Housed on a site where Bibles and dime-store novels were once printed, Food City’s newest flagship is a best-seller encyclopedic emporium of fresh produce, meats, discount groceries and environmental efficiency.
By Richard Turcsik
Kroger and Walmart Supercenter can tout their sprawling mega stores, 24-hour convenience and “everyday low prices,” but to the residents of the Tri Cities of Bristol, Va. and Johnson City and Kingsport, Tenn., that doesn’t amount to a hill of half runner beans.
Just ask the shoppers picking through a massive four-foot-by-four-foot crate of the local delicacy outside Food City’s newest flagship on the site of the old Kingsport Press complex in downtown Kingsport. “These are the best beans!” exclaims one female shopper. “You have to cook them for about two hours and put some salt pork in it.”
“You know what my wife uses for seasoning? She wants to avoid the trouble so she uses beef bouillon and you can hardly tell the difference,” interjects one male senior citizen. Then, casting a nasty scowl at the ancient brick building across the parking lot, once part of the Kingsport Press complex and now housing the Kingsport Farmers’ Market, he says, “I have to tell you about that farmers’ market over there. I went over there a couple, three weeks, back and I’ve never seen such scrappy produce in my life. And the same beans that you are selling for $1.29 [a pound], they were $1.50 [a pound] over there.”
Food City officials attribute the quality difference to the fact that it sources its beans from Scott Farms in Unicoi County. “You know Mr. Scott is probably the best bean grower I’ve ever seen,” Steven C. Smith, president and CEO of K-VA-T Food Stores, the Abingdon, Va.-based operator of the Food City chain, tells the customer. “His corn is equally as good,” he says before telling an out-of-town visitor what makes half runner beans so special.
“You won’t find these in a lot of places in the country,” he says, “but folks in this neck of the woods, we won’t hardly eat a pole bean or snap bean. We like our half runners because they are tender and they are just full. Inside it has a nice little white bean and when you cook that up it is absolutely just out of this world.”
In a little more than hour, the two-foot high mound of half runners is dang near picked clean.
“This is the No. 1 store in produce sales in the company,” Smith says. Given K-VA-T’s preponderance of working with local farmers it is easy to see why. The produce department walls are lined with pictures of some of the farmers that K-VA-T does business with, along with detailed explanations of what crops they grow and on how many acres. Each January the chain throws a big awards dinner for its farmers as a way of saying “thanks.”
K-VA-T prides itself on the freshness and quality of its local produce. “We will leave a [refrigerated] truck in their field and when they harvest the produce they put it in there,” Smith says. “We pick it up the next day and leave another truck, bring it back to our warehouse, where our produce folks inspect it and ship it back out to the stores that day.”
Of course not every produce item can be grown locally. However, even with a commodity such as bananas, K-VA-T has found a way to set itself apart. Food City only sells Harvest Club bananas, a brand of Topco Associates, its private label supplier. “With Harvest Club we can switch from Dole to Chiquita to Del Monte and our customers will see the continuity of brand,” Smith says.
By walking five feet down the display and purchasing Harvest Club bananas in a bag they save an additional 10 cents per pound. “That is our ‘price’ item,” Smith says. “We are going to match everybody and anybody with the lowest-priced banana in town. We are 49-cents per pound and sell about 30% of our bananas at that price, while our loose bananas are 59-cents. It is the same banana and the same quality, just in the bag. The banana is one of those items that you are not going to let them undersell you on.”
Through its Low Price Lockdown campaign, Food City is not letting competitors undersell it on mainstay grocery items either. Initiated in the Knoxville market and recently expanded into Tri Cities, the Low Price Lockdown freezes prices on items for 90 days. “This is really an effort to let folks know that we are working hard as their purchasing agent,” Smith says, pointing to one of the thousands of padlock Low Price Lockdown banners, streamers and shelf tags covering the store.
“The Low Price Lockdown enhanced our price image and it has enabled us to bring a program to manufacturers enticing them to bring us their best deal. They like what they are getting out of it,” Smith says.
Fuel bucks fuel loyalty
Food city officials say customers absolutely love another loyalty program—Fuel Bucks Rewards. It allows them to save 15-cents per gallon on gas, up to 20 gallons, at the K-VA-T-owned Gas ‘N Go station out in the parking lot every time they cumulatively spend $150 on groceries. “It is very, very popular,” Smith says. “When we put the Fuel Bucks program in about a year ago we not only saw a nice lift in-store, but we also saw a really nice lift at the pumps. It’s an expensive program, but I look at it like an ad markdown,” he says, adding that about half of the gas pumped is a result of Fuel Bucks Rewards.
