Pictured above, Steve Smith, CEO K-VA-T Food Stores
K-VA-T Food Stores CEO Steve Smith told reporters in a video conference Tuesday morning his Food City chain is working to purchase enough masks for every employee who wants one to be able to wear one at work. “Our associates are free to wear them as they desire, and hopefully we will be supplying them by sometime next week,” Smith said. “In the meantime, if they have homemade masks, they are welcome to wear them and encouraged to wear them.” Smith also detailed other changes the company is making in response to the coronavirus crisis.
From a business perspective, Smith said the company is working to be more efficient. The company has relaxed its standards on hiring over-the-road truckers (clean driving record and two-years over-the-road experience required). “We have partnered with a lot of third-party truckers in our area who may have lost other loads over the last four weeks,” Smith said. In addition, the company is running more “backhauling” routes in which a truck that delivers groceries from the distribution center to a store makes a pick-up trip to a supplier before returning to the distribution center. “We’re not shipping air on empty trailers. We’re shipping product that’s going to get back and get to people’s stores.”
Smith said producers are still dropping the varieties of SKUs they offer in an effort to concentrate on production of core products for which demand remains ultra-high. The number of unavailable SKUs currently runs in the hundreds, Smith said, and he expects that number to reach into the thousands because demand for key products has not dropped as the crisis has continued. “Last week, our bath tissue sales – even though we don’t see a lot of it on the shelves – were up 80 percent compared to last year. Our paper towel sales were up 101 percent…Ramen noodles – up 132 percent. Soup – up 88 percent. Household cleaners, another item that people say they can’t find a lot of, sales are up 132 percent. Certainly, manufacturers are shipping more product, It’s just still not quite enough.”
Consumers are also changing the way they shop, Smith said. In the 55 stores where curbside pick-up is an option, demand is up 350 percent over the last four weeks. “We’re limited a little bit by the scope of the number of people we can have to professionally and adequately shop for the consumer. The last I looked, we had most of our stores sold out for today and tomorrow.” The stores also offer home delivery through a third-party shopping service.
The one area where the company is taking a bit of a beating is fuel sales. The combination of gas price declines and a drop in demand has hurt the company’s bottom line at the pump, though the pain is mitigated by the fact the company is paying less for diesel fuel for its truck fleet.
Smith said fuel consumption is down 30-40 percent in Food City stores, and Smith said he expects prices to continue to go down over the next few weeks, based on low demand. “I had a customer tell me the other day, ‘You know, Steve, you lower the dang prices for fuel and I’ve got no place to go.’”