Residents of Winchester, Tenn., were the winners of a lottery for food retailers in late June. A 54,000-square-foot Food City store opened on the outskirts of town. The shop has a bakery as well as a deli that sells high-end Dietz & Watson meats, as well as a massive food service operation featuring the Blodgett pizza grill, a smoker made of hickory, and a hot bar. A cafe that seats 38 and has a fireplace sits right next to the one and only Starbucks located in the town. The floral department is open all week with the help of a professional. The meat and seafood departments provide premium beef. They have supermarkets and produce sections with exotic, specialty, and gourmet items. There is also a large selection of wine and beer and a wine-tasting station that has seating. There are also pharmacies, a Gas n’ Go fuel store, and a drive-thru pharmacy. The location will make a statement in any marketplace; however, in a town such as Winchester, located just an hour south of Nashville and near the frontier with Alabama, with a total population of around 10,000 people, Food City is living in the spirit of the company’s founder, Jack Smith, to run the top market within the city. The company is achieving this in a significant way since the company’s 137 store locations are quite a bit more than any of the competitors within Franklin County.
Modest Beginning and Promising Future
In the year Jack Smith was discharged from the U.S. Navy and returned home to Virginia, he needed some sort of activity to fill the time. He saw a need that was not being met for the kind of food-related retail he encountered while in San Diego and bought an 8,800-square-foot Piggly Wiggly store, along with his father Curtis, his cousin Ernest, and Uncle Earl. The business grew slowly, beginning by buying additional Piggly Wiggly locations, until it was able to grow to 11 locations in 1979. In 1979, Steve Smith joined the company. The way we came to the Food City name was when we purchased quality food stores doing business under the name of Food City in 1984. Steve Smith explains. We moved from just 11 stores to 30 locations in the span of a few days. Five years later, we moved on the road to Knoxville, Tenn., and acquired the White stores. They totaled around 40 stores, which nearly doubled Food City’s size. The CEO was appointed in the year 2001, and by the year 2008, one year after the senior Smith died, Food City had opened its 100th branch. It continued to grow steadily, after which, in 2015, Food City experienced another growth increase when it purchased 29 Bi-Lo stores in Jacksonville, Fla., from Southeastern Grocers, which allowed it to expand to the northern part of Georgia. Although Food City has achieved much of its growth via purchases and mergers, when asked about the most effective method of expanding the business, Smith responds, It is contingent on. If you’re planning to enter, that is the size of Chattanooga, Tenn., and you need 10 locations. I’d prefer to acquire the company of someone. The scale is instant as well as people. People is an expression that is frequently mentioned during conversations with Smith, as the company’s employees’ ownership model as well as its value promise to operate the most efficient stores in town are based upon the quality of associates who provide excellent customer service. About 15% of the $3 billion corporation is owned by employees. This fact is what prompts Smith to offer some of his advice.