Once shoppers gas up their car and head into the store they are greeted with an extensive deli that features hot and cold entrees for breakfast, lunch and dinner. Throughout the day the Café Kingsport seating area is packed with an eclectic mix of diners—senior citizens, young moms with toddlers, downtown business professionals, factory workers and hardhat construction workers from the medical office building rising at the far end of the parking lot.
The deli department includes a Rosario’s made-to-order pizza counter, along with an extensive selection of luncheon meats and even more enticing mix of salads, including Watergate, Dreamsickle, Bacon Ranch Pasta, Carbonara, rotisserie chicken, old-fashioned chicken, chicken Caesar, Cowboy Caviar (corn, peas and beans), cole slaw, mushroom and pepper, grape, deviled egg potato and broccoli salad. “The broccoli salad is probably our No. 1 salad item,” Smith says. “A lot of the salads are homemade, including the Rotisserie Chicken Salad. We take the rotisserie chickens that do not sell and make it into a chicken salad that is hard to beat. The recipe came from one of our associates who has since retired, but it is Louis’ recipe and he shared it with us.”
Deli leads into bakery, produce and finally floral. “This is a good department for us because in a lot of our smaller towns there are not any full-service florists anymore,” Smith says. “We do weddings and a lot of bereavements. They are tough to advertise, but once people get that trust they will use you again.”
Private name brands
Across from the bakery and deli is the commercial bread aisle, where Kern’s bread is a popular favorite. “The Kern’s brand is an old one that had been around for over 100 years, but Sara Lee bought it and killed it off because they didn’t want a regional brand—so we bought it from them,” Smith says, explaining that Sara Lee sold the name to K-VA-T with the stipulation that it produce the bread under the Kern’s name for three years. “The three years is up, so we own it now and bid it out,” Smith says. “It is the No. 1 white sandwich bread in the store, selling more than our Food City brand and Flowers. We’ve been really blessed getting a brand price at private label cost, so that bread has a 50% margin, versus 25% for Flowers.”
It is a formula that K-VA-T uses throughout the store. In ice cream, K-VA-T-owned Kay’s, once a regional brand out of Knoxville, is the No.1 novelty and the No. 2 carton ice cream after Mayfield. In salty snacks K-VA-T now owns the Terry’s and Moore’s brands, in addition to Topco’s Food Club private label. “Wise Snack Foods owned Moore’s and again, it was one of those regional items that they wanted to kill off,” Smith says. “We said, ‘Don’t do it!’ We’re now selling Moore’s (still locally produced by Wise) to Walmart, Food Lion, Bi-Lo and Ingles.”
Behind the doors in the packaged meat section, along the back wall after produce, the formula is repeated yet again, this time with the Lay’s brand. Lay’s bacon is Food City’s No. 1 bacon and the Lay’s Touchdown frank is the No. 2 frank behind Oscar Mayer, Smith says.
The packaged meat doors lead into an alcove that houses the service seafood and service meat cases. “Seafood is something we are proud of,” Smith says. “Our guys do seafood, we think, as well as any retailer in the country. You wouldn’t think we sell that much seafood here, but it is amazing how much seafood and service meat we sell.”
The meat department specializes in Certified Angus Beef, with tenderloins, kabobs and steaks the best sellers, along with the signature Black and Bleu Burger, a hamburger patty containing bleu cheese and black pepper seasoning mix. Also on the hot list are the store’s extensive selection of marinated items, including steaks, chops, ribs and roasts.
“Burgundy Pepper is a Food City exclusive marinade and it is amazing,” says Kevin Carter, meat manager. Meats are marinated in-store. “We have a tumbler that we put the meat in. It sucks the pores on the meat open and tumbles it in marinade for 5 to 10 minutes and the marinade gets locked inside,” Carter says.
Another popular item is the Meal In Minutes program, featuring marinated roasts and other cuts plus vegetables in a large aluminum baking tray. “This here is a mother’s favorite,” Carter says. “They stop in on their way home from work and grab these. Working mothers love it because there is no cleanup. You simply take the plastic wrapping off, put it in the oven, cook it, lick the pan and toss it away.”
The Kingsport Food City contains 16 aisles of groceries, with the last aisle leading up to the Pharmacy counter up front. The Pharmacy is a new feature for Food City in this end of town and it contains a drive-through window fronting Center Street, the main drag leading into downtown.
“We’ve been a little bit slow as a company to get into the drive-thru pharmacy,” Smith says. “We probably don’t have more than a dozen of them, but we’ve come to the conclusion that if that is what the customer wants you better give it to them.”
Smith says the pharmacy business has been gradually building, even as Food City faces strong competition from the CVS and Walgreens a couple of miles away over on Stone Drive and a “feisty” independent right down the street, he says.
Adjacent to the pharmacy is a department that is an industry rarity these days—video.
