Exceptional Independent Retail Organization of the Year
ESOP status, awards program for store managers helping HFG shine
Houchens Food Group started as a single store in rural Glasgow, Kentucky, in 1917. That store – a 12-foot by 24-foot building – still stands as a testament to the tenacity and growth of the company over its 107-year legacy.
Ervin G. Houchens founded the company with a single store, fulfilling a need he saw in his immediate community. Boldly expanding the store count with three locations during the Great Depression, the company continued to grow in store count and sales volume into the 1970s with 55 locations.
“An important piece of our history is that Mr. Houchens saw the importance of the employees taking ownership in our business and started a profit sharing back in the ‘60s, which was somewhat unusual at that time. It’s an interesting piece of our evolution, because years later we became a 100 percent employee-owned company,” said Greg Rush, the company’s president.
At age 85, Houchens retired, and his son, Rural Houchens, became president. But the decision was made in the mid 1980s to sell the company. A few years later, in the late ‘80s, key members of the leadership team at the time came up with the idea of buying the company back from the ownership group and to create the ESOP.
“In the ‘90s, we saw – specifically in our area – that the competition of Kroger and Walmart was making it more difficult to operate independent grocery stores. We saw in the Save A Lot mode a way to cater to the budget-conscious customer with a unique discount grocery brand,” Rush said.
Houchens Food Group Inc. operates more than 300 grocery locations in mainly rural and mid-size metro markets across 15 states.
“All our employee-owners should be immensely proud of the growth and success of their company,” Rush said.
ESOP
In the late 1990s, the company began to diversify. Houchens leadership saw that the ESOP, based in one industry, was vulnerable to changes in the economy.
“With a retirement plan, you want that to be stable
over time, and value was seen in diversification,” Rush said. “That led to our first acquisition, a small chain of convenience stores, propelling us into the convenience and fuel businesses. To drive further diversity, the second acquisition was a tobacco manufacturing company.”
Houchens Industries would acquire several other locally owned businesses, including insurance and construction in the early 2000s.
“Ultimately, the tobacco company was sold in the mid-2000s, and we’ve continued to evolve and diversify to the current company, which includes 14 subsidiaries. Houchens Industries is one of the largest and certainly the most diversified ESOP in the country,” Rush said.
Today, Houchens Food Group, a subsidiary of Houchens Industries, comprises 400 retail locations, including grocery, convenience, restaurants and hardware. HFG has about 40 ACE Hardware stores and 20 restaurants that include Sonic and Slim Chickens. It also has eateries inside of some of its convenience stores, such as Subway, Schlotzsky’s and Which Wich.
“Even within the food group, we have diversification in formats and businesses,” Rush said.
He went on to note the ESOP has been a valuable tool to retain quality employees because there’s a longterm positive impact.
“The beauty of the ESOP is that, unlike a 401(k) savings plan – where you’re taking some money out of every paycheck to fund your future retirement – it is completely company funded.”
According to the Houchens Industries website, every year eligible participants receive a stock contribution related to the release of shares and reallocation of forfeitures in accordance with the plan document. These annual contributions are made entirely by the company and never involve employee contributions.
“We publish on our website the historical rates as a percentage of employee income, and that rate has sustained in the low teens,” Rush said. “If you think about it from a 401(k) perspective, many plans will match up to a certain point.
“But even if you take the company contribution and the employee contribution, that mid-teen number that we’ve been trending is actually better than a historical 401(k). There’s no guarantee of that, but historically
ABOUT THIS SECTION
Houchens Food Group is a subsidiary of Houchens Industries, an employee stock ownership plan (ESOP) that includes 14 other subsidiary companies. Houchens Industries is highly diversified with businesses in construction, insurance, pharmacy, pet and retail.
HFG has been recognized as The Shelby Report’s Exceptional Independent Retail Organization. The company launched a new program this year, Store Manager Appreciation Awards, to recognize the importance of these men and women and the role they play in leading their stores and impacting their communities. For this EIRO salute, Shelby’s Stephanie Reid and Treva Bennett visited with many HFG executives, employees and partners to learn what makes the company so successful.
we’ve had very good performance from the ESOP.”
Since the inception of the ESOP on Nov. 12, 1988, employees have been paid cumulative benefits of more than $2 billion, according to the website.
“We refer to each other as employee-owners. Once you become part of the ESOP, this is your company, and these are your dollars that we’re spending … or these are additional dollars that we are being rewarded from our customers in the form of sales,” Rush said.
Store Manager Appreciation Awards
HFG hosted luncheons for its grocery store managers as part of its inaugural Store Manager Appreciation Awards program. A total of 18 events were held, with each culminating in naming a Local Store Manager of the Year. An overall winner for the company will be named in a January celebration in Bowling Green.
Rush said the idea for the SMAAs came about through discussions with corporate leadership.
“As a leadership team, we had been talking internally about the importance of the store manager to our financial results, to the health of our company. We rely tremendously upon the store manager,” he said.
“When you operate 400 retail locations across 15 states, you’re putting the keys of our business into 400 store managers’ hands. And with the structure that we have being an ESOP, they literally own that store’s results and are responsible for that small business.
“We’re ultimately a group of 400 small businesses, and it’s easy in a company this size to neglect the importance of that role.”
During these discussions, an increase in employee turnover was noted.
“It’s been more difficult to retain talent postCOVID at the store level. From this conversation about the importance of the store manager, we were challenged on how we adjust our budgets and invest more in our store managers,” Rush said.
“We need to invest in more training; we need to provide them with all the tools that they need to successfully operate these businesses. But also, it’s important for employees to know how important they are to our business.
“From those conversations the idea of SMAAs sparked to life and we went to Jimmy [Nichols, former HFG president] and sketched out a playbook on what we could do. He was immediately on board and encouraged us to take this ball and run with it. So that’s what we’ve done.”
