The Food Town Years
LIFE IN THE LION'S DEN
Devotion to ---- or some would say obsession with ---- work has made Food Lion a powerhouse supermarket chain.
By Mark Wineka and Jason Lesley.
(Reprinted with permission from Mark Wineka, The Salisbury Post, and BusNC)
Wilson Smith caught a heavy case thrown from the pallet and, in one motion, set it down and ripped open the top with a razor. He then fielded another and another, repeating the routine, all the while telling his fresh-faced crew where to go with stock. "Send all of that canned stuff to Aisle 2," he barked. "Those belong next to produce on the far end." Smith never stopped moving. At age 56, he was working circles around the young boys, who would have watched in awe had Smith allowed them the time.
Dewey Preslar was dragging, but as a new clerk in a new store in Albemarle, he wanted to impress one of Food Lion's founders. He and the others tried to keep up, stamping prices and throwing cans on the shelves at a feverish pace. Still, Smith always seemed to be a row ahead of them.
"Boys, let's take a break," Smith said finally.
He led them back to the break room, where they all got a Coke. The young men looked for a place to rest amid the clutter. Preslar kept his eye on Smith who turned his Coke bottle up and downed the whole thing with one swallow. He slammed the bottle on the table as he moved toward the door.
"All right, boys, let's get at it," Smith said.
That summer day in 1973 would live with Preslar. From then on, he knew the type of company he was working for and what would be expected of him. The day would help explain, whenever he questioned it himself, the long hours he put in as he advanced through the ranks to become a risk and insurance supervisor.
The man behind Food Lion learned the value of work early in childhood. Bob Ketner expected his four boys --- from the eldest, Glenn, to the youngest, Ralph --- to work on the farms and in his stores. Wilson Smith, forced to grow up fast, with no mother and an absentee father, started earning money with his wagon at age 8. Tommy Eller drew a regular wage as a 12-year-old at the A & P and had to compete at home with nine brothers and sisters. Jim Berrier was raised on the daily chores of his father's farm. Clifford Ray had carved his own place in the world by living off the land. They knew no other way to approach life and had proved to themselves time and again that anything was possible if they worked hard enough.
Hard work kept Food Lion, then Food Town, from going under during those first 10 years of "research and development." Armed with a winning concept, the men who built it soon recognized that even harder work could allow them to grow beyond their wildest dreams.
In the beginning, these few men were the company. As Food Lion grew, their work ethic became the underpinning of the company's culture. Like Preslar, other employees --- those who would stick with Food Lion --- witnessed how hard their bosses worked. For some, it became inspiration. For others, it meant resignation.
"Mr. Ketner, I want to quit," a young office employee told the president one day.
"You're doing a good job," Ralph Ketner said. " Why do you want to quit?"
"I come in in the mornings and you're here. It doesn't make any difference what time we come in, you're here. When I leave in the evenings, it doesn't make any difference what time I leave, you're here. I just don't want to work for anybody who works as hard as you do, because you expect it out of me."
"That's right, fella," Ketner said. "Let me tell you something. I probably make more money than you ever will. But I get happiness out of work. You haven't learned that yet, but I love to work. You need a job 8 to 5. You'll be with your family, be with your kids and everything. Your route's different than mine. We both walk to a different beat of the drum."
The young man quit.
A definite Food Lion personality developed. Psychologists even test for it as part of the management recruitment and hiring process at the company. Tom Smith, the current president and CEO, personifies the qualities. " An ambitious person," he says in describing the employee Food Lion looks for. "A person who would put forth whatever effort it took to make something work and wouldn't be the type of person who would reach a goal and feel relaxed. And the type of people who would really care about the people of the company because, again, in a growth company, you really have to tie the people and the company together to make it work. A person who is willing to change a lot, too."
From the beginning, Food Lion explains to a new employee that he has just set foot on a fast track.
Linda Ketner, Ralph's daughter, worked as a Food Town office receptionist when she was 14 and later headed the company's first training department in the mid-1970's. The successful Food Lion management employee, she says, had better be a workaholic, 8 a.m. to 8 p.m. weekdays and much of the day Saturday.
