food City Pick 5 program. Customers pick five specially marked meat items to receive a discounted price of $19.99. Similarly, they can pick five marked produce items for $7.99.

GoCart, the retailer’s pickup and e-commerce service, offers special savings such as free items, discounts, bonus Fuel Bucks and more, according to the company’s website. Food City also works with its suppliers to provide the best value for their e-commerce shoppers. Customers can waive their $4.99 pickup fee by meeting brand-specific purchase requirements such as purchasing $20 or more of Coca-Cola products.

“Price competitiveness is absolutely critical to maintain your success,” Glei said. “Because if you’re going to be a quality-driven retailer, your ability to serve our customers is going to be limited. We have the absolute responsibility in our communities to be able to serve all customers.”

Improving stores

Food City has invested millions of dollars to revitalize and update older stores. These updates include more square footage, larger perimeter departments, updated

“We

organization. As much good as we do in the community, we probably could toot our horn a little bit more. But that’s not our style. It’s all about doing good in everything we do. We take a lot of pride in that and a lot of satisfaction. I think it starts with Steve [Smith]. He’s one of the most selfless people you’ll ever meet and the whole organization is that way. It’s all about doing business the right way, being the best store in town.”

technology and enlarged center store areas, which can include a growler station with craft beers and wines on tap. The remodeled stores also feature rentable community spaces and award-winning energy saving concepts such as refrigeration motion sensors, LED lighting and open rafter ceilings.

To date, the company has improved about 80 percent of its stores, with more scheduled. Steve Smith, president of Food City, explained how the company goes about making some of the changes.

“You have to do it the right way. We update stores in a variety of ways,” he said. “You can replace a store –we do that when the store gets a certain age or maybe it’s landlocked and it can’t be expanded anymore.

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are an extremely selfless

Greg Sparks SVP, COO

‘All about doing business the right way’

2023 Southeast Retailer of the Year

From page 44

A  lot of times, you can enlarge the store by going to the right or to the left. In fact, over the next 18 months, we’ve got 12 of those to enlarge.

“A lot of those stores are in the 35,00045,000-square-foot range and we’re going to take them up to 50,000-58,000 square feet. Because we can do a lot of things with our foodservice department. We can do a lot of things with Starbucks. We can do a lot more things with sushi, expanded frozen food, dairy.

“We’ve got pharmacies in most of those stores already, but sometimes we can give more room to pharmacy. It’s been immensely popular. People love seeing what we’re doing. They love to come into the new stores. It shows a commitment to the people of the community and a commitment to the associates working in the stores.”

Fuel is another portion of Food City’s business that continues to grow. Every new store is built with fuel in mind, and it is always considered when improvements are made.

‘What makes Food City Retailer of the Year?’

“We strive to be the best. Every day, we work to run the best store in town.”

Darcie Mink Food Service Manager

Food City No. 605 in Kingsport, Tennessee

Southeast Retailer of the Year

Offerings at best store in town are ‘as fresh as fresh gets’

by Jack R. Jordan / content creator

Food City’s meat and seafood and produce and floral departments can be best described in two words: picky and convenient. The company prides itself on providing the freshest produce, highest quality meat and seafood and brightest floral arrangements in the market – all while cultivating partnerships with local farmers and growers to provide the best value for customers.

Food City, The Shelby Report of the Southeast’s Retailer of the Year, emphasizes freshness across all departments, according to Bucky Slagle, VP of produce/floral operations. In produce, the company has what it calls, “The Picky About Produce Promise.”

Each store pledges to provide the freshest fruits and vegetables. If customers are not satisfied, Food City will replace the product. It’s a promise carried out by top-level executives and associates alike.

“We actually have signs right in front of our stores where each of our department employees sign, saying that ‘we’re committed to making sure that you’re buying 100 percent fresh product, we guarantee that product,’” Slagle said.

Every morning, produce managers cull the racks from end to end for product that is not deemed 100 percent fresh. Midday, the process is repeated during the “two o’clock tune-up,” Slagle said. Produce that is culled but still of high enough quality can be used in the foodservice department or is otherwise donated

to local food banks.

The product’s freshness is also aided by the frequency with which deliveries are made. Produce arrives at stores every other day.

Food City also partners with a number of local farms. Some growers work with just a few stores while others work with the internal distribution center at the grocer’s parent company, K-VA-T Food Stores Inc. For convenience, the company offers backhaul delivery to the distribution center.

Information on producers can be found above the displays throughout the produce department. It all goes back to the company’s founder, Jack C. Smith, who pledged to “run the best store in town.”

“You’ve got to have the freshest if you want to be the best store in town,” Slagle said. “It’s as fresh as fresh gets when the products may be picked this morning and then delivered directly to the stores. Even if we backhaul it, that product comes right back, most of the time, the day it’s picked. And it’s back out to the store within 48 hours. So, it’s truly fresh product.’

In larger footprints, customers can also find fresh herbs growing in the produce department.

Customers are encouraged to cut their own. Mature herb plants such as basil, thyme or rosemary also are available for purchase to plant in customers’ own herb gardens.