The events began with the division VP of operations letting the store managers know why their role is vital to the health of the company, how important they are from his perspective and how much HFG appreciates the work they do each day, Rush said.
Two industry speakers addressed those gathered, sharing their backgrounds and history and providing motivational and leadership lessons. They also talked
Please see page 16
Greg Rush
Exceptional Independent Retail Organization of the Year
about the importance of store managers. Shelby Publishing’s President and COO Stephanie Reid committed to speaking at 17 of the 18 events.
After lunch, the HFG district manager had an opportunity “to brag on their store managers,” Rush said. “They talked about them and what makes them so special as a store manager.”
For Rush, those are the most impactful moments, “hearing those district managers tell about their relationship and the importance of each and every manager that works within their district. It’s really very honorable and so meaningful to have that person recognized in that way.”
A number of awards are presented, in addition to the Store Manager of the Year. These are decided by the operations team to recognize multiple store managers for their skills and strengths.
“We have the Hometown Hero that gets awarded to store managers who are going above and beyond and being active in our communities,” Rush said. “As an independent grocer, we value being part of a community – supporting the local sports teams, being active in local chamber events or local fairs or just different community gatherings.”
Emerging Leader awards also are presented. These typically go to younger store managers, but also maybe to someone “growing in their position,” Rush said.
The high point of each event is naming the local Store Manager of the Year. Rush said HFG has a scorecard that looks at the metrics store managers are graded on as part of their review process – sales, payroll and EBITDA.
Also included are subjective measures the company values – store culture, people development, merchandising and community involvement.
The Store Manager of the Year is the one who has the highest scores on their scorecard for the first two fiscal periods of HFG’s fiscal year, which runs from October to September.
All Store Managers of the Year receive a trophy. Also, Reid is presenting each of those honorees with a Shelby Publishing Exceptional Independents Award.
The overall Houchens Food Group Store Manager of the Year will be selected on Jan. 16. “We’re going to have a celebration in Bowling Green at Houchens Industries
L.T. Smith Stadium on the campus of Western Kentucky University, where we will recognize the HFG Store Manager of the Year.”
The winner also will be HFG’s IGA Retailer of the Year nominee. He or she will attend The NGA Show in Las Vegas, co-located in February with the Independent Grocers Alliance, and also will be recognized at The NGA Show by Shelby Publishing.
Rush said the SMAAs have been a success. “We have had overwhelming positive feedback on the SMAAs from all levels of management. The store managers are highly appreciative.”
Ongoing event
Rush said HFG plans to make the SMAAs an annual event. “We’re already talking about how to elevate this in 2025. How do we continue to make it special year after year?”
He said that the awards program has fired up the competitive spirits of the store managers.
“They want that scorecard. They want to win … This year, it was a surprise to everyone, and everyone got caught off guard. But next year it won’t be.
“They’re going to be working toward being that Store Manager of the Year. I think it’ll have a very positive impact on our businesses … It’s engaging a competitive spirit among our store managers at a local level and at a total company level.”
Although each event “feels a little different,” depending on the geography or the district leadership, Rush said it’s “weaving a common thread throughout Houchens Food Group of competitive spirit, of a positive and appreciative culture in regard to our store management team.”
‘It’s a huge family of companies’
“I hadn’t thought about retirement … when you’re young, you’re busy living. So the fact that this whole time, they’ve made contributions based on our success, which I’m a part of, I think that makes a big difference, especially as you get older.
“It is that incentive and that elevated responsibility as an employee, knowing that you’re part of those contributions, you’re part of the profit. The whole company – not just their department or just their particular store location, or just their company – is part of the big umbrella of what is Houchens Industries.
“I think it’s important that we recognize that it’s a huge family of companies, and the diversification that’s in the plan now, it is the best it’s ever been. We’re all different industries, but we’re all coming together to be this huge team that is Houchens Industries, and there’s just nothing that can beat that.
“If everyone does their part, we will continue to do well and be very, very successful.”
– Susan Tweedy, retired management and information systems analyst
Charity Karle from Store No. 621 in Defuniak Springs, Florida, was named Store Manager of the Year for her HFG South district.
Ben Hogan from Store No. 640 in Abbeville, Alabama, was named Store Manager of the Year for his HFG South district.
Cassidy Little from Store 631 in Bay Springs, Mississippi, was named Store Manager of the Year for his HFG South district.
Exceptional Independent Retail Organization of the Year
At HFG, employees ‘feel appreciated and respected’
Adam Fowler, district store supervisor for the North Mississippi District, started his career in the grocery industry in 1988. He has worked with Houchens Food Group and been a member of its employee stock ownership plan since 2001.
“Being an employee-owned company is a wonderful feeling, knowing that your performance has a direct impact on the success of the company, which in turn has a direct impact on your financial future by being an employee-owner,” he said.
“Being part of the ESOP gives me great comfort in knowing that when I retire, I will have the financial means to live comfortably and not having to worry about if Social Security benefits will be enough to sustain me and my wife in our golden years.”
Fowler said HFG is a wonderful company, and he looks forward to working there for many more years.
“At HFG, you are more than a number; you are a name, you are somebody. You feel appreciated and respected, and our leaders have done an outstanding job of investing in our futures as employee-owners. Not only in the monetary benefit of the ESOP once we retire, but also in our individual growth through different training programs and events.”
Through these events, Fowler said they have been able to expand their relationships with their co-owners throughout HFG.
“It is very nice to be able to meet and get to know your counterparts in other states and areas. You can share stories, and you can learn from each other’s experiences.”
He said the company is focused on improving its technology, accounting and reporting “to help all of us be better at what we do.”
HFG is also community minded, Fowler said, and supports the local communities where it operates its stores, whether through fundraising events or HFG employees volunteering at community events.
