Food City’s CEO Steve Smith participated in a media update on March 24 regarding COVID-19 and its effects on the grocery industry.
“First I would like to stress that there is absolutely no evidence of food or food packaging being involved in the transmission of the virus,” Smith said. “This is not a food-borne illness, and it is not known to be transferred via food.”
COVID-19 has, however, had an effect on the supply and demand of various food items.
“Low stock levels of some items reflect demand and not really supply,” he said. “Over the past few days, we have done many things to help alleviate some of the bottle necks of our supply chain. But, we are continuing to experience out-of-stocks at store-level due to some manufacturers’ shortages and cuts to our distribution centers. We anticipate this being an ongoing problem for the coming weeks, but, the United States will not run out of food. Grocers will not run out of food. Precautions are being taken to ensure your local grocery store is as safe as possible, and I can personally guarantee you that our stores will remain open seven days a week.”
Food City aims to hire 2,500 new employees
Due to personnel shortages, Food City recently hired 76 additional associates at the distribution center and shifted more than 140 qualified retail associates to the distribution center. They have also hired 1,200 people in just one week’s time at their 130 retail stores on their way to hiring 2,500 new employees.
In the coming days, Food City is still looking to hire another 30 associates.
Smith also noted that some of Food City’s suppliers are reducing the number of items they are producing and eliminating varieties “in order to focus their efforts on increasing the productivity and production of their core items.”
Limiting high-demand items
Food City has also begun limiting the number of high-demand items that can be purchased at a given time.
“Being concerned about the possibility of shortages is only natural,” Smith said. “It’s human nature. But, responding to that fear with panic buying is ironically the leading contributor to these shortages. We’d like to stress how critical it is for our customers not to hoard items, only buy what you need for the coming week and give the supply chain time to catch up with the demand.”
He noted that, though Food City hasn’t seen many shortages of produce, the stores’ supply of meat has been “a little spotty.”
“We think that’s going to get better, but there will be some bumps along the way,” he said. “What we call ‘center store,’ or the grocery items are probably going to be a little bit more problematic. I think we’re looking at weeks if not months of challenges to get the supply chain back in order. Obviously, milk and bread are challenges because of the spikes, but we’re working with every supplier that we can find to be able to have those items in stock.”
All stores are getting a ‘perishables’ truck every other day on which meat is delivered, but he noted that stores might run a little short on these perishables towards the end of the second day.
“But, as our new hires get better trained, we’ll be able to add more trucks and, hopefully, towards the end of this week, we can go from an every-other-day shipment to a four-day-per-week or even five day if necessary,” Smith said.
In regard to the million-dollar question: whether or not toilet paper, hand sanitizer, paper towels and cleaning wipes are a guarantee in Food City stores, Smith said, “No, unfortunately, they’re not a guarantee. But we are getting toilet paper, paper towels and other paper products delivered to our distribution center every single day. We have told our stores not to order these items. When we get them, we will allocate those out to our individual stores and ship them in a fair way. But, until we get this supply chain ramped back up, there will be some shortages.”
He noted that he does anticipate the day coming soon when there are no longer shortages, though he explained that he doesn’t know exactly when that will take place.
Food City has also postponed their ads “due to the inconsistent supply chain quantities” though they will have “in-store features while supplies last.”
Food City’s response to price-gouging
“I think it’s unbelievable that people would do that at this point in time,” Smith said. “We’ve had some suppliers that have come to us—all of them we had never done business with before—who say that they have x or y, and we know what the market should be. If they’re not in that market, we’re going to say, ‘take your product and put it somewhere else.’ Everybody deserves to make a profit when they sell an item, but we’re not going to gouge prices or raise prices unnecessarily to our customers, and we’re not going to participate to anybody else who does.”
“Safety is our top priority”
“The safety of our valued customers and our dedicated team members continues to be our top priority,” Smith said.
Food City offers several options for people to shop while practicing social distancing: Go Cart, curbside pickup and home delivery.
They have also adjusted their store hours from 7 a.m. to 10 p.m. daily to give associates extra time to clean, sanitize and re-stock. They encourage customers age 65 or older and those with underlying health conditions to shop during the first hour of store operation.
To say ‘thank you’ to their employees, Smith noted that Food City is also in the process of implementing a bonus system totaling around $3 million.
Because most restaurants are closed or only offering limited services, Smith noted that more people are getting their food from super markets, and this has contributed to the spike in sales and shortages at Food City.
Food City has also partnered with several suppliers who might normally supply only restaurants and have several employees “on loan” from some Johnson City businesses.
To customers who are concerned about shortages, Smith said, “There is no question that there is some uncertainty out there with what’s going on. Anxiety is natural when you’re in uncharted territory, and we certainly are with this pandemic. But, you can rest assured that you’re going to have groceries to buy when you come to Food City. You might not have every flavor or every size. Quite frankly, when you come in, we might not have an item that you may need. But, if you come back the next day, we will probably have that item.”
Smith said that the most important thing he could tell customers right now is “We’re asking our customers to bear with us during these difficult times, to enjoy some different foods that they might find in our stores that they may never have tried before, and have patience with our associates who are on the front lines.”