Local is not unique to the produce department. Food City also works with area vendors in its floral department. It has invested heavily to expand the offerings beyond traditional bouquets or balloons. Slagle explained that products such as hanging baskets, bedding plants, wreaths, ferns, funeral quilts, candy bouquets and other greenery have flourished.

The fern program began about five years ago. “We were selling maybe one, two truckloads of ferns per year. Last year, we were close to 50 truckloads of ferns,” said Slagle, adding that it “really is the quality of the product that has helped it flourish.”

The department is staffed by trained floral designers seven days a week. At larger stores, the company is implementing engraving stations, which has been well received, according to Jack Wycoff, store manager of Food City No. 823 in Abingdon. His store was among the first to have one.

“We see it used a lot with the big holidays in the floral department like Mother’s Day or graduations,” Wycoff said. “You have a lot of keepsake things you can engrave so they use it for big moments, maybe a wedding gift.”

Customers can engrave items with help from an associate at the station. For example, photo frames, cake stands and other novelties are free to engrave with purchase.

For customers seeking a quick dinner, Food City offers Shortcuts in its produce department. Associates will clean, cut and package fresh fruit and vegetables in varying size containers for customers to incorporate into meals.

The veggie and fruit Shortcuts are available in party trays or in 16-ounce snack cups. Slagle described the cups as “ready-to-eat, ready-to-go.” Fruit Shortcuts also come in 32-ounce, 48-ounce and 64-ounce bowls.

Steve Holloway, VP of meat/seafood operations.

The grocer also offers what Holloway referred to as “campfire pans.” These heat-and-eat meals have a protein, vegetable and seasoning in one pan. The meal can be prepared in the oven or microwave or on a grill.

Holloway continued by saying Food City’s fullservice meat department takes time to prepare other ready-to-cook items, including appetizers, seafood or marinated meats. Customers can find them prepackaged throughout the meat department or behind the butcher case.

Associates go through a rigorous certification process to help with any concerns.

“Customers have a lot of questions. They’re not sure how to cook. They’re looking for dinner ideas. They’re in a hurry. We can suggest these quick things, easy things,” Holloway said.

Please see page 50

However, vegetables come in wider varieties. Eightand 16-ounce cups are known as, “recipe ready.”

“Chopped onions, chopped peppers, mix of peppers and onions, chopped celery, tomatoes, jalapenos and other things such as that are available, so folks can pick those up and they’re prepared, cut, ready-to-go right in a recipe,” Slagle explained.

As part of its Shortcuts program, Food City also offers baking and grill-ready vegetable pans with a variety of recipes, as well as toppers, roasters and soup starters.

The program extends into the meat and seafood department with Food City’s Shortcuts Meal Solutions. The prepackaged items are ready to cook in steamer bags that can be microwaved or baked, according to

Jack Wycoff

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“We’ve got our Meals in Minutes already made up, or we can help them with what to make. Anything we can do to make it easier when they come in. We are trying to have the value there in a quick, convenient form like in grab-and-go. And a lot of it is healthier than going to the frozen food aisle.”

For value-centric customers, Food City offers its Pick 5 program. Each week, customers can select five special, marked items in produce for a discounted price of $7.99. In the meat department, they can choose five items for $19.99. Customers do require a ValuCard, Food City’s rewards program, membership to receive the discount.

For customers looking for the highest quality meats, Food City has been a certified Angus beef brand partner for nearly 24 years. “Obviously, we’ve hung our hat on that,” Holloway said. “The quality speaks for itself.”

During the COVID-19 pandemic, many customers experienced the quality of Angus beef for the first time and have stuck with it, according to Holloway.

Food City’s fresh ground beef program is unique. Unlike most grocers, Food City places its ground beef on an 18-hour shelf life. Associates note the time instead of the date when preparing ground beef. If the product is not sold within the time frame, it will be packaged and placed on the shelf for sale outside of the case. In some instances, ground beef is taken to the foodservice department to be used in hot food offerings like spaghetti or hamburger steak, according to Kevin Stafford, VP of marketing.

The meat department abides by a rigorous sanitation regimen in place since 1986, Holloway said.

2023 Southeast Retailer of the Year

Between 11 a.m. and 1 p.m., the department will close for about 20 to 30 minutes to break down, clean and sanitize the display case and meat processing equipment. Customers are notified of the temporary closure via an intercom announcement. The process is repeated at the end of the night.

For seafood, Food City receives deliveries every other day in every store to maintain freshness. The retailer makes signature seafood items, including salads, crab cakes, salmon burgers and dips. Other made-in-house items include twice-baked potatoes,

bacon-wrapped stuffed jalapeño peppers, baconwrapped asparagus and buffalo chicken wings.

The meat department also has handled the freshmade sushi program since 2016. Holloway said the retailer began its own made-from-scratch sushi to expand its product offering and create further variety. The company now has 75 sushi bars and counting across its market area.

As the company continues to grow, sushi is becoming a main offering in all new or remodeled stores.

Southeast Retailer of the Year

Fuel centers, pharamacies bring ‘whole package together’

by Jack R. Jordan / content creator

Food City, The Shelby Report of the Southeast’s Retailer of the Year, was founded on the pledge to: “Run the best store in town.” To do so, it must be able to meet customers wherever they are.