"You need to love to work," she says. "And you need to have a very understanding family. No hobbies. No other interests. You need to want to be the best. I don't think any of them, when I was working there, was working to get rich. Nobody had any idea it would be as successful as it is now. I know my dad never worked to get rich. I mean, when I was growing up, I never heard him talk about money, wanting things.
"Dad's the most unmaterialistic person I've ever been around. I don't think he ever made one cent that had anything to do with, 'Gee, I sure would like to make a lot of money,' or, ' I'd like to have a boat,' or, ' I'd like to have a country house.' It wasn't his motivation. His motivation was he loved to work. He loved to achieve."
Food Town became Ralph Ketner's obsession, increasingly so with the success of his low-price concept. He expected the people who worked for him to feel the same way. The joke became that a good company could be made from the people Food Lion hired or forced to quit through the years, but a thread of truth runs through the statement. Not every person is Food Lion material.
"Ketner demanded a lot of himself," says one-time controller Harold "Hap" Roberts. "He demanded a lot of all of us around him. He dedicated his life to it, I'll give him that, just as Tom Smith has dedicated his life to it. Ralph Ketner probably is the smartest man I have ever, ever been with in my life."
During his reign as president, Ketner dominated the Salisbury headquarters as he pored over every sales report, deliberated on every price, examined every lease and doggedly got after his staff to answer his questions. He constantly searched for better ways to do things --- especially methods to save money and time.
Ketner dictated memo after memo into a machine, and employees learned to dread directives with his familiar "R" signed at the bottom. He could cut an employee to the quick, and he could bring faithful employees to the brink of quitting. "If you go to bed at night and you don't dream about Food Town, you are not doing your job." Ketner told Hap Roberts.
One day, soon after Roberts joined the company, Ketner rode with him from headquarters to audit a store. Roberts, a 22-year-old not far removed from college, was playing the radio in his Datsun 240Z.
"Cut the radio off," Ketner ordered. "Get a memo pad out. If we think of anything we need to do, we'll write it down as we go."
And whenever someone went into Ketner's office, he had better have a notebook and pen with him. Ketner would be sure to ask for something. Years later, long after he had left Food Lion, Hap Roberts would have a wreck one day trying to write something on the memo pad in his car.
But the people who understand the hard-edged Ketner and shared his desire to see the company succeed learned to deal with him and separated the brusque, professional Ketner from the likeable, personal Ketner. They realized, too, how important Ketner's drive was in forging Food Lion's future. No one dealt with the numbers better. No one was a better buyer or tougher negotiator. No one could read a lease as well. He knew warehousing, and he committed to memory the price of every item in the store.
The balding and wiry Wilson Smith provided the perfect counterbalance. Employees considered him a "people person" first, less intimidating, more like one of the guys. Smith was constantly in the field, setting up new stores, giving employees the chance to see headquarters people as flesh and blood. Smith never forgot Glenn Ketner's instruction to make customers and employees his top concern.
"He was quite a worker," Tom Smith says. "He was a hustler and real enthusiastic. I guess the thing I always remember about Wilson Smith was that he established in this company a care for employees. He just wanted to make sure that in everything that was done, the employees were kept in mind. He really put a spirit in the company that we've worked very hard to maintain."
Without fail, every Christmas Eve, Wilson Smith paid a personal visit to the Food Town stores in his area, just to shake hands with the employees, wish them a Merry Christmas and thank them for the job they were doing. He continued the practice even after retirement. Stores he couldn't get to personally he telephoned.
Jim Berrier dealt with the numbers and people. He put up daily with Ketner's rantings and the directives spewing from his Dictaphone, but he considered Ketner a friend outside of the office. He even vacationed with him. Berrier looked on Wilson Smith and Tommy Eller as brothers more than co-workers.
Berrier took pills for his nervous stomach for 20 years while he worked at Food Town, and sometimes he felt like quitting. "But, you know, I understood. If I had not understood, I would have been gone. I'm glad I stuck it out, but it was rough."