“All these things and many more are why I believe HFG is deserving of this recognition,” of being The Shelby Report’s Exceptional Independent Retail Organization. “It is an honor to work with such a wonderful community of employee-owners that makes up what we call Houchens Food Group.”
‘Important to think about your future’
“It feels good when you’ve worked with people and they’ve retired, and you see how well they’re doing. They’re not having to take a second job, some parttime job somewhere … they’re able to live comfortably. They’re able to just do what they want to do, and all they had to do is just work hard.
“You have to work somewhere, make a living, so you might as well work somewhere that’s going to benefit you. When I first started, I was young, and I just wanted to work. I wasn’t even thinking about retiring. But it is important to think about your future.
“And when you have success stories … you see that these people are retiring and doing well for themselves, it makes you feel good to be a part of that, to have that lined out for you and your future as well … don’t just look at it as a job or something to do, but take pride in it. Make a career of it.”
– Stephen Goodbar, Scotty’s Contracting & Stone
‘Large company that operates like an independent’
John Livingston, VP of HFG South division, has been with Houchens Food Group for nine years.
The South is the southern territory of HFG, with stores in South Alabama, Mississippi, southwest Georgia and the Florida Panhandle.
“Houchens is a large company that operates like an independent with all the benefits of being a large company. Stores are operated regionally versus being centrally controlled,” Livingston explained. “This allows for localized merchandising, marketing and community involvement that keeps us competitive in the markets we operate.”
According to Livingston, Houchens has made being an ESOP company “a point of pride.”
“Employee Owner is printed on our name badges and displayed on the walls in most of our locations as part of the store décor,” he said. “We want our customers and communities to know the store they support is not just any store but a store where the employees have ownership in the business.”
Livingston added that while retirement is not always something people think about when they’re first getting started in the business, it becomes a very important topic and benefit over time.
The new Store Manager Appreciation Awards program allows HFG leadership to recognize store managers in a setting away from the store. It is “so much more than just a pat on the back,” Livingston said.
“It’s an opportunity to genuinely show our appreciation for the hard work, effort and dedication that they put forth to making sure our stores are being managed to meet the needs of the communities we serve.”
He noted that there has been a lot of turnover in key management positions, specifically department and store managers, over the past several years.
“With a new generation of leaders emerging, it’s more important now than ever to recognize our managers and the role they play in the overall success of their store and the company,” he said. “Often in today’s fast pace, management hears about the things they need to be working on – an area of opportunity – as supervisors visit their stores. Recognizing the wins and encouraging our store managers through events like SMAA can be very impactful.”
He said the SMAA program has been well received and store managers’ comments have been supportive. HFG also recently launched an “Above and Beyond” program to recognize hourly associates.
The company has been selected as The Shelby Report’s Exceptional Independent Retail Organization. Livingston said the honor is deserved.
“HFG is committed to the local communities we serve, to the employee owners we have in each of our stores and the continued success of our company. Our team is focused on providing fresh, wholesome food to our customers at the best value possible, while maintaining the financial health of the food group and our overall contribution to the success of Houchens Industries.”
At the South Alabama District event, Tammy Peterson of Pic N’ Save in Florala, Alabama, was named Store Manager of the Year.
At the HFG North Division event in June, Kathy Fischer of California Marketplace in California, Kentucky, took Store Manager of the Year for the East District.
John Livingston
Adam Fowler
Exceptional
Retail Organization of the Year
Evolution of Houchens Food Group through the years
Employee-owned with global prestige
In 1917, Ervin G. Houchens founded Houchens Foods in Glasgow, Kentucky. A century later, Houchens Industries comprises more than 14 operating companies in various industries, including retail, manufacturing, construction and insurance, generating an annual revenue of more than $4 billion.
For more than 30 years, Houchens Industries has been employee-owned through an ESOP and has more than 19,000 participants, making it one of the largest 100-percent-employee-owned companies in the U.S. Employee ownership allows employees to share in the success of the company and build retirement benefits through participation in the ownership.
Diversification
According to Houchens, one disadvantage of a typical ESOP company is that the retirement accounts of participants are usually almost entirely invested in sponsor company stock. This lack of diversification can be a significant risk.
Houchens Industries is a well-diversified organization with investments in several companies in the retail, industrial, consumer products, insurance and construction industries.
Its largest cumulative investment in any industry is less than 30 percent of the overall value of Houchens Industries. This diversification helps offset exposure in any single industry and helps protect the retirement benefits against wide swings in particular sectors of the economy.
Employer contributions
Every year, eligible participants receive a stock contribution related to the release of shares and reallocation of forfeitures in accordance with the plan document. These annual contributions are made entirely by the company and never involve employee contributions.
Since the inception of the ESOP on Nov. 12, 1988, employees have been paid cumulative benefits totaling more than $2 billion.
Communities part of Houchens’ story
Houchens works to partner with nonprofits in all of its communities. The company knows the impact they have, which is why it works to partner with multiple organizations.
Ervin G. Houchens
First Store
From page 20
With involvement from employees and customers, the company strives to reach new goals every year to help meet the needs of its charitable partners.
Houchens Food Group
Houchens Food Group is a diversified company that operates in the retail, grocery and convenience store industries. Headquartered in Bowling Green, Kentucky, HFG has more than 400 stores across 15 states, including Kentucky, Tennessee, Indiana, Ohio and Georgia, among others.
As a 100-percent-employee-owned company, HFG believes that its success is tied to the well-being of employees and the satisfaction of customers. The company is dedicated to providing high-quality products, exceptional customer service and a positive work environment for its employees.
‘Settling
for second best will never be enough’
Chris Timko, VP of grocery – West/Midwest for Hometown Food Company, said he has had “the pleasure” of working with the team at Houchens Food Group for about six years.
Hometown Food Co. holds some of America’s most wellknown baking brands.
“Houchens is the largest equity group for AWG for Hometown. Working collaboratively, we have doubled our business in just under six years. We work closely, collaboratively to find new ways to drive sales. The Houchens’ team is led by Jonathan Brown and driven to succeed for the retailers they serve.”