A key part of that has been evolving and adapting the company’s gas and pharmacy programs, according to Mickey Blazer, EVP of pharmacy, fuel and convenience stores.

The retailer operates 119 pharmacies and 116 Food City Gas ‘N Go fuel/convenience store centers across its 150-store operation. As the company has grown – organically and through acquisitions – pharmacy and fuel have become a high priority. Space permitting, pharmacies and fuel operations often are implemented, updated or expanded.

“When we put a fuel station in an existing store, we almost always see a 5 to 8 percent lift in the business inside the store. It just brings the whole package

together,” Blazer said.

Older Gas ‘N Go locations are being retrofitted with larger and more modern convenience centers, as well as offering diesel fuel and 100-percent gas. The company has offered diesel fuel in select locations since moving into fuel and pharmacy in 1997. However, it is working to expand the offering. Twenty-two locations have electric charging stations, according to Blazer.

Depending on the market, Food City offers unmanned 24-hour self-service gas pumps. They’re available in a third of the brand’s locations. The program is just two years old but is becoming “more and more popular,” Blazer said.

As inflation and gas prices strain wallets, Food City’s Fuel Bucks rewards program provides some relief. Customers can earn fuel bucks through the ValuCard rewards program. Members earn one Fuel Buck for every dollar spent on groceries, including alcohol, to redeem for discounts at the pump.

When customers redeem 150 Fuel Bucks, they save 15 cents off per gallon any day. On Wednesdays, Food City offers its Win-Win Wednesdays when shoppers can redeem 300 Fuel Bucks and save 30 cents per gallon. The company also holds Bonus Fuel Savings Days, during which customers can receive even more savings.

“Our gas program is just a big part of our total marketing program…drawing the customers into the store and then having the convenience that customers come to expect,” Blazer said. “Just like the expectation

Please see page 54

that they’ve become used to with our food safety, quality and service, we can help in the same way with fuel…we’ve seen prices get really high. And the higher the price, the more people are there, the more fuel that’s coming into play.”

Customers will also find special, marked items throughout the store for the Food City Ticket To Ride program. The program offers a $10 off fuel coupon to customers when they reach a certain price threshold of participating brands’ products.

Dan Glei, EVP, merchandising/marketing, gave an example of a customer buying $30 worth of General Mills products and receiving a Ticket To Ride coupon. The program has proved popular with customers and suppliers since its launch in August.

“Who wouldn’t want to get $30 worth of loyalty out of a customer? Who wouldn’t want to get $10 off their tank fill-up? Yes, it’s been really popular. Our

customers like it, our suppliers like it,” Glei said.

The program can include multiple brands or suppliers. If customers meet the requirements for any number of types, they receive a coupon.

“If you’re shopping and you know you use a ton of a certain type of detergent, or you have kids who eat a lot of snacks, you can go in and you can buy two types. You can buy this one or that one or both. It’s a $30 threshold for both. You could have $20 off from your fuel,” Glei explained.

Customers can also receive rewards in the pharmacy. They can get 25 bonus Fuel Bucks with qualifying new, transferred or refilled prescriptions. They can earn an additional 1,000 bonus Fuel Bucks with qualifying prescriptions when they join the Food City Wellness Club.

There is no cost to join the Wellness Club, which offers benefits such as:

 Monthly emails with tips, recipes and offers

 10 percent off diabetic supplies

 Free prenatal vitamins

 Member-only events

 Access to registered dietitians

“We want to play a big role in our customers’ health and wellness and pharmacy allows us to do that,” Blazer said. “We have over 260 pharmacists on our

team and are some of the most accessible health care providers in the whole profession. Our customers have a health care professional at their disposal, seven days a week.”

Food City believes that food is medicine. It aims to help customers make smarter diet choices while providing them with the information needed to make those decisions. Blazer said many customers use pharmacists and the Wellness Club’s dietitians to help manage chronic diseases or make health-conscious decisions.

“We have a collaborative team between our pharmacists – from our health coach that we have on staff and our dietitians, who work to provide educational

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From page 54

information. We try to focus on more of what you can eat, not what you can’t eat,” he said.

“So many times when someone is diagnosed with a specific disease, they get all of this saying, ‘This is what you can’t do…’ We try to take a spin on it and say, ‘Well, maybe you can’t do that, but this is what you can do.’ Health has so much to do with what you put in your body…We work really hard with our dieticians to be able to educate our customers on what’s better for them.”

Dietitians are in high demand. They often are asked to speak with local schools, youth groups, municipalities and their employees along with other educational engagements.

Customers can find other nutritional education at Food City through Pick Well, an easy resource to find products that fit dietary needs, according to Glei.

Items are tagged in-store and online with various icons that meet specific standards regulated by the FDA. Tags such as Heart Healthy, Low Sodium, Whole Grain, No Sugar Added, Gluten Free and Carb Aware are color-coded and displayed for products that fit the description. The final tag is Dietitians Pick, which is for items that are generally “good for anyone,” Glei said.

“They’re flagged and tagged in the stores…our nutritionists work through and pick these items based on nutrition science.”