Ketner blew his top one day when he learned that one of his mangers was heading up a division of the local United Way. It led to a memo:
"It has been the unwritten policy for years that no director or, in fact, no supervisor or store manager be encouraged to accept offices of president of any club because of the time it could take to properly fill that position. This also has included, and still includes, the accepting of any position as a head of a drive, such as United Way, and by the head of the drive, I mean head of any particular division of a drive, because this entails a tremendous responsibility to carry out the obligation accepted.
"There are a tremendous amount of people who delight in getting these appointments and have the time to carry them out. Food Town people positively do not because of our expansion plans, etc. Every person in the executive capacity or management capacity is needed to perform their duties for Food Town, thus leaving no time to carry through with outside obligations, especially when these outside obligations conflict with Food Town hours.
"What I am saying in a nice way is, don't get involved if it means sacrificing hours that should be devoted to improving your performance with Food Town."
Berrier felt Ketner's wrath himself at times. When Food Town was buying four mountain stores from the Giezentanner brothers in Asheville, Berrier and Ketner were among the crew taking inventory of the Black Mountain store. The Giezentanner men were there to make a count too. Both sides worked at determining the inventory before deciding on a figure that Food Town should pay for the store. Berrier counted all of the small merchandise near the front-end checkouts: razor blades, candy, chewing gum, cigarettes, etc. Finished, he gave his figures to Ketner, who promptly grumbled, "Hell, no." He thought Berrier had overstated the inventory, but Berrier was confident in his figures. Ketner asked another man to recount Berrier's work, while the Giezentanner crew took in the whole scene. The recount came within a few dollars of Berrier's total.
"You owe that fellow an apology," a man from Giezentanner told Ketner. The apology never came.
"But that was my job and that was his job, and I can understand it," Berrier said many years later. "I told him I was glad he did it. He's sure of the total, plus I knew unless there was something unusual that slipped in that I was right."
One day Ketner came into the office area where Berrier and five women looked after the bookkeeping and announced that they should all memorize the multiplication tables --- the 12th up to the 50th. If an employee was verifying an invoice and had 12 items at 47 cents each, the employee would know the extension was $5.64 without wasting time by punching it into an adding machine or calculator. All the bookkeepers, including Clifford Ray's wife, Jean, followed through on Ketner's order and became proficient.
Ketner periodically tested them with flashcards. The student who hesitated on an answer was wrong.
"If I had to do it over," Berrier says of his Food Town years, "I probably would have gone through the same things. It was enjoyable, even though it was hell sometimes, too."
One of Ketner's famous feats with arithmetic dealt with counting train cars. One day he and an unsuspecting Hap Roberts were waiting in their car for a freight train to pass a crossing.
"Let's count the cars," Ketner said.
By then, Roberts knew he had to establish the exact ground rules. Do they count the locomotives or start with the first freight car?
"Start at the freight cars," Ketner answered.
"Does the caboose count?" Roberts asked next.
"The caboose counts."
Roberts counted 96. Ketner came up with a number in the millions.
"How did you come up with that?" Roberts wanted to know.
"How the hell did you come up with 96?" Ketner shot back.
"There are 96 cars."
"I was adding the numbers on the side of the cars," Ketner said with a grin.
One day a warehouse manager in Salisbury called Ketner to task on his celebrated math trick. He challenged Ketner to take on the secretary fastest with an adding machine when the next train went through. A train finally came, and Ketner stood stoically, adding the numbers on the sides of the cars, while the secretary's fingers flew over her machine. After the train passed, Ketner said his total aloud, and the group waited for the secretary to read her bottom line.
"They weren't exactly the same, but they were very, very close," Roberts recalls. Still, Berrier had to chuckle as they all left the warehouse that day. "Well, I guess we got one over on Ketner," he said.
Ketner heard him.
"You better double check her work from now on," he said.
Ketner's office extension on the telephone system used to be "21." Clifford Ray always had a standard joke whenever he saw Berrier and Roberts coming through the door at the perishables warehouse on Julian Road. He would pick up his telephone and dial "21" on his rotary dial.