Chris Timko
Timko said HFG deserves The Shelby Report’s Exceptional Independent Retail Organization honor “because of their strength to drive sustainable growth in an incredibly challenging retail environment. The flexibility and openness to lean in and support key CPG partners while pulling the absolute best from those partners is at the core of their success. Settling for second best will never be enough.”
Exceptional Independent Retail Organization of the Year
‘Strategic from the home office down to the store’
Ben Brownfield, merchandising support manager for Houchens Food Group, has been with the company for 20 years. He started his career at age 16 as a stocker at a store in Glasgow, Kentucky, rising through the ranks to become assistant store manager, store manager and produce specialist for a couple of HFG’s divisions.
“Now I work at the home office as the merchandising support manager. I’ve had one career with one company,” he said.
Brownfield joined the ESOP as soon as he was eligible.
“There is no company like Houchens Food Group or Houchens Industries in general. Each year, they have money that goes into my account. To be able to be a part of something like that, and to know that Houchens is out there, they’re acquiring other companies, being strategic about how they operate day in and day out, so that I as an owner of a small piece of the company, can reap that benefit – it’s just amazing.”
Brownfield said he works every day to support the store teams.
“What can I do to help contribute, to make their jobs more successful day in and day out? Being an owner within the company, it makes me appreciate when I look at different programs that we can introduce.
“We’re strategic from the home office down to the store. We’re strategic because it’s our money, too.”
Brownfield appreciates the fact that Houchens Industries, of which HFG is a subsidiary, continues to seek opportunities to acquire other businesses.
“We’re looking to constantly diversify ourselves, so that we’re not solely looking at the food group side of it.”
HFG’s Store Manager Appreciation Awards program is another way the company is showing support to its operators.
“We are trying to look at, how can we better our operators? How can we set ourselves apart out in our operations, among our competition? By putting the focus and the emphasis on the Store Manager Appreciation Awards and showing our store managers how much we truly value them and what they do, they’re going to go out and they’re going to make their operations better which, in turn, makes the customer’s experience better.”
ESOP creates ‘sense of security’
“It adds a better attitude to work, knowing that you’re a part owner in such an amazing organization. There’s like a symbiosis between employee and company that just encourages them to put 100 percent forward. I feel great about the future, because we have everything from grocery stores to insurance companies.
“For me, it creates a sense of security, and my family knows that also. It definitely boosts the morale and the attitude to work. This is something we own.
“As far as leadership, I think they’ve been very responsible with everything. I’ve seen consistent growth, and I have faith in them. I feel very good about the future. If I could sum everything up in one word, I feel secure, and that’s the way it’s been from beginning.”
– Rashaud Blake, Scotty’s Contracting & Stone
‘Just really solid people that care’
As the retail technologies arm of Hussman, Aperion focuses on electronic shelf labels and digital pricing, as well as video screens and more. It is in the business of helping retailers digitize their shelf edge to drive out labor costs and increase sales and associate performance in-store, making their job easier.
Brian Salzman, national accounts manager West with Aperion, has worked with Houchens Food Group for more than two years.
“We've deployed about 65 locations across multiple banners with electronic shelf labels. It's been a great relationship.
“They've been a really good partner. They've got over 300 [grocery] locations across their different formats. We work pretty closely with their leadership team and Greg Rush on strategy, how we deploy and how we continue to make the solution better. Not only are we helping save them labor and bringing value to them, we're using them as a testing ground for deploying new solutions and new use cases. It's a really complementary relationship that we’ve built.”
Salzman said HFG is deserving of The Shelby Report’s Exceptional Independent Retail Organization honor because “they are an exceptional group. Everybody in this organization, from the top down, are just really solid people that care about their business, care about their customers and they care about their vendors.”
“I think that's what makes them unique, the fact that they go above and beyond. They continue to face challenges with competition, and they continue to figure out how they are able to serve their customers in the market the best they can for a win-win, not only for their own business.
“With it being an ESOP, I think they have a unique culture that takes that from the top all the way down of they're all in this together. They seem to be an organization that is all rowing in the same direction. You always don't have that kind of top-down alignment. They're an organization that has a true north, and they're all pointing toward that for their organizational goals. I think that's something that makes them unique.
“In grocery retail today, there's so much tide going against an independent. When I first came to learn of Houchens Food Group, I was just shaking my head, going, how have I been in grocery for 25 years and I have no idea who these people are? Because they're not all under one banner. They are in the smallest towns across the Southeast. They're the family grocer, the neighborhood grocer. I think that makes them even more unique, because they do things so differently in every market. They are going up against the Walmarts in those small towns.
“I think that what makes Houchens unique is that they are truly independent. They act and work as a community grocery store, which you don't really see organizations the size of Houchens Food Group doing.”
Brian Salzman
Ben Brownfield
Exceptional Independent Retail Organization of the Year
‘Takes employee-owned to whole new level’
FMS Solutions provides accounting services to businesses in a variety of industries, including grocery. Doug Haworth, general manager of FMS Solutions, said the company has been working with Houchens Food Group for more than eight years, providing software that helps with ordering and controlling costs.
“Our relationship with Houchens is important to our company because of the professional manner that all of Houchens’ teammates treat their customers, vendors and teammates. Interactions with the Houchens team are professional and productive. We have received several great ideas from the Houchens team that have helped us make our services better.”
Haworth said HFG deserves The Shelby Report’s Exceptional Independent Retail Organization honor for several reasons.
“Houchens treats everyone with respect and makes sure they feel valued. Houchens sets high expectations for the level of service, merchandising and standards in their stores, and they empower their team to be able to hit and exceed these standards.