Immunizations have become more and more a part of the pharmacy business. During the COVID-19 pandemic, Food City administered more than 150,000 COVID shots. The company’s pharmacy division has an “aggressive marketing campaign” for flu vaccinations,

2023 Southeast Retailer of the Year

which are up 35 percent over last year, according to Blazer.

He added that convenience is what draws folks in.

“You don’t have to make an appointment. You don’t

have to go sit in a doctor’s office. You can come in, get your shot, wait 15 minutes to make sure you don’t have any allergic reaction and then be on your way.”

Private label offerings provide quality, value, satisfaction

by Jack R. Jordan / content creator

The family of brands at Food City, The Shelby Report of the Southeast’s Retailer of the Year, includes thousands of items across nearly every category.

A combination of nationally recognized and local private label offerings provide customers with quality and value. Each brand is backed by a 100-percent satisfaction guarantee. If customers aren’t pleased, they can get a refund or free replacement.

The list of brands includes recognizable names such as Crav’n, Food Club, That’s Smart! and Simply Done, among others. The company has its own branded items under the Food City, Food City Premium Ice Cream and Food City Fresh brands. The retailer keeps longtime branding partnerships with local brands referred to as “legacy brands.” These are exclusive to Food City and include Kern’s Bread, Kay’s Ice Cream, Lay Meats, Terry’s Snack Foods and Moore’s Potato Chips.

Food City has restored these brands that had “fallen by the wayside” by recreating them as close to the original recipe as possible, according to Drew Hembree, VP and managing partner of JCS Sales, K-VA-T Food Store Inc.’s internal brokerage unit that predominantly covers private label.

Food City is a member of Elk Grove, Illinois-based Topco. This relationship, along with its own and legacy brands, gives the retailer a distinct advantage.

JCS represents more than 200 companies of various sizes that make up the portfolio of private brands.

“You have some, like Treehouse Foods, which is a big company, and they make 200-250 SKUs for us. Then you have some that are very specific and only make one SKU. We have one company that just makes one brand of mouth lozenge for us. So to do that, we really do lean on Topco,” Hembree explained.

K-VA-T does not have a quality assurance lab, making the partnership with Topco vital to maintaining quality. Topco is continuously testing and cutting products that don’t meet quality requirements.

“We don’t have as many Food City branded items as we did in the 1990s and early 2000s, but people know that Food Club and Crav’n are Food City brands. If we’re going to put our name behind it, we want to make sure the quality is there,” Hembree said.

In one instance, Food City was able to contact the original founding family of Kay’s Ice Cream to get the recipe.

“We take great care in trying to match as best as we could to the original recipes…we’ve been able to get some of those original formulations to be faithful to the names that we’re putting back out there on the packaging,” Hembree said.

As customers continue to see their grocery bills rise, private-label brands have become an important part of their baskets. Part of Hembree’s job is to ensure that Food City’s offerings maintain a “strong gap between national brand and entry-level private label.”

Private label is separated by Food City into three categories – entry-level, first tier and premium. Food City’s That’s Smart! is the company’s highest value entry-level brand, with hundreds of everyday essential products across the store.

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From page 57

High-value brands have become important to Food City and its customers. They help Food City compete against competitors, build relationships with customers and continue to deliver on the quality guarantee. Hembree said he learned when starting out in the industry that providing offerings that appeal to any customer is the best way to provide value.

“When I was working at a store as an assistant manager, it instilled in me the need to treat everybody with respect, but have an offering out there that can hit every single demographic. Because you never know what somebody’s situation is. Some situations are permanent, some situations are transitory. But to have a good quality offering out there at a price point is what we offer. It’s what That’s Smart! offers. And that’s what we use to fight [the competition],” he explained.

Food City has some of the highest brand penetration among Topco members. This has created consumer confidence. Some of the brands that Food City offers,

Retailer of the Year

such as Food Club, have been part of the company’s portfolio for more than 20 years. As the retailer moves into new markets – including its expansion in Alabama – that trust needs to be established.

“We make sure that around 35-40 percent of all planned displays are private label,” Hembree said. “It doesn’t have to be competing items, it can be complementary items. We work to make sure that we have a presence, that we have our fair share of ad space, making sure that we’re top of mind when it comes to digital ads and make sure new and exciting offers are brought with any of the things that we’re doing differently,” Hembree said.

He added that he sees single solution brands such as Crav’n – which “blurs the line between national and private label brands” – to be the future of private label. Crav’n began as a cookie and crackers brand but has expanded into more categories, including frozen and meat. Offering premium brands like Crav’n and Simply Done gives Food City an advantage.

It’s ‘all about servicing our stores so they can service our customers’

by Jack R. Jordan / content creator

Food City, The Shelby Report of the Southeast’s Retailer of the Year, has been self-distributing for a long time. Bolstered by a central distribution center in the same town as its corporate headquarters, Abingdon, Virginia, the DC is the main distributor for all Food City locations.

It continues to handle the majority of distribution for the company, according to Greg Sparks, SVP/ COO. The 1.2 million-square-foot facility also houses a Misty Mountain Spring Water bottling facility, which bottles pure spring water for Food City locations as

well as producing private label water for several other retailers.

