Food City's on the Right Track


These days, the mountains that surround Johnson City, Tenn., aren’t the only spectacular sights in town. The small city of around 66,000, nestled amid the picturesque Appalachians, is the site of the latest Food City flagship store and adjacent fuel center.

Since its October 2015 opening, the location, which replaced an earlier store, has not only attracted shoppers from the surrounding Tri-Cities area — comprising Johnson City, Kinsgport and Bristol, home to the world-famous motor speedway — but also curious consumers from farther afield: North Carolina, southwest Virginia and eastern Kentucky.

“I was speaking to somebody every day who just wanted to see the store,” recounts Store Manager Derek Adkisson, recalling the location’s first days in business. “They wanted to see the biggest and newest concepts in the grocery industry, and we were able to provide that shopping experience for them.”

When customers enter, the first thing they encounter is Food City’s version of a wall of values, with sale items that change monthly, many of them the chain’s Topco-sourced private label brands, which include Food Club, Valu Time and Full Circle Market, the last a line of natural and organic products. At the time of Progressive Grocer’s visit, the area sported football-themed decorations in anticipation of the so-called Battle at Bristol, set to take place between the University of Tennessee (UT) and Virginia Tech on Sept. 10.

“Football’s coming up,” affirms District Manager Rick Bishop. “We do have a lot of tailgating a round here, and then we’ve also got Bristol Speedway. We’ve got two races a year that we sponsor, so those are big events for us as well.”

Comfort Zones

Next up is the store’s expansive deli/bakery, which Bishop describes as “one of the largest we have.” The bakery offers a host of store-made baked goods, including specialty dessert cakes and higher-end items like cannoli and fruit tarts, all offered for the first time by a Food City store.

Describing these as “new merchandising experiments,” Dan Glei, EVP of merchandising and marketing, notes: “We learn a lot of things about what our customers want, and it allows our customers to experiment with things they’ve perhaps not tried previously.”

In contrast to the shock of the new bakery items, the deli provides a panoply of familiar favorites that customers can order to go or enjoy in the store’s eat-in section (there’s space both on the ground floor and upstairs in an area that can be accessed either by stairs or elevator).

“It’s about comfort foods,” Adkisson says of the available fare. “Our clientele is drawn to the meatloaf and fried chicken, country steaks — comfort home cooking.”

Once customers have consumed any of those, banana pudding garnished with Nilla wafers, a Southern favorite, beckons for dessert. Meanwhile, a grab-and-go case offers ready-made sandwiches and one of the store’s big sellers: sushi, prepared fresh daily in the seafood department.

Of the various items on display in the signature meat and salad case, nearly everything is made in-house from scratch, several from recipes provided by the store’s own associates.

That’s not the only point of pride for the section, however. “We have an in-store meat smoker,” notes Adkisson. “We have barbecue on the bar every day,” including ribs and hand-pulled pork, beef and chicken. There’s also a brick oven for pizza that sells by the slice and whole pie.

The section does a brisk all-day business, but one eating occasion is especially popular. “We do a full-scale breakfast bar, we do a lunch bar, and then we also do a dinner bar,” says Adkisson. “Lunch business is very big here.” Nearby East Tennessee State University (ETSU) and UT, as well as the city’s medical facilities, provide a steady stream of hungry midday customers.

As for the decision to lead off with the wall of values and deli/bakery, rather than the more traditional produce, Glei notes: “We’ve got a pretty big café experience in a lot of our stores. It’s one of our legacies; customers like it and expect it, so for customers that really want to come in here on the run, and then they can get on out, it really makes it much more convenient.”

Over at the Cheese Shop — the first added to a Food City location “in quite a while,” according to Bishop — all of the artisan selections are cut and wrapped by hand, with blue cheeses, cheddars and the store’s hand-pulled mozzarella proving to be particular draws for customers.

Express and Local

The most noticeable thing about the fresh fruits and vegetables on sale in the Johnson City store is that “the majority of our produce is behind glass doors,” as Adkisson points out, attributing that merchandising decision to, “of course, energy efficiency, but also the perception it gives the customer. They recognize that product is fresher.”