“Houchens invests in training and development of their teams. Houchens takes employee-owned to a whole new level. When you meet a Houchens employee, they are proud to tell you they work for Houchens. This feeling is organic; it grows naturally within the team because of the way the teammates feel valued.”
‘It’s been life-changing for many’
“I’ve spent most of my entire professional career with Houchens Industries as a participant of the ESOP, and that is going to afford me the opportunity to retire someday with some financial peace.
“It’s something that’s working in the background for you. I used to hear that all the time – it’ll be here before you know it, and now it feels like I’m staring it in the face. Retirement is just right around the corner for me.
“I’m not aware of any other company that’s in the construction business that has the retirement opportunity that Stewart Richey has because of Houchens’ ESOP. Some of our employees who may have never had an opportunity to think about retirement have had the opportunity to retire with some financial peace ... it’s been life-changing for many.”
– Roddy Grimes, president, Stewart Richey
‘Refreshing’ interaction with vendors
Bunzl supplies the products that grocers use to run their business, such as plastic bags at checkout, deli containers, trays and wraps for the meat department.
Chris Vandenbrook, director of sales for Bunzl’s mid-central market, said Houchens Food Group is “a significant customer of ours.”
“They’re kind of old school in the way they do business. It’s refreshing, the way they interact with their vendors. I like doing business with them because of the way they treat their vendors. They have a lot of integrity.”
Vandenbrook said Houchens Food Group deserves The Shelby Report’s Exceptional Retail Organization honor because of “the way they run their business.”
“They’re very good businesspeople. They’re very savvy. They’re just good, solid businesspeople. They don’t do a lot of the gimmicky stuff. They’re just solid retailers.
Chris Vandenbrook
“I shop in one of their stores locally. I think they’re competitively priced with some of the bigger retailers out there. You still get the competitiveness, and then you get the small-town feel.”
For the Western Kentucky HFG Division, Nathan Everly of store No. 520 in Madisonville, Kentucky, was named Store Manager of the Year.
The Store Manager of the Year Award for the Kentucky/Tennessee Food Giant North Division went to Chris Fortune of store No. 544 in Parsons, Tennessee.
At the North Division event in June, Duane Mann of IGA in Loogootee, Indiana, was named Store Manager of the Year for the West Region.
Doug Haworth
Exceptional Independent Retail Organization of the Year
‘HFG allows our teams to be flexible and closer to our communities’
Craig Knies, chief marketing officer, has been with Houchens Food Group for 16 years.
He said the company provides a “great environment where the management teams are given the opportunity to run their business and make decisions for the employees and customers at the local level. This is unique compared to many other competitors and gives us a competitive advantage as we can stay flexible and closer to the communities we serve.”
This strategy by HFG gives the management teams the autonomy to run their business and take ownership, according to Knies.
All HFG employees are part of the ESOP plan within Houchens Industries.
“We’re all fellow ESOP owners,” Knies said. “We have a shared ownership responsibility to each other to do our best and attain our needed results. I believe that makes a difference to an employee, so I’m a big believer in an ESOP.
“I believe giving an employee an opportunity to be more than an employee through shared ownership is always a great idea. It helps employee engagement and helps the employee be more part of the team because they are a shared owner.
“The ESOP is a key tool in recruiting employees, but it’s important we help each employee understand what that means and how they can make a difference.”
He added that more important than recruiting is what an ESOP can do to help retention. “It takes time to understand the culture and what shared ownership can mean, but after several years and ESOP contributions, it makes a difference and absolutely helps retention.”
HFG’s Store Manager Appreciation Awards program is also a great tool for retention. Knies said the store manager has “the most important job in our company.”
“Unfortunately, in many cases, that group of individuals doesn’t always get the recognition they deserve for all they do to make us successful,” he said. “The awards are a small but important time for everyone to get together as a group and recognize their accomplishments and offer a sincere thank you for all they do.”
He said HFG offers several other recognition programs, but the SMAA’s are an opportunity to bring the store management teams together and recognize them with their peers and company leadership present. The award programs are attended by a cross-section of support staff within different departments from the corporate office.
“Many of those individuals don’t often get the opportunity to meet or understand the local teams and what a day or week in the life of a store manager can look like,” Knies said. “I think it also helps the support team see and appreciate what our store managers are being asked to do on a daily basis, so when requests are made from a store, it’s made for a reason that ultimately can help our employee, customers or store.”
Knies added that everyone throughout the organization has been supportive of the SMAA program and the commitment given by the company to allow everyone to spend time together.
HFG has been named The Shelby Report’s Exceptional Independent Retail Organization, an honor which Knies believes is well deserved.
“Being a 16-year veteran of the company, I’m probably biased, but this is a great company and has some of the most outstanding team members in the industry that leads to a great culture. I wonder how Houchens Food Group cannot be the company that’s the most deserving of this award?
“Houchen’s Food Group has several different banners and formats as a result of acquisitions and our ongoing commitment to be part of each local community, so in many cases, we are an unknown in the industry, but I think that’s part of what makes us special.”
Craig Knies
Exceptional Independent Retail Organization of the Year
Houchens IGA member stores tell ‘best story to shoppers possible’
Houchens Food Group has been recognized as The Shelby Report’s Exceptional Independent Retail Organization. Of the grocery stores in HFG, all outside of the Save A Lot branded locations are members of the Independent Grocers Alliance.
IGA President and CEO John Ross shared his thoughts on HFG receiving the EIRO award and the company’s new Store Manager Appreciation Awards program. The overall winner of the HFG Store Manager of the Year award will be nominated for the IGA Retailer of the Year honor.
“They’ve asked IGA leadership to go visit those stores and to evaluate them the way we would any independent retailer, IGA or not … We’re glad to support them in helping to pick their retail manager of the year,” Ross said.
He noted that Houchens Food Group has been a member of IGA for many years. In fact, it is IGA’s largest banner in the United States. “We consider them a premier member.”