Due to Food City’s growth to the west and south, the company partnered about 18 months ago with Associated Wholesale Grocers to help bring dry groceries to those areas, Sparks said.

“We were getting tight in our existing facility here. It’s a good-sized facility, but as our volume increases – and also geography – you start looking at the miles we were driving – it just made sense to partner with them,” Sparks said. “Since most of our growth is coming from their direction, they’re able to handle our growth in the next few years.”

He went on to note the need for further distribution avenues as the company looked ahead five to 10 years, describing it as “a nice problem to have, really.”

All the decisions the company makes are about putting the customer first. The DC prides itself on shipping more “single packs” than its competition. Food City locations may buy a few individual packages, whereas other distributors require a minimum purchase.

“And the whole purpose of that is to serve stores what they need to take care of our customers. If it’s an item that moves real slow, they may not want to order a full case. It all starts with the customer and we work our way back,” Sparks explained.

Food City has a dedication to freshness. While AWG does handle some distribution of dry groceries for stores farther away from the home office, all perishable items – including meat and seafood, produce and floral – come from the Abingdon DC. Food City

retailers typically receive these perishables “every other day,” according to Bucky Slagle, VP of produce/ floral operations.

Retail Reserve Team

The COVID-19 pandemic brought many changes to the way people conduct business. Layoffs were frequent during the shutdown, but not at Food City. Since the company’s first store opened in 1955, it has never laid off an employee, Sparks said.

When the shutdown officially began, leadership at K-VA-T Food Stores Inc., Food City’s parent company, convened to decide the best course of action to get products in stores.

Products flew off store shelves at a rapid pace. There were multiple days of shipments leaving the DC that broke previous company records.

“And we were sitting here saying, ‘How are we going to get products to the stores?’ At the time, we had about 700 associates in our distribution center. We now have over 900,” Sparks said.

It was eventually decided to establish what is now called the Retail Reserve Team. During the pandemic, one stocker associate was taken from each store around the Abingdon area, closest to the warehouse, as well as others who volunteered to help from the Corporate Support Center, and placed on a fasttracked training program to get them in the warehouse. Within the first week, more than 100 retail employees began work in the warehouse.

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From page 59

“We did the math. We had several associates that lifted over a million pounds in a week’s time. We just had good people who wanted to get products to our stores,” Sparks said.

The Retail Reserve Team is still in effect. It consists of about 50 associates from stores in the surrounding area and the company’s headquarters. The team is most often called up when business surges, such as large holidays or major weather events are expected to drive sales.

“It does allow the distribution center to kind of flex up, keep deliveries on time, get the product to stores as needed. But it’s also helped in the development of our stores’ associates,” Sparks said. “They see what happens in the warehouse, and they see what all goes on. And now we have all of our assistant managers, in their training process, go through a stint on the Retail Reserve Team at the warehouse.”

Flexibility proves crucial

As the Food City banner continues to extend farther from the company’s distribution center, having people to man the facility is more important. The Retail Reserve Team is a nice backup to keep up with surges of demands but how does K-VA-T retain its 900-plus associates?

“It gets down to flexibility and working with scheduling, offering incentives. We just try to be more flexible with associates,” Sparks said. “It all gets down to training to make sure people are trained. Not on how to do their job, training them about the company culture and what we’re all about. We’re all about servicing our stores so they can service our customers.”

2023 Southeast Retailer of the Year

These incentives include a 90-day referral program, perfect attendance awards and long-term benefits such as the company’s employee stock ownership program. The referral program includes two bonuses. An associate receives an initial one for bringing on a new hire. If that person completes 90 days, a second bonus is issued.

The company has been reorganizing its training program since the pandemic. Sparks said warehouse employees might previously have had a different trainer “this week, the next day or the next week. Now

we’re much more structured and we have people that they primarily train.”

Within the past year, K-VA-T Food Stores has implemented a CDL driver training program that comes at no cost to associates. The program is funded wholly through partnerships with local community colleges. The associates take a 13-week course to get CDL certification. Before taking routes, newly certified drivers work alongside an experienced driver for four to six weeks. The program has seen good results, according to Sparks.

E-commerce experience exceeding customers’ expectations

by Jack R. Jordan / content creator

Abingdon-based Food City, The Shelby Report of the Southeast’s Retailer of the Year, has offered e-commerce since 2015. It began with GoCart, the retailer’s curbside pickup platform.

Today, Food City’s e-commerce includes internal programs, partnerships with third parties and a robust savings program to bring the best experience to customers, according to Kevin Stafford, VP of marketing.

GoCart promises same-day pickup in as little as three hours with no minimum order required. Introduced at 10 locations, it has grown to 100. There is a $4.99 pickup fee that can be waived if customers buy enough of a participating brands’ products.

“It’s our website, our mobile, our professional shoppers, which I think makes the difference in our stores,”

Stafford said. “The professional shoppers are trained to look for that fresh produce or that fresh meat. There’s an extensive training process to go through for our professional shoppers to make sure they can meet the demands of the customer.”

Food City offers a survey to GoCart users after each order. Ninety-five percent of them say it is “exceeding their expectations,” Stafford said.

the shopping experience. They can give personal shoppers instructions, such as to look for extra-ripe bananas. Customers can also use a variety of payment methods, including SNAP EBT.