"I'm calling the man to see what the hell you all are over here for, " Ray would say. But he would only let it ring once or twice and hang up. Once Ray went through his routine and on the first ring he heard Ketner's familiar "All right" on the other end of the line. Ray hung up the telephone quickly and said, "Hell, he answered it."
Linda Ketner remembers her father going to work at 8 a.m. and coming home at 6 p.m. He would eat and play with her and her brother Robert for about an hour before spreading his work out on the dining room table for the rest of the night. The routine held true for weekends, too. But he was always accessible if the children had a problem. "He wasn't, 'Oh, don't bother me', " his daughter says. "He was always available. He was trying to meet everybody's needs: Food Town's and ours. The man worked like nobody I've ever known before --- and loved it. And that's the other thing I remember. He really left me with the sense that you really need to love your work. Because he was having a good time."
No one ever said it out loud, but Food Lion executives were and are expected to work Saturdays. "Everybody just did it," Linda Ketner says. "We wouldn't have thought of not doing it. It's the most incredible work ethic I've ever seen. That work ethic and the efficiency of it were started by Dad and continued by Tom. You get a company culture and a company ethic. And if somebody didn't do it, they wouldn't be on your team. They'd look weird. It would be like somebody came in with three heads.
Hap Roberts, a homegrown product, learned about the fast track early. He stayed with the company from 1972 to 1982, joining as a 21 year-old and retiring for health reasons at 31. As assistant controller and, later, controller, Roberts' duties at such a young age were considerable: He handled banking relationships and cash management, compliance with the Securities and Exchange Commission, investment policies, four-week income statements, shareholder relations, internal audits, acquisition and conversion of stores from competitors, inventory control, weekly financial-data transmittal, risk management, cash flow projections and more.
"I just didn't want to maintain the pace that I had maintained," Roberts says. "At Food Lion, you go up or you go out. That's as simple as it is. I would have lost my family, I'm sure, if I would have stayed. I mean there were some times we would work 40 and 50 days straight when we were buying stores from competitors. My normal workweek was 60 hours, and I would be there at quarter till 8 and leave there at quarter of 7 Monday through Friday, and Saturday I would work from 9 to about 1:30, quarter of 2."
Roberts knew within a couple of weeks of joining Food Town that the environment wasn't his cup of tea, but he was hardheaded and young enough to want to prove himself. The stock option he took also were golden handcuffs. As a child, Roberts had ulcerated colitis, and the residuals from that --- complicated by the job pressures --- put him in the hospital three times during his last year with Food Town. He eventually had surgery that left him weak and susceptible to illness. He stayed run-down. When he became ill, he risked dehydration. He would go to the hospital for intravenous fluids. "I knew I couldn't keep on going like that and keep my family, my health and sanity," he says.
When he left Food Town, Roberts felt as if he had lost a spouse. He loved and respected the men who had built the company: Ketner, Smith, Tommy Eller, Jim Berrier, and Clifford Ray. "Mavericks built Food Lion," he says. "I don't know who's maintaining it now, but it was built by mavericks. I was spoiled by them. I loved them. I guess you get spoiled once you've been exposed and get a taste of that side of the organization."
Wilson Smith wore many hats through the years: advertising man, head of merchandising, store manager, operations head, store supervisor. His hours were like all the rest. When he was supervising the Asheville stores, he woke at 5 a.m., drove the two hours, supervised five stores, drove the two hours back and got up the next morning at 6 or 7 and headed out the other way. Smith gradually moved into store planning and development. When a location was found, Smith had the new store built, stocked it and turned it over to the area supervisor, who did the hiring. At age 62, Smith was driving 1,500 miles a week.
"I wanted to stop." He says. "You see, the sad thing about it is, she (wife Evelyeen) raised both of our boys. I would leave in the mornings, and they were either getting up and going to school or hadn't gotten up yet, and when I came home at night, they had already gone to bed. So the only time I saw them was on Sunday, and many Sundays we were out taking inventory, so I was just working all the time."
