Food City Buying 29 Bi-Lo Stores, Will Enter Georgia With Purchase

Abingdon, Virginia-based K-VA-T Food Stores/Food City has reached an agreement with Southeastern Grocers, which operates the Bi-Lo, Winn-Dixie and Harveys banners in the Southeast, to purchase 29 Bi-Lo stores. The stores are located in Chattanooga, Tennessee, and northwest Georgia. Food City will enter a new state—Georgia—with the deal, while Bi-Lo will exit Tennessee. Food City currently operates 105 food retail outlets.

“Food City already operates in southeast Kentucky, southwest Virginia and northeast Tennessee, and so the acquisition of our Bi-Lo stores in that region is a natural expansion for them. All stores and store associates will convert from Bi-Lo to the Food City banner,” according to an internal memo from Southeastern Grocers to associates on Thursday.

“We believe this is the right decision not only for Southeastern Grocers, but also for our stores and associates in Chattanooga and northwest Georgia,” the memo says. “By transitioning what represents around 3 percent of our entire store base, we will be able to accelerate reinvestment in other areas of the Bi-Lo banner. Given K-VA-T’s reputation in the market, the compelling value they offered and their focus on creating a smooth transition for our associates, we believe the transfer has the potential to be a great opportunity for all of our stakeholders.

“It was not our strategy to transfer these stores; K-VA-T approached us about these stores because they recognize the value these locations and our associates offer to our communities and local customers. Furthermore, any rumors of the Bi-Lo banner being sold by Christmas are entirely untrue! In fact, after transitioning to K-VA-T what represents less than 4 percent of our entire store base, we intend to use much of that profit to accelerate reinvestment in other areas of the Bi-Lo banner.”

Southeastern Grocers says the store transfer and handover dates will be provided as the company get closer to the completion of the transfer of each store. Southeastern Grocers anticipates that stores will begin to transition on Aug. 30, with all stores fully transitioned by Oct. 5.

“It is important for all of us to remain focused on continuing to provide our customers with the same everyday high-quality service they’ve come to expect and enjoy,” Southeastern Grocers says in the memo.

Food City President and CEO Steven C. Smith said in a statement, “We are extremely excited to have this opportunity to expand our operation into the Chattanooga and northwest Georgia markets. We certainly look forward to welcoming the Bi-Lo associates to our Food City family and serving the region. Our consumers can rest assured that we plan to complete the conversion process as quickly as possible, with the least interruption to the normal flow of business. It’s our intention to enhance the overall variety and selection and further develop the services and conveniences provided to our shoppers.”

Rob Ikard, president and CEO of the Tennessee Grocers and Convenience Store Association, told The Shelby Report on Thursday, “K-VA-T Food City is a great company, a great employer and a great corporate citizen in any market they reside in. The Chattanooga area is lucky to have them.”

Added Ian McLeod, president and CEO of Southeastern Grocers, “We are pleased to enter into this transaction with K-VA-T, which we believe is the right decision not only for Southeastern Grocers, but also for our stores and associates in Chattanooga and northwest Georgia. This was not an easy decision for us, as we have the utmost respect for our associates who serve our customers in these stores so well. In the approach by K-VA-T, we believe we have identified a strong partner to ensure these 29 stores and our associates are positioned for continued success under another reputable regional brand. On behalf of the management team, I want to thank all of our hardworking Bi-Lo associates for their dedication and support over many years.”