The app and website were co-developed by Food City and Knoxville, Tennessee-based Aisle Ahead, keeping with Food City’s efforts to remain local whenever possible.

“We talk about local. We talk about local produce. We also try to keep things local when we can,” Stafford said. “And we’ve had a great partnership with Aisle Ahead...we’re nimble in what we do. We also have our own picking app.”

The picking app allows shoppers to scan items with their mobile devices as they shop to provide another avenue for checkout.

Food City has partnered with Instacart since 2017 for grocery delivery. Customers use the platform’s app or Food City’s white label site, foodcitydelivers. com. DoorDash is the most recent extension of the company’s e-commerce offerings.

While pickup is not available at every Food City location, “every town is covered.” At least one store in all of the retailer’s market areas offers it. And as Food City continues to expand and update stores, adding GoCart is always considered.

“We think it’ll be just the same as any other convenience that a customer wants. You got to have the staging area, you got to have room for cold storage,” Stafford explained.

GoCart differentiates itself from other retailers’ pickup services by letting customers personalize

“Now on DoorDash, we kind of have a three-legged stool. We have foodservice, floral and grocery pickup offerings. If you want a slice of pizza or one of our hot bar meals, those are available,” Stafford explained.

Floral delivery continues to grow as more people discover the service, Stafford said. He believes many customers found the offering useful on Valentine’s Day.

“You wouldn’t think floral would be as big of an offering, but Valentine’s Day it was unbelievable. We

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2023 Southeast Retailer of the Year

From page 61

rolled out the service in June or July of last year. In one day, Valentine’s Day, we did more than we did in the entire year. We have seen excellent growth after,” Stafford said.

Customers can get the full Food City experience on the company’s website, foodcity.com. They can place orders for customized cakes, party trays, Grab N’ Go food or ready-to-heat meals; create a pickup order; view sales; access their ValuCard membership benefits; and find recipes.

Food City’s ValuCard is described on the company’s website as the “most valuable thing in your wallet.” Customers can use the ValuCard to access special

FEEDBACK

What customers had to say about GoCart on Food City’s website:

pricing, earn fuel points, support local schools, get access to ValuCard partnership discounts and join free clubs.

ValuCards are tailored to customers’ needs. Customers with children can join the Food City Baby Club or Food City Kid’s Club and link their cards to their child’s school. The kids and baby clubs feature special coupons, offerings and events, and the company will send each child a birthday card. Parents can earn money for their child’s school through the company’s School Bucks program.

Food City also offers a pet club and wellness club, which come with their own benefits. Members can also get special discounts with corporate partners such as $3 off admission at Ripley’s Aquarium in Gatlinburg, Tennessee.

“Best service of its kind available. Offering comment boxes for each product lets me tell the shopper stuff about what I’d like, and then texting me lets me know when things aren’t available and what I can substitute. Other services offer neither. Love this service.”

“I absolutely love this service. Every time I have used it, I have always been extremely pleased. Shoppers are very responsive and amazingly friendly. Love it!”

Family-based culture, atmosphere key core characteristics

by Jack R. Jordan / content creator

Food City, The Shelby Report of the Southeast’s Retailer of the Year, is in the people business, according to its president, Steve Smith. The grocer focuses on growing from within through its people while continuously exceeding customer expectations.

“Food City is very unique when it comes to growing our own. Many of our store managers, department supervision, support staff and senior leadership started at the bottom and were provided the opportunity to work their way up the ranks. At Food City, you’re not just a number. Our commitment to the communities we operate in is unmatched by our competition and is not only encouraged by our leadership but expected. Having the opportunity to help develop our associates and seeing them be successful over the past 30 years has been – and continues to be – the best part of my job. I enjoy the culture of our company and the freedom it gives me to run the best store in town.”

Raymond Stockard Store Manager for Food City No. 605 in Kingsport, Tennessee

It all starts with hiring.

“Calm and friendly and making sure we bring the right teammates into our organization to move forward,” said John Jones, EVP/director of store operations. “We’ve got people that come with us at a young age and work their whole careers here, which I think is exciting. And we’re a melting pot.”

As Food City has grown its footprint, the company has created a unique environment for associates. Its “family-based culture” is readily apparent. At the same time, it hopes to continue to learn from others.

“We’ve been very fortunate over the years to take in new stores and their teammates and be able to work with them on our culture, but also learn something about their culture, what makes them special and what that can do for our business,” Jones explained.

To honor associates who join the company via acquisition, Food City recognizes their hiring date on name badges.

“People are proud of those years that they’ve been somewhere, so we honor that and they keep that date with all the benefits that come with that date…length of service is important. It’s important to us and it’s important to the people who served it,” Jones said.

The retailer recognizes different lengths of service by awarding pins, watches and other keepsakes.

Jones himself has been with Food City for 43 years. When asked why he has stayed so long, he credits the culture.

“I think people work at a certain place for different reasons. But for me, it’s a family-based culture, it’s a family atmosphere,” he said. “I’ve felt like I can

contribute here. I enjoy seeing other people succeed around me and seeing young people come up and do different things. Not a lot of people here get real caught up on taking credit for things. We work on it together and take credit together.”