“We just know, even though [customers have] got to reach in the drawer and get the apple and get it out, they’re going to get a much better experience with [our] apples, because a lot of retailers display them off refrigeration,” adds Glei.

Another advantage of the doors, according to Glei, is a more pleasant shopping experience because they prevent cold spots in the store. “I think a lot of people try to rush through the section because they’re cold,” he observes.

Within the doors, there are some innovative items. Take the new snack cup program, featuring such ready-to-go items as melon slices or raw baby carrots, broccoli and cauliflower. “We’ve always had cut fruit, but these $2 snack cups have just been phenomenally successful and driving this section,” notes Adkisson, as it enables those in search of them “to get actually healthier snacks.”

Then there’s the recently introduced Short Cuts program, aimed squarely at “busy families on the run coming in to get a fresh, healthy option for dinner,” as Adkisson puts it. “So we’ve done all the work for them in the store, for a stir-fry or salad toppings.” At the time of PG’s visit, the packaged offerings include sweet potato slices pre-seasoned with cinnamon, as well as Brussels sprouts and mixed vegetables. Items in the program change seasonally.

Shopper reaction to Short Cuts has been similarly enthusiastic. “Customers are responding to convenience, especially in this store, better than ever,” says Glei.

Another focus in produce is on local items. “We buy a substantial amount of locally grown,” affirms Adkisson. Among those local growers is Scott’s Farms, located within 20 miles of the Johnson City store, in Unicoi, Tenn. “They provide us with strawberries, corn, beans, half runners,” notes Adkisson. “It’s something everybody knows in our community, and they like to see in our stores, and we’re one of the few that does it.” That producer and others are spotlighted through in-store signage and digital media.

The partnership between Food City and local farmers has a long history. “You guys have been local for, what, pretty much all your lives?” Glei quips to Adkisson and Bishop. “It’s not a new thing to us.”

Alongside produce is a floral and gift shop that offers an unusual option: an engraving station where customers can have mementoes embellished with a personal touch. Notes Floral Supervisor Emily Parton, “It’s going really well, especially [for] holidays, anniversaries, back-to-school, teachers’ gifts,” with pens, pocketknives and luggage tags standout candidates for engraving.

Prime Grade

Food City as a chain has long been famous for what Glei calls its “unparalleled meat and seafood case,” and the Johnson City store is no exception.

Along with a lot of packaged product behind glass doors like those in produce, the department offers a range of signature made-in-store items, including “a crab cake that’s nothing but crab cake — no fillers,” prepared by the former chef of a well-loved seafood restaurant that used to operate in the area, and steak burgers, which, as Meat Supervisor Johnny Stout explains, literally live up to their name, having been made from the trimmings of the department’s steaks.

In fact, when it comes to hamburger, “we grind all of our ground beef in the store every day, all the time,” notes Glei. “There’s no ground beef that’s ever more than 18 hours old. Many retailers have gone away from that; we believe that’s one of the things that sets us apart.”

In terms of meat quality, “we do a very good job with Prime,” Glei says. “We priced Prime at an exceptional level, and once customers try it, it creates a point of destination for them to come back. Once you have a Prime steak, you pretty much want to trade up to that type of retail price point.”

According to Stout, ribeyes, sirloins, filets and strips are all big sellers, especially during peak summer grilling season, as well as boneless chops, ribs and kebabs, the last of which, with the arrival of warmer weather, “we bring to the center of the case and make a big show of [them], which makes a nice presentation,” he says.

On the seafood side, sushi, which Adkisson notes has been “a big win” for the Johnson City store, is prominently displayed in a grab-and-go case that’s refreshed every 24 hours, with any product older than that promptly discarded.

Souda Panyala, lead sushi chef and newly minted U.S. citizen, identifies shrimp tempura and spicy crab as the most popular varieties. “Her job knowledge and what she does is outstanding,” enthuses Adkisson. “She’s able to relay that job knowledge to our customers, educate them about sushi and create sales because of it.”

Beverage Stations

Over in center store, one aisle is largely dominated by Nature’s Market, the store’s dedicated natural and organic section, in which a wide assortment of items is available, although the store also integrates some organic and natural products.