Ross added that not every IGA retailer uses every service that it offers, but Houchens utilizes more than most.
“They’re involved with us in store design. They’re involved with us in visual merchandising. They run our marketing programs there. They support our digital offers,” he said. “When you go into an IGA store under the Houchens banner, you would consider them to be a great representative of IGA services as applied to retailers, and they do very well with them.
“Houchens shares data with us. We share our data back with them. We’re always using data to help move the client along, to help them do better and sell more. We use our industry norms plus their data in order to help them make really smart decisions on what they want to run, and then they also are sharing their data back with us.
“It’s what allows us to look at what a best-in-class retailer does. [HFG has] got
some absolute best-in-class stores. We consider them a great member of the IGA family, and we’re really proud to have them.”
IGA has been working with Houchens as it is updating some of its stores.
“We have a visual merchandising program that was put together based on a strategy of helping independents get credit for what they already do but don’t tell a lot of people,” Ross said. “We don’t tell a lot of people why having a real butcher matters. We don’t tell a lot of people about how we buy from local farms. We tend to bury the lead.”
He said HFG looked at IGA’s program and decided that is the story it wants to tell.
“When you go in their store, you see a Houchens IGA store, which tells the best story to shoppers possible. We buy from local family farmers. Your money stays in the community. A real butcher matters in the quality of the product that you eat. Our produce is picked fresh, not shipped thousands of miles.”
Ross said HFG stores are an example he shares with other retailers who want to know what a great independent looks like.
He noted that while some Houchens stores use IGA in their name, others do not.
“In the IGA stores, it’s going to be all IGA branded. But if they’ve got other banners in other markets or they’ve got stores in competitive markets and they want to use a different name, it’s the strategy that matters, not the brand.
“They’ve been very, very smart, working at the strategic level.”
Ross also noted that HFG is trying to grow its digital capabilities.
“They’ve got a very smart team that’s open to learning from others and then customizing to their needs. The biggest mistake you can have is presuming you do everything great,” he said. “The smartest retailers are the ones that are good listeners. They’re really paying attention to what’s going around them.
“If they’re advancing a digital program, they’ll seek us out. They want to know who’s doing great with the program. They’ll evaluate our vendors, and then they’ll
John Ross
end up customizing and making them their own. And that’s exactly the right approach that you want.”
While all grocery store employees are important to the overall success of the business, Ross said none is more important than the store manager.
“The store manager is so critical because the store manager is the personality of the brand. They set the culture for their store while your corporate office sets policies and structure,” he said.
“A great store manager is somebody with just very concrete criteria. A great store manager is somebody who sees their role of making their associates successful … a great leader is the one that’s removing barriers, giving people the tools that they need to succeed and letting them do the job. If you’re telling everybody what to do, you’re doing all the work. If you’re empowering your people underneath you to do great things, then suddenly, now you’re growing team members in the leadership.
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‘You’re actually working on your future’
“Being an owner of a company is different than being a hired hand, because you are a part of it, and you’re actually working on your future. The great thing about an ESOP is, as the company succeeded, then certainly you would succeed.
“The initial intent of the ESOP was to have a secure retirement. The stock ownership plan put me in a position to where I could have a worry-free retirement. No matter what else happens, I have the employee ownership, the stock that they cash out when you retire for the future.
“For many, many people who lived in the small rural towns in Kentucky and Tennessee at that time, it was just a grocery company. They had never seen anything like what came out of their retirement program. Just a real blessing and changed the lives of many people.
“I think Mr. Ervin Houchens would be just overwhelmed. He would really be proud of what the employees have done with the idea that he had.”
– Mike Givens, HFG board member
HFG has ‘unique consumer-centric approach’
Steve Nowlin, head of alliance – AWG for The Kraft Heinz Company, has worked with Houchens Food Group for a little over two years.
He said the company is an “amazing partner,” and he is very proud of the work they have accomplished together.
“It truly has been a pleasure to partner with Houchens in our shared commitment to deliver high-quality, great-tasting and nutritious foods for all eating occasions.
“Houchens Food Group is a key partner for Kraft Heinz, playing a significant role in distributing and promoting our products in the regional market. Their strong presence in these markets allows Kraft Heinz to maintain and expand our reach in areas where large national chains might not be as prominent.
“In addition, their willingness to test big concepts and out-of-the-box marketing strategies has made Houchens a leader in the CPG industry. Kraft Heinz and Houchens Food Group are committed to delivering high-quality food products while focusing on sustainability and supporting local communities. This alignment strengthens our partnership and contributes to long-term success in the market.
“With its unique consumer-centric approach, Houchens Food Group operates with a consumer mindset and goes above and beyond to ensure its consumers’ needs are prioritized first. This unwavering commitment is truly a testament to its leadership and commitment to marketplace excellence. It reassures us that our partnership with Houchens is not just about business but about serving our consumers better.”
Steve Nowlin
“This is one of the key characteristics of leadership, and it’s why Houchens is so smart – because they’re focused on making sure that the greatness in those leadership roles is exposed.”
Exceptional Independent Retail Organization of the Year
Metrics help evaluate store performance and identify people who perform well.
“You also want to look at why they perform the way they do. This sounds so subtle, but it’s a profound difference in thinking about how you manage a chain,” Ross said. “Why is that store working? What is it that’s happening inside of that store?”
As an example, Ross described a store that is bright, crisp and well merchandised, where the associates are smiling and engaging with shoppers. “When you go to that store … chances are you’re going to find a store manager who understands the difference between management and leadership,” he said.
“This, to me, is the genius of what Houchens is doing right now. Not only have they identified managers who are performing, but then they’re doing the second layer of assessment, which they asked IGA leadership team to do – to come in, IGA or not, and just identify greatness in our store managers. And it is really fun to see what a strong team they have.”
IGA has 6,600 stores across the world, with 2,100-plus stores in the United States.
