What do you call a chain of supermarkets in Kentucky, Virginia, and Tennessee? How about K-VA-T Food Stores? K-VA-T is one of the largest grocery chains in the region, with more than 100 supermarkets under the Food City and Super Dollar Discount Foods banners. Originally a Piggly Wiggly franchise with three stores, K-VA-T was founded in 1955. It has grown by acquiring stores from other regional food retailers, opening new stores, and adding services such as about 75 pharmacies, 55 Gas'N Go gasoline outlets, and banking. Its Food City Distribution Center provides warehousing and distribution services. The founding Smith family owns a majority of K-VA-T; employees own about 14% of the company.
In addition to grocery stores, K-VA-T operates Misty Mountain Spring Water, which bottles spring water for sale in Food City stores as well as under private labels for other customers, and a logistics arm, Food City Distribution Center.
K-VA-T stores rang up an estimated $2.1 billion in sales in 2011, vs. $1.9 billion the previous year.
The regional grocery company has been expanding its Super Dollar Discount Foods chain in response to increased demand from consumers for lower-priced groceries. Super Dollar carries a limited selection of store brand foods and some national brands with savings of 30% to 40% relative to traditional supermarkets. The small stores keep costs low by employing a smaller staff and have no bakery. The recession has been a boon to low-cost, limited-assortment chains such as ALDI, Sav-A-Lot, and Food Lion's Bottom Dollar chain.
To boost sales, K-VA-T recently brought back some favorite local brands. These "legacy" brands include Kay's Ice Cream, Terry's Snack Foods, and Kern's Bread. To help its customers make more informed choices about which foods to eat, Food City stores in fall 2010 introduced a nutritional scoring system, call NuVal, which ranks food on a scale of 1 to 100 (with 100 representing the highest nutritional value). Some 35,000 products from apples to potato chips have been scored with the number appearing next to the price of the item. The system is partially owned by Topco Associates, a buying cooperative to which Food City belongs.
Jack C. Smith, founder and former chairman of K-VA-T, died in 2007. His son Steven Smith is CEO of the company. – less