Wilson Smith retired in 1979. By the end of that year, Food Town had grown to 85 stores in the three states. Within a couple of years, Jim Berrier, Tommy Eller, and Clifford Ray also called it quits. Ketner let up somewhat, handing over the presidency and day-to-day operations to Tom Smith, but he remained chairman of the board until May 1991. The men's legacy had long been established: Hard work pays off. It filtered through the ranks so that store managers assumed the company persona and expected it of their cashiers, stock clerks, and baggers.
With Tom Smith at the helm, Food Lion has not lost its reputation as a demanding place to work. In fact, Food Lion was a key focus in an Oct.22, 1990, article by Fortune magazine titled, "Do you Push Your People Too Hard?" Here's the beginning of that story: "Listen to a former store manager at Food Lion, the supermarket chain: 'I put in more and more and more time --- a hundred hours a week --- but no matter how many hours I worked or what I did, I could never satisfy the supervisors. I lived, ate, breathed, slept Food Lion. The hardest thing for me to be was a bitch. And I was a bitch. I had to be. They wanted 100% conditions, seven days a week, 24 hours a day. And there's no damn way you could do it."
The article angered Tom Smith. Rumors were he took that issue of Fortune out of any Food Lion where it was on the racks. Smith dashed off a letter to Fortune complaining that the magazine had left readers with a mistaken impression that Food Lion drives its people beyond their limits.
"The retail grocery business is a demanding profession that requires hard work and dedication," Smith's letter said." However, Food Lion has in place an outstanding support system of training, education and supervision."
Food Lion officials cooperated on the story because the subject, they said, was supposed to be about productivity and how companies have found ways to be efficient. They were suspicious of the finished story because former employees quoted were unnamed and, apparently, the United Food and Commercial Workers union played a role in connecting the reporter with those workers. A union attorney also was quoted. "Food Lion treats people worse than anyone I've seen," he said.
Without a doubt, the six-floor headquarters building in Salisbury with its maze of offices --- pedestrian, sterile and no-nonsense --- rocks to a much faster beat than the slow-moving Southern community around it. Employees throughout the system do the work expected of two or three in other companies. So say insiders and outsiders. "The number of employees per store is 50," said Corporate Jobs Outlook! Of Boerne, Texas, in a December 1990 report," whereas competitors' giant supermarkets may run 120 or more.
"While the huge supermarkets of competitors may have as many as 12 to 18 supervisors/managers, Food Lion stores operate with about seven. The firm has a high level of sales per employee: $117,226, compared to competitor Winn-Dixie's $97,351. Also sales per square foot of store space are 15% higher than Winn-Dixie's."
Brian Woolf, former vice president of finance for Food Lion, once said that when Food Lion took over other small chains, two-thirds of the employees left within six months. They were asked to work too hard.
But the company makes no apology for hard work, and loyalty to Food Lion among past and present employees runs deep, mainly because of that investment in the company culture.
Back in the late 1950's, Jeff Ketner --- Ralph's nephew --- took the Food Town work ethic to an extreme. The No. 2 store in Salisbury had little business one day. There were no groceries to bag. All the shelves were filled.
"Casey, what do you want me to do?" Jeff asked the store manager.
O.L. Casey learned his trade under Glenn Ketner, and he could always find ways to keep an employee busy. He told Jeff to clean the employee restrooms. So the teen-ager spent the next half-hour washing commodes and cleaning sinks.
"What next?" he asked when he had finished.
"Well, let's go check those restrooms," Casey said. He pointed out several things that could be cleaner. Jeff took care of them and returned to announce the job done.
"Let's look at them again," Casey said. Again, he nitpicked. Jeff knew this could go on all day. He decided to teach Casey a lesson. He got a disinfectant, flushed the water out of one toilet and thoroughly sanitized it. He put clean water into the bowl and locked the bathroom door.
"Casey, I got those restrooms ready for you," Jeff said.
As Casey inspected the sanitized bowl, Jeff proclaimed it so clean a person could drink out of it. He promptly snatched a paper cup, dipped it into the bowl and threw back a big swallow of water. Casey's face turned red.
"My God, you must have them clean," Casey cried. "You can stop cleaning the restrooms now."
Mark Wineka and Jason Lesley are editors at The Salisbury Post.