When considering those that rise to the top, Ross said it is important to look at the leadership at the corporate level and clarity around the mission.
“What is our mission? Is our mission to make more money? That’s a goal. The mission is to serve our community. You serve the community right, we’re going to make more money.”
He said metrics are important, along with financial discipline around how to deploy capital.
“One level above that – and the most critical level, in my opinion – is setting a vision for how we want to treat both our associates and how we want to treat our shoppers.”
Houchens Industries, parent company of Houchens Food Group, is an ESOP, which Ross said creates ownership for the employees.
“The associate who’s taking your groceries out – not expecting a tip – is doing it because he’s trying to make you love his store. And the produce manager … they’re working with local farms to find the very best local produce at a great price. They’re taking that extra step in order to ensure that it’s fresher than Walmart.
“And it’s why the person in the center store is making sure that not only are they in stock, but the store is priced accordingly, so that no one misses out on a deal. And all of these things … that took leadership at the top. And then you have to hire people into that same culture, which means you need to maintain that standard.
“You have to keep your mission crisp, which is, ‘We exist to serve these shoppers.’ You serve them, we’ll all do great. You can tell it when you go in their stores. It’s obvious.”
‘Company’s going to be good to you’
“I was a bag boy, produce manager, produce supervisor that became a director of data processing. If you just get in there and work hard, the company’s going to be good to you.
“I tell the story about how my dad told my middle brother that [I] can’t make money working at Houchens. And so when I got my retirement check the other day – excuse me if I get a little emotional – I opened [it] and I showed my dad. I said, ‘What do you think about that, Pops?’
“It’s made a wonderful life where my wife can retire early … when we first got married in 1988, we lived in a 10-by-50 trailer. You can just count on the ESOP every year to be growing or looking better and just worth more … Houchens was a godsend.”
– Terry Cornell, retired HFG director of data processing
Exceptional Independent Retail Organization of the Year
AWG appreciates strategic partnership with Houchens Food Group
Houchens Food Group has been named The Shelby Report’s Exceptional Independent Retail Organization. HFG is a member of Associated Wholesale Grocers, and AWG President and CEO Dan Funk shared his thoughts on their relationship.
“Houchens Food Group and AWG are very close strategic partners in servicing the stores with all the goods, products and services AWG can provide to help the stores be successful,” Funk said.
“As member-owners of the cooperative, the Houchens Food Group team works collaboratively with us from our executive leadership team down through our divisional support teams.
“Our teams have partnerships with our divisional support centers across three distribution centers which the stores are served from today.
“[Houchens President and COO Jimmy Nichols is a member of the AWG Board of Directors, and he also shares his time and talent with AWG, helping to guide the strategic direction of the company in this role.
“Together, our teams have a close working relationship to continuously improve our combined businesses while building our strategic partnership for the future growth of our mutual businesses.
“Our partnership with the senior leadership team at Houchens has been critical to the ongoing strategic support we can provide to each other as partners and supporting the company as member-owners of AWG.”
HFG introduced its Store Manager Appreciation Awards this year, recognizing grocery store managers throughout its divisions and selecting a Store Manager of the Year from each of 18 groups. An overall HFG Store Manager of the Year will be announced at a company-wide celebration in January.
Funk described store managers as the “backbone of each store and community” they serve.
“Each store manager dedicates time to leading their teams, providing the best quality products available and a vital connection to the community to serve neighbors by participating in many civic events,” he said. “Balancing all the priorities to make the stores come alive each day and provide the benefits needed as a thriving business is a tough job. The store manager role is vital to independent retailers’ success in the communities they serve.
“Store managers put in endless hours in planning, leading and care of their business each week. Stores can be a 24-hour-a-day, seven-day-a-week commitment from staffing, to preparing the store for business, to after-hours needs if there are facility or equipment challenges in the store. The hours and dedication they put in outside of the traditional store hours really separates store managers in their roles. That commitment warrants special recognition to this critical role in stores today.”
Funk acknowledged the importance of recognizing store managers in an effort to retain talent in a post-COVID world.
“Recognition to the team that is making it happen each day is a critical component to helping raise the bar with the store manager team,” he said. “The grocery industry was stressed and challenged through the events of the pandemic. Recognizing the leaders who make it happen at the store each day is an important part of the ongoing recognition. The commitment to the ongoing teaching, training and development aids store managers’ future success.”
On HFG being honored with The Shelby Report’s EIRO award, Funk said the recognition is well deserved.
‘Hard to overemphasize’ importance of HFG ESOP
David C. Burnett, retired VP of Houchens Industries Inc. and director of Save A Lot operations, has served on the Houchens Industries Board of Directors since January 2004.
Burnett, who sold 28 stores to Houchens in 1994, signed an employment contract to work with the company for three years.
“I really did not know what to expect working for a larger corporation during those three years. To my surprise, I stayed there for 24 years.”
He described working in a 100-percent employee-owned company as “an amazing journey.”
“It was rewarding for me personally, and I am certain it is for all Houchens employee-owners, to be a part of the growth and success of the company.”
In a very competitive industry, Houchens Food Group manages to stand out from its competitors.
Burnett said HFG is large enough to have purchasing power to deliver value to its customer base in all its markets and still deliver a great overall customer experience because it has employee-owners in all stores.
“It is hard to overemphasize the importance of the HFG ESOP in attracting and retaining talent. I hear about the impact the ESOP has from our employee-owners and from people who are outside of the company as well. The current management team is doing a great job at cultivating an employee-ownership culture that continues to grow.”
HFG recently began its Store Manager Appreciation Awards program, which honors store managers throughout the company. One store manager from each of 18 groups is selected as the Store Manager of the Year.
A company-wide Store Manager of the Year will be selected at a celebration set for January in Bowling Green, Kentucky.
Burnett said HFG believes the store manager is the most important role in the company.
