Steve Smith, president and CEO of K-VA-T Food Stores, said the company plans to expand the Food City brand in the Johnson City market, but said the chain has not signed a lease with the developer of Franklin Commons, a proposed $20 million retail center at the intersection of North State of Franklin Road and Sunset Drive rumored to be the grocery chain’s next home.
“I’m very familiar with the location, certainly like that location, and we’d like to have a store in the proximity of that location sometime in the future,” Smith said Wednesday at a meeting with the Press’ editorial board. “To say we’re coming would be premature, and to say when would be way premature.”
GBT Realty, the Brentwood company seeking approval from the City Commission for the 14-acre shopping center, submitted plans in February for a two-phase development at the site anchored by a 59,000-square-foot grocery store with a fuel center near the edge of its parking lot.
The Franklin Commons site is on the edge of several residential neighborhoods and near an area that has been targeted in the past few years for new housing developments, attributes that Smith said are valuable to any grocery store.
“We’re always looking for where growth is and where opportunities are,” he said. “Where’s the head count, the disposable income and what is the market potential?”
A Food City store already resides at the corner of North State of Franklin and West Market Street in the Markets West at Franklin shopping center, about a mile from the proposed development.
Smith said the congested intersection is at times a detriment to business for the store, which is tucked away at the back of the center and has no fuel station.
“That’s a prime example of being a victim of almost too much traffic,” the CEO said. “It’s hard to get in and out of there, and sometimes you take your life into own hands.”
The Food City at Markets West is older and smaller than much of K-VA-T’s supermarket stock, and the property leaves little room for expansion, Smith added.
But he wouldn’t discuss the future of the existing store if Food City does open a new west side location, again saying any talk would be premature and would unduly alarm the current store’s employees.
“It’s not really the footprint that we’d like to have, but at the end of the day, to say we’d close it or convert it to some other usage, we’d certainly evaluate that when and if we get another location that would compete with that,” he said. “I don’t want to try and be coy, but to say we’d close that, I don’t want to upset 70 or 80 people. They wouldn’t lose their jobs, but I don’t think it’s prudent to get my people upset or concerned.”
In some cities, like Rogersville and Grundy, Va., K-VA-T converted former Food City buildings into Super Dollar Discount Foods stores, which are generally smaller than the company’s flagship properties and offer more store-branded products.
The company operates 10 Super Dollar Discount stores in its three-state territory, with the lone Tennessee location in Rogersville.
In addition to the Markets West store, there are nearby Food City locations in south Johnson City, Jonesborough, Boones Creek, Piney Flats, Gray and on the east end of Elizabethton.
Smith said there could be opportunities in the north and the east of Johnson City for additional locations.
One community that’s not ready for a Food City is Erwin, which Smith said doesn’t have the population for a new grocery store.
“We certainly have looked in Erwin, and we’ve looked at several locations in Erwin,” he said. “We certainly are not going to write Erwin off, but at this point, we don’t have any plans to build a supermarket in Erwin.”
Food City hasn’t been adding to its number of stores much during the recession, but Smith said strategic renovations have allowed the stores to increase floor space by removing little-used video departments.
“The video stores have been profitable for years, but as you’ve seen in the news recently, the business isn’t what it once was,” he said. “So we’ve been taking those out and freeing up some room for expansion.”
If the Tennessee Legislature approves a bill allowing wine in grocery stores, the supermarkets could need the additional room for wine racks.
“I think you’ll see us look at a couple of stores in Johnson City very shortly to be able to expand some stores and certainly add more variety, and more selection,” Smith said.