Moving into the pet aisle, Glei notes the current trend toward grain-free pet foods, while the expanded detergent aisle has allowed for a larger assortment of SKUs, thereby enabling the category to perform “substantially better” than in the original store.

Perhaps the biggest draws in center store, however, are the store’s growler station and brand-new wine section, since, at the time of PG’s visit, wine sales in Tennessee supermarkets had become legal only the month before.

“We actually had things set up that were a little over-spaced in the snack foods and some of those areas in anticipation” of the new law, explains Glei, adding that by the end of the year the company will have reset upwards of 70 stores in the state to make room for wine.

Despite its newness, the section, known as the Vinery, offers an impressive array of product. Growler Lead Bill Phillips, who also oversees wine, identifies Food City “favorite” Quail Oak — which the chain developed in partnership with a major winery — among the section’s big sellers. As for shoppers’ level of wine knowledge, Phillips notes, “We have some that are very informed; a lot of the others are still trying to find the wine they like.”

To help the latter type of consumer, Glei says: “We’ve come up with some wayfinding that’s fairly simple; we worked with some of our suppliers, came up with this fun little phonetic way to say [the name of the varietal] and then some of the things that you might find about the wine,” including flavor notes and appropriate pairings.

The overall theme is “explore, experience, enjoy,” he observes, “because we think that’s the journey many of our customers in Tennessee are going on, now that they can see wine every time they go to the grocery store.”

One minor snag is that stores in Tennessee can’t hold free in-store tastings — yet. “There is a path toward that,” notes Glei. “We’re going to pursue it.”

Beer, meanwhile, has been big business at the Johnson City store since day one, especially craft brews. “Over half of our cold beer case is dedicated towards craft,” says Adkisson, indicating the product, which is naturally behind glass doors. “The domestic still does very well for us, but craft beer is booming. I think Millennials drive a lot of that. We’re fortunate to be in an area with a lot of microbreweries — we’ve got one here in town, Yee Haw Brewing. We’ve got them in all of our Food City locations. Of course, we have them on tap here, too.”

As well as Yee Haw Dunkel, in-demand on-tap quaffs hail from nearby Asheville, N.C., and other parts of the region. “That’s what we’re focusing on,” he affirms.

Asked how the different growler sizes sell, Phillips replies: “64 [ounces] is kind of the most popular, and we offer it both in glass and in plastic. We kind of brought this little 32-ounce one, and for a lot of people, if they only want to have 1 or 2 pints, or want to try [a] beer, this is a more practical way.”

The vast frozen section boasts some of the widest aisles PG has ever seen in a supermarket. “One of the biggest responses to opening this store that I’ve heard is the wide, clutter-free aisles; it’s easy to shop, easy to maneuver,” notes Adkisson, adding that “you can open [the doors on] both sides of the aisle and there is still a clear, wide path for shoppers to maneuver.”

As for the store’s being clutter-free, there are few free-standing displays in evidence. “We don’t have a lot of stuff on the floor,” affirms Glei. “That’s a decision our shoppers asked us to make.”

With the exception of some HBC products located in nonfoods, the pharmacy is laid out in a store-within-a-store format, with its own aisles and signage, so as to provide “the drug store experience,” as Glei calls it.

Next Stops

Regarding the future of this store model — Food City’s third incarnation of a flagship store since 2007 — Steven C. Smith, president/CEO of Food City parent company K-VA-T Food Stores Inc., says that the company has a few choice markets in mind for upcoming locations.

“We just moved into Chattanooga, [Tenn.,] in the last year, and I think this would be a very popular store in the Chattanooga market, in the right location,” he observes. “We’ve been in Knoxville, [Tenn.,] for 20-plus years, [but] we haven’t had a chance to build a flagship store to this caliber in Knoxville yet; that would be a natural place [for such a store], with the university there, a larger metropolitan area.”

Further, as his interview with PG winds down, Smith adds that Food City’s hometown of Abingdon, Va., is also slated to get a similar store. “Our goal is to break ground this fall,” he says.

All are sure to see similar success.

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