“We’re kind of the last man standing in our markets and video is kind of unique to our stores,” Smith says. “Blockbuster is gone, all of the independents are gone. How long it lasts I’m not sure, but believe it or not, we still do pretty well with video. It is still profitable.”
Towering above town
Building K-VA-T’s new Kingsport, Tenn., flagship store was a task of literally biblical proportions. That’s because the 12.5-acre site, on the edge of downtown, was the long-time home of the Kingsport Press, which began business in 1922 producing miniature clothbound classics for F.W. Woolworth and eventually grew to become the No. 1 producer of Bibles in the world, along with encyclopedias and other hard bound books.
When the plant closed in 2006 its owners donated the property to the city. K-VA-T bought it from the city and redeveloped it into a supermarket and adjacent shopping center/office complex. It was not an easy task, says Steven C. Smith, K-VA-T’s president and CEO, as the buildings were full of asbestos. “We had foundations that went five feet into the ground to be able to hold the weight of the printing presses and books,” he says. “It was a big task to tear that down and have the folks to do it.”
One stipulation from the city was a brick outbuilding that had already been converted to a farmers’ market, open on Wednesdays and Saturdays, had to remain. “Ideally, if you are a grocer you think a farmers’ market is probably not the best thing to have outside your front door, but the traffic it generates is absolutely amazing,” Smith says. “There are probably several thousand people that pass through here on a Saturday.”
Smith had a stipulation of his own. He wanted to pay homage to the site’s industrial heritage and thought about the huge rusting iron water tower that stood in what is now Food City’s parking lot. “I got to talking to the mayor and some of the Kingsport Press people and asked them about what would they think if we reconstructed that water tower,” he says.
City officials liked the idea, so Food City built an aluminum replica costing about $100,000 at the entrance to the adjoining 40,000 square-foot shopping/office mall. At its base is a fountain constructed with bricks from the original plant. “To tell the truth, it creates a little bit of a draw because there are some pretty tough sign ordinances here. If you are anywhere downtown you can see this tower.”
However, lettering on the silver tower spells out “Kingsport Press” instead of “Food City.” “We would have been pushing our luck a little bit,” Smith says of the wording. “We figured this was always known as the Press property.”
In addition, commemorative brick pavers in the surrounding plaza are being sold primarily to family members of former Kingsport Press employees to finance an antique carousel that will eventually be housed inside the farmers’ market. “They are in the process of restoring an old carousel and are hand-carving the animals. It is being done all across the country. They have to raise about $250,000. It is really a unique project that has quite frankly brought the community together.”
At Food City, reducing energy costs is a new concept. “We were blessed and cursed at the same time in this region with really cheap energy via the Tennessee Valley Authority,” says Steven C. Smith, president and CEO. “For years it was a line item that we didn’t pay a lot of attention to, but the world has changed and electricity and gas are a big driver of our costs.”
That is why the chain went all out with energy conservation at its new flagship store in Kingsport, Tenn. Skylights light the store interior and all of the frozen and refrigerated grocery items are behind LED-lit doors, including hot dogs and other packaged meats; even the signature Kingsport Press water tower uses energy-efficient LED lighting.
“This is only our second store that we put skylights in,” Smith says. “We find we are saving about 40% of energy costs vs. the same footprint that we built a year and a half ago. We will never open another store without these energy-saving efforts. We have doors on beer, doors on dairy and doors on lunchmeat, where we used to have open cases. In the next store that we open we are even going to put some doors on the bagged salads in produce because bagged salads are very susceptible to temperature changes.”
The Press Room
The Kingsport Kiwanis Club has a new meeting place—The Press Room at Food City. Housed in a 40,000 square-foot mall that will contain shops, restaurants and offices, including a medical call center, the 3,355 square-foot Press Room hall abuts Food City’s deli kitchen and was built by the chain as a community room.
“We do everything from bridal showers to civic clubs to meetings because we have all of the audio/visual that you need, and we have restrooms,” says Steve Smith, president and CEO of Abingdon, Va.-based K-VA-T. “We are connected to the store through the bakery/deli, so we can do a lot of the catering work right through our own kitchen.”
The area seats up to 120 and has a liquor license. “We wanted to have alcohol in there, so we didn’t want it connected directly to the store,” Smith says, noting that Tennessee law currently prohibits the sale of wine in supermarkets. “If we make The Press Room separate it gives us the ability to have a little bit different functions because it is separate from the supermarket environment.”
According to Smith, Kingsport city leaders encouraged the store to put in the community room, even though it already has a similar feature at its store across town. “I will give the city folks a lot of credit,” Smith says. “They said you don’t realize how much is going on downtown and this room can be a big draw.”