When Jones started with the company, Food City was a predominately retail business. It has since expanded into distribution, procurement, marketing, advertising and other areas. This leads to Food City’s

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“Food City deserves to be named Retailer of the Year because our motto is to run the best store in town, and we absolutely do run the best store in town. The company believes that the customers deserve the best and they do everything possible to achieve it. I enjoy working at Food City because they not only care about making customers happy but also their associates. I feel like they do whatever is possible to make our jobs easier and make us happy, as well. I have worked for them for 24 years and I wouldn’t want to work anywhere else.

Nicole Young Meat Manager for Food City No. 823 in Abingdon, Virginia

‘Commitment to communities unmatched’

‘Wouldn’t want to work anywhere else’

From page 63

unofficial policy of “cross-pollinating” employees.

Cross-pollination refers to cross-training employees to understand as many different aspects of the business as possible. They are encouraged to step out of their comfort zone to experience different parts of the store or company, Jones said.

“I’ve got several meat managers who are store managers,” he said.

Associates can show initiative and volunteer for cross-training. As they move up the leadership chain, store and hiring managers are encouraged to speak with associates to gauge interest, encourage growth and recommend training paths.

“When I mentor or talk to younger people who say they want to do what I’m doing, I encourage them and say, ‘You need to learn these other parts of the business. You need to learn merchandising, you need to learn marketing, you need to learn warehousing, you need that total experience.’ I think that encourages them to be well-rounded. And I think it’ll help

2023 Southeast Retailer of the Year

them as they try to advance,” Jones explained.

Katie Penny, district manager-Chattanooga division, went through the manager training program after joining Food City full time in 2020. She said it was a way for her to “fully understand and appreciate the business as a whole.” She sees it also as a tool to develop and place people in the correct environment.

“The pipeline [is] full of people to be ready for the new stores and new developments we’ve got coming up,” she said. “We’ve got to keep them growing, keep them learning. And it excites me to see people rise to the challenge when they come out of those training programs.

“We do that strategically with the right store manager to help get them ready. I’ve probably got two or three in my district right now that are on oneto two-year plans to take on a store because that’s what the business needs. And they understand their role and responsibilities and know how to make an impact on the communities.”

“Food City is the absolute best place to work in our area. We have a company culture that does not exist in many retail businesses. There is the opportunity for advancement and great benefits, including profit sharing and 401K. It is a culture where you are in a family-type atmosphere and are not just a number. There is a CEO and vice presidents who know your name, ask about your family and your concerns. There are company paid training programs in every department for anyone willing to advance and stay with our company. Our company is one of the best at helping raise money for area charities…we all have our challenges every day, but we continue to do our best to run the best store in town. I love working at Food City for many reasons. “In the beginning…they worked around my schedule. [They] presented a lot of opportunities that were not usually available in this business for women. I am so grateful for the advancement opportunities I have been given in the company. Now I am one of many who are trying to grow and teach our next generation of managers. We have great senior leadership, great family environment and the opportunity to advance.”

Malinda Sallee Store Manager for Food City No. 820 in Weber City, Virginia

Culture is ‘familytype atmosphere’

‘We’re nothing without our community being successful’

by Jack R. Jordan / content creator

Community involvement is at the center of Food City’s legacy. This year, the company is celebrating a decade of giving more than $60 million to local and national community organizations.

Food City, The Shelby Report of the Southeast’s Retailer of the Year, partners locally with a variety of nonprofits, including veterans groups, hunger relief organizations, civic clubs and animal shelters, to benefit its market areas.

“I think one of the coolest things that we do is encouraging our people to get out in the community and do something that they’re passionate about,” said Katie Penny, district manager-Chattanooga division. “We’re nothing without our community being successful. We just like to help out with our communities and continue to do good things.”

One of Food City’s most successful initiatives is its School Bucks Challenge program, which has contributed some $21 million in equipment to more than 1,000 area schools. Customers connect their Food City ValuCard to a local school to earn points on eligible purchases. The more points earned, the larger amount of funding the school will receive. During the 2022-23 school year, $700,000 was made available for schools.

As the company continues to expand into different markets, getting new schools involved with the program is a priority, according to Kevin Stafford, VP of marketing.

“When we go into new markets, we try to really encourage schools to be part of this program. Some

of those major schools, we’ve done some donations to them to say, ‘Hey, I know the School Bucks program isn’t available to you yet, but here it is.’ And I think that’s a beautiful thing.”

The company’s annual Race Against Hunger campaign provides more than $500,000 in hunger relief alongside its Friends & Pets in Need campaign, which raises about $250,000. Both events help fight hunger.

Customers are invited to make a donation while checking out during Race Against Hunger. Likewise, during the Friends & Pets campaign, customers can purchase specially marked bags for $10 that contain a variety of non-perishable groceries or pet supplies which are donated to local organizations.

The company has raised more than $3 million to benefit Paralyzed Veterans of America and also supports many other organizations, including United Way, Susan G. Komen, The American Cancer Society, American Heart Association and Second Harvest Food Bank. It raises more than $500,000 annually in support of the Juvenile Diabetes Research Foundation.