“As the leader of a business unit, the store manager leads and interacts with the entire store team, as well as often being the face of the business to customers. As the person who has total responsibility for the safety of all employees, service to our customers and financial results, who could be more important?”
He noted that the SMAAs are one way to show appreciation and respect to these leaders.
“We all depend on them, every day.”
Burnett said he believes HFG’s honor as The Shelby Report’s Exceptional Independent Retail Organization is well deserved, “due to the efforts of thousands of employee-owners across multiple locations in multiple states.
“I believe there is a culture of serving others exhibited by the Food Group leadership that flows throughout the team. This ranges from simple acts of kindness to individuals, to St. Jude Children’s Research Hospital. I believe Mr. Ervin Houchens, the company’s founder, would be proud to see the Food Group’s continued commitment to our local community by giving back to many worthwhile civic organizations and charities.”
Dan Funk
David C. Burnett
“The Houchens Food Group team continues to grow and thrive across its geographic territory. They continue to innovate with new store formats, services and solutions for consumers in their trade areas. The team also continues to support the communities they serve, which is critical to their success,” he said.
“Also, as an ESOP company, they have built their success on investing in their teammates for the future by being owners of the company for their aligned and joint success. These areas combine into an extremely successful company deserving of this recognition.”
‘They’re first class in every way’
DCR is a Nashville, Tennessee-based POS and technology service provider that has been serving the Southeast since 1961. The company provides solutions to the independent grocery market, including Houchens Food Group, and the restaurant market.
“We are very honored to be a partner of Houchens Food Group. They’re an outstanding partner,” said DCR President Blake Gillum. “We’ve been partners in providing them with POS and technology solutions for over 40 years. When they went from mechanical to electronic cash registers, they were one of the first ones that we ever put in.
“They always have demonstrated such a strong commitment to their vendors, their employees, their customers and their community. That’s always been so impressive. They also have a vision for the future and a passion for being a leader in our industry. They have a lot of integrity. We need good partners like them so that we can be successful.
“What makes Houchens so different than some other retailers is the involvement they have in our industry as a whole. They participate and sit on many boards with regional trade associations, and they fight for positive legislation in different states that influences the independent grocery market and is advantageous for retailers. They don’t just fight for themselves, but they’re also out there promoting the health and well-being of the independent grocery industry as a whole.”
Gillum said Houchens Food Group deserves the honor of being named The Shelby Report’s Exceptional Independent Retail Organization “because they have an unwavering commitment to their community, customers and their employees.”
“They’re 100-percent employee owned. They care deeply for their employees’ well-being, and I think that’s been a huge part of their success. They’re also so passionate about customer satisfaction – providing a quality product, creating a great experience for their customers, but also creating a great experience and promoting the communities that they serve. They’re always looking at ways to give back to the community at large, very similar to what they do for our retailer community, also.
“It’s an honor to be partnered with Houchens Food Group. They’re first-class in every way you can be first class. We have been partners a very long time, and we’ve grown together. They were a tremendous part of our success as well.”
Blake Gillum
Exceptional Independent Retail Organization of the Year
No matter the role, ‘everybody can have an impact’
Sean Schulke, VP of HFG North Division, has worked for Houchens Food Group for 10 years.
The Food Giant North Division covers the Mid-South: Arkansas, Missouri, northern Mississippi, northern Alabama, Kentucky and Tennessee. He is responsible for overseeing 93 stores.
Schulke said being employee-owned sets HFG apart from many of its competitors. “Houchens Food Group has been successful in the markets they operate due to our individual employee-owners. Our associates certainly make the difference.
“Our grocery stores are the neighborhood stores which serve the families within these respective communities. Our employee-owners live within these communities. Our employee-owners go to the same churches as our customers, their kids go to the same schools, they play on the same soccer teams. Ultimately, our employee-owners are part of the communities we serve.”
He said HFG associates strive to support and serve their customers. The company also empowers its employee-owners to “make the right decisions that best meet the needs of their customers.”
The ESOP is helpful in recruiting and retaining employees, according to Schulke. However, he said it is important to teach new employees what the ESOP is, how they can personally impact the company ESOP and how it will benefit them as they continue in their careers at Houchens.
“All employee-owners are looked at equally, and each employee-owner can have a direct impact on our performance by what they do within the store. No matter what position, what role they play in the store, everybody can have an impact,” he said.
As a former store manager, Schulke said he has “lived and learned firsthand how important that store manager role is within a company. They lead, they manage, they influence
how each associate serves the customers in their respective store, as ultimately our store manager understands that each of his or her associates is a direct reflection of him or her. So it’s important that store managers set the bar and lead by example.”
He said the Store Manager Appreciation Awards program is a critical component of the HFG culture and its appreciation programs. “Our store managers are really humble people. They don’t look for credit. They work because they know it’s the right thing to do, but they certainly appreciate the acknowledgement that they’re all receiving.”
Schulke said the supervisory team that takes part in the SMAA program thinks it’s great, as many of them are former store managers.
“That’s how they grew up, and they understand how important that position is … everyone’s important within our company, but ultimately our stores are the biggest part of our company, and our store managers are leading the charge.”
Schulke also noted that HFG’s store managers are “a competitive bunch.”
“They’re proud of the folks that have won, but they’re also talking about what they need to do, or what they’re going to be working on to make sure that they get acknowledged next year, which is great. That’s what we want. We want that kind of continuous improvement.”
HFG has been selected as The Shelby Report’s Exceptional Independent Retail Organization, which Schulke attributed in part to the company’s store managers and their teams.
“Our folks are just so much part of the community, and they do all these things kind of under the radar … again, they’re not looking for credit, they’re not looking for support.
“We compete against some of the best and largest retailers in the world that have bigger infrastructure. They have things that we don’t have, necessarily, but that just makes our folks work a little bit harder. We have folks that are working hard because it’s the right thing to do for their respective communities.”
Sean Schulke