Managing the Biggest Businesses
In the same way that Steve Smith assumed leadership from his father Smith’s younger daughter Katie Penny is expected to someday become the Chief Executive Officer. This isn’t likely to happen anytime soon However, it is possible. Smith who is 64 states, I love what I do and feel great, noting that Penny is learning business the same way that I did when I first started in the industry. Penny has an MBA degree. She also worked an entire six-year period at Hyatt Hotels following her graduation and was recently part of the National Grocers Association Foundation Executive Leadership Development Program. Penny is currently in a crucial HR position in the department responsible for store operations. She would like to manage the business, and I would like to see her manage the business, Smith notes. And the most important thing is that my leadership team at senior levels wants to see her running the company and assist her. As a 31-year-old not know, Penny isn’t ready for the highest position yet, if her father should leave for any reason. But as per Smith, That’s what Greg Sparks is here to do at the moment. Food City’s Chief Operating Officer, Sparks has a wealth of experience in retail and is five years older than Smith. Before his appointment at Food City about five years back, he worked for three years serving as EVP of operations for Goodlettsville, Tenn.-based Dollar General before which he had a 34-year tenure at Pleasanton, Calif.-based Safeway in important leadership positions. Smith enjoys the importance of the fact that the Food City is small, agile, and owned by a family, which allows it to operate with speed, agility, and a unique perspective in making decisions. One of the greatest things about the company is that we’re not publically listed, Smith asserts. We always keep the long perspective. We’re able to accomplish many items that are store- and even customer-friendly. He cites, for instance, the piece-pick program, in which the business will deliver one item to a retailer if it is requested by a client. It’s inefficient operationally certainly and yet helps to build customer loyalty in the long term. Another instance of a product Food City offers that would have been eliminated in the past at the public company level is the checkout procedure known as cashier load. As the title suggests, Food City cashiers unload the shoppers’ bags before scanning their purchases. John Jones, EVP and director of operations for stores is aware that the procedure, which is currently being offered in more than 80% of Food City stores, isn’t efficient. However, when asked if he would like to eliminate the process, he said, We’ve been a little cautious since we do not want to be seen as removing a service. Instead, Food City is introducing self-checkout and plans to offer the option available in 40 locations at the end of this year. Jones, who is 41 years old and a Food City veteran, oversees an operations team for field operations, which is comprised of three divisions comprising three or four districts that comprise between 12 and 15 stores. They are served by a single 1.2 million-square-foot distribution centre located near Food City’s main office in Abingdon, Va., located in the western region of the state. As well as Jones and Sparks Smith, one of his best staffers includes Dan Glei, EVP of marketing and merchandising. Glei joined the firm in 2014 following several important merchandising, e-commerce, and format developments in Ahold USA and its Giant Food Stores division. In the past, he worked at A&P, Polaroid, Harris-Teeter, and Frito-Lay.
Fierce Challenge
Being the top at something is a broad concept; however, in the case of Food City, its current version of excellence in the world of retailing food places importance on quality, variety, and affordable prices. Our goal is to get just enough from Walmart costs that people don’t have to think, Holy cow, I’m not going to be able to pay that, Smith declares. So we’re very aware of Walmart’s as well as Kroger’s prices. It is not our intention to beat Walmart in the prices that Walmart is doing; however, we will remain close enough so that customers can say, I love this shop due to its amenities. I am awed by its products—fresh seafood, its food service section, and the most prestigious beers and wines available. Foodservice is by far the most intriguing element of Food City’s retail store located in Winchester. The vast section, which includes huge overhead menu boards that are branded Let’s Eat, is the first thing shoppers are greeted with when they arrive at the store, and they’ll pass by the Starbucks and adjacent Jack’s Cafe. Foodservice has become a major business as it’s the most dynamic part of our industry, says Jones. Over 30 of our stores offer hot bars with a selection of meals prepared by store employees, as well as 36 types of soups that are prepared entirely from scratch. Foodservice may make up 10% or more of Winchester’s sales, as per Smith. We are proud to be as focused as we can with our store-made items, Glei says. Glei. It also takes pride in having a substantial produce store that’s adjacent to the Let’s Eat food service operation. This could be responsible for around 13% of the sales, in the estimation of Smith. Through agreements with farmers from the local area, certain Food City stores receive fresh-from-the-field fruit and vegetables. The majority of items are delivered to the stores on the exact day they’re harvested. Food City buys approximately $5 million of fresh vegetables and fruits from local farmers. The perimeter is where both Smith and Glei are especially happy with the fully-serviced meat section, with premium beef as well as an 18-hour guarantee of freshness on the grinds. After 18 hours, the item is reduced in price, and if it does not sell, it is donated. It’s a fantastic fresh ground beef initiative that I’d be willing to compete against any that’s on the market, Smith says. No matter whether it’s freshly ground beef, prepared food, or different elements of Food City’s marketing strategy, the company’s latest retail model is comparable with the top brands in the business, even though it’s somewhat away from the main road to Winchester.