The company has a separate fundraising organization, Food City Foundation, that works for these and other causes. The annual Food City Charity Golf Tournament is one of the company’s largest single fundraisers.

This past year, the tournament totalled nearly $2 million. Likewise, the company also holds its annual Food City Invitational For Education golf event, which supports the company’s School Bucks program.

“These things are important for us because our vendors, our associates understand that they’re giving their time and their resources…We’re going to be good stewards to give that money back to the communities where we operate,” Stafford said.

Internally, Food City celebrates its associates who go above and beyond for their communities with the Claude P. Varney Volunteer Recognition program. It is named in memory of the former president and board vice chairman for 47 years.

The program celebrates achievements in the areas of health, education, environment, cultural arts, recreation, heritage/history and public service. An independent panel of judges, usually from nonprofits, judge the resumes of nominees who are put forward

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Paralyzed Veterans of America 2022

by their co-workers. One winner is selected from each Food City store. From there, 13 district winners are selected, followed by two divisional winners. The program culminates in one honoree receiving the Claude P. Varney Humanitarian Award.

This year’s winner was Jim Watson of Abingdon, Virginia. Watson has worked at the Food City Distribution Center for 30 years and volunteered with St. Jude Children’s Hospital since his son, Cade, was diagnosed with brain cancer in 2010. Through St. Jude’s programs, the Watson family lived in Memphis, Tennessee, for nine months while Cade received treatment. The family never received a bill for treatment, housing, travel or food, according to a news release.

Watson’s son made a full recovery and now works alongside his father at the distribution center.

Since then, Watson organizes fundraisers to benefit St. Jude and raise awareness of childhood cancer. Over the past 12 years, he has raised more than $760,000.

“I am very grateful for winning this award, but to me this is about the kids of St. Jude and this award is for them,” Watson said in the news release.

2023 Southeast Retailer of the Year

In recognition of his award, Food City made a $1,250 donation on Watson’s behalf to his charity of choice. Likewise, Food City made a $750 donation on behalf of the two divisional winners, Janet Little-Edge of Bluefield, Virginia, and Shelly Roach of LaFayette, Georgia.

Understanding community

Aside from charitable work and contributions, the company believes in investing in its local communities.

“I put it in really simple terms,” Stafford said. “If the stores and the communities are both successful, the only way that happens is the stores have to plug into those communities.”

The retailer also encourages every new store to join the local chamber of commerce prior to opening.

The company advocates for each store’s leadership to be involved within the community by joining civic

community. In addition, Stafford said the marketing department is “flooded” with requests to further allocate funding to stores.

“We literally get thousands of requests that come through and we approve or deny every single one of those requests, and we try to make sure we allocate the stores in a way where they’re plugged into those communities,” he explained.

Corporate partnerships

Every community is different and understanding that community is how Food City continues to find success.

“Once we understand what’s important, we can understand the people,” Stafford continued.

clubs. Food City covers the costs.

Similarly, Food City provides an allotted budget that store leaders are required to spend within the

Corporately, Food City sponsors major organizations or events that appeal to local markets. For example, Food City is the official supermarket of the University of Tennessee, the University of Tennessee

Jim Watson, Claude P. Varney Volunteer Recognition Award recipient

Girls Inc. of Bristol

at Chattanooga and the University of Virginia’s College at Wise in Wise, Virginia, among others.

The company’s largest partnership is with Bristol Motor Speedway and NASCAR. Food City is the official supermarket sponsor of BMS, and since 1992, has been the title sponsor for multiple races there, including the NASCAR Xfinity Series Food City 300 and the Cup Series Food City 500 (Food City Dirt Race).

“The Food City name has become synonymous with NASCAR racing in the area with the sponsorship of two of the sport’s most popular races. As the secondlongest running sponsor in NASCAR, we have also contributed over half-a-million dollars to local organizations through our annual Family Race Night events,” the company’s website states.

Disaster relief

“When disaster strikes, this company is looked upon by local leaders to make a difference,” Stafford said.

Food City, along with its parent company, K-VA-T Food Stores Inc., hold fundraisers following disasters. Last year, the retailer led a fundraising campaign to benefit those affected by July storms in eastern Kentucky. To kick it off, K-VA-T pledged $25,000, as well as providing water and dry groceries.

Similar campaigns were held in recent years to benefit those affected by floods in Hurley, Virginia, and a tornado in Cookeville, Tennessee.

Quick community response is an expectation of President and CEO Steve Smith.

“There’s a number of times like that. And that’s the expectation from Steve. We’re going to not only be plugged in the communities, but we will take care of the communities where we operate stores,” Stafford said.

K-VA-T supports its associates when disaster strikes via the K-VA-T Associate Relief and Emergency Fund. Associates who have fallen on difficult times due to home fires, natural disasters, medical emergencies or other events can find support through the KARE fund. Since its inception in 2006, the fund has awarded more than $2.2 million to qualifying associates. The KARE fund is maintained through voluntary payroll deductions. About 45 percent of associates contribute to the fund, according to Food City’s website.

Foundation for Appalachian Kentucky

Feeding America

Charity golf tournament