Stepherson Inc. has been a Memphis staple since before Elvis or BB King were household names. The employee-owned business operates nine locations under the Superlo Foods and Stepherson’s banners across the Memphis area, as well as a central warehouse.
The company was founded in 1944 by brothers Wesley, Kenneth and Jack Stepherson. Wesley and Kenneth were part of the Army Air Corps when they received a letter from Jack, according to Stepherson Inc. VP of Finance Ashley Harris.
“Jack wrote his brothers and asked them to send him all their money. He was going to buy a store,” Harris explained. “Jack raised $1,600…and they purchased a store in midtown Memphis. And that is how it all began.”
By the 1950s, the Stepherson brothers were able to join the Department of Research and Education, a share group consisting of 50 members from around the U.S. Through this group, Harris’ grandfather Kenneth Stepherson was able to spend a week in Iowa, learning about the bakery department.
“He came back to Memphis and opened one of the first deli and bakery departments in the city,” Harris said.
To this day, Superlo Foods and Stepherson’s are known for their fried chicken and coleslaw.
Harris’ grandfather was left alone in the business with two stores by 1978. Her father, Bob, along with another family member, joined the business as partners. Meanwhile, the family continued learning from the share group. By the mid ‘90s, the younger partners figured a new everyday low-price format was perfect for the Memphis area.
“That was when the first Superlo Foods was developed, and now there are eight in the Memphis area,” Harris said.
In October 2010, as part of the founder’s succession plan, the family sold 30 percent of their shares and formed an ESOP. Ten years later, the company became 100-percent employee owned. The family is still involved in everyday operations.
Crime taking toll on business
The company has two programs designed to improve the lives of its employees and the community as a whole. Its Community Rewards program allows tax-exempt organizations to receive a percentage of a customer’s purchase.
Likewise, the company has a program that supports its associates who are facing hard times. The Employee Support Fund was another idea the company adopted from the DRE share group.
The company will help up to $1,000 for the program’s members. Unfortunately, the fund has completely run dry. Although payments are still being made, the payouts have far outpaced the fund’s ability to replenish. The company is absorbing the costs of continuing the fund, but crime in the area has been detrimental to the fund and the business overall.
“We’ve had a lot of broken windshields at our stores. It’s depleted the fund, but I think it’s helped with the mentality of when you’re trying to hire somebody,” Harris said.
Harris has been dealing with increasing crime in Memphis for a while now. She recently wrote a letter to local and state lawmakers which has gotten “a lot of attention,” according to Tennessee Grocers & Convience Store Association President and CEO Rob Ikard.
She wrote the letter due to increasing difficulty to “operate any retail establishment in this city.” Additionally, she told The Shelby Report that she had sent the letter out to politicians and the community at large to help everyone understand how much crime is affecting her stores.
She explained that the amount of retail crime has not only depleted the Employee Support Fund, but has also caused her to increase her prices, lose employees and devalue her stores’ reputations. She and Ikard agree that social media is playing a major role in the brazenness of retail crime.
“It used to be, they would just hide things in their jackets or on their person or whatever. Now, they will just step out,” Harris said.
Overall, Harris estimated in her letter that crime has cost her “millions of dollars a year.” Stepherson Inc. has invested around $3 million to improve its security. That cost comes from the increased rates of security companies and the upgrades in technology.
Keeping edge on competition
Harris admitted that there are not “many independents around Memphis.” Her company is mostly competing against big box stores like Kroger, she said. To keep an edge on its competition, Superlo Foods has continuously improved its perishable departments.
“Especially meat,” Harris said. “We still grind meat every day in store. We have butchers cutting every day.”
The grocer also has an extensive cut fruit program, with all of the fruit cut in house.
Stepherson Inc. is focused on customer service.
“It’s what we pride ourselves on. It’s just being a little bit friendlier than your regular big box locations.”
Likewise, the company relies on its managerial staff for product selection. The autonomy that Superlo provides allows management to create partnerships with local brands, alongside its distributor, Associated Wholesale Grocers.
Harris said she hopes to expand the ethnic fresh food offerings. While she said it’s difficult to find someone who can take on that challenge, her partnerships with local restaurants have provided some unique opportunities.
“We do have a local restaurant…that is now coming into one of our locations and preparing food,” she said. “We do offer a place for local restaurants. We do have grab-and-go sections. Some of the Italian restaurants, we have their lasagnas and their alfredos.”
The heat-and-eat program is only available in stores local to the restaurant.
Convenience continues to be increasingly important to consumers. Harris said it fits today’s modern family.
“Working parents and kids are in school and in extracurricular activities. (Parents) need that onion already chopped up…my dad would say the opposite. He’d go, ‘you need to make time for that. Save that money. Why are you buying all this already chopped up?’ But more and more parents nowadays, it’s a lot easier when you try to cook at least a little bit healthier to be able to already have a lot of stuff prepared and chopped up,” she said.
She referenced a viral video from earlier this year, where thieves in Colorado were filmed taking a basketful of laundry detergent. She said she has security footage of a similar event at one of her stores which resulted in an employee’s injury.
“One of our employees was just so upset. He went out there and tried to grab one of the baskets that only had two detergents left in it. And the criminal came and pushed him down. He hit his head. It is fueling the fire that they know they can come in and do it, and the police aren’t going to show up because they’re understaffed or they’re not going to show up on time.”
The company used to employ a security guard that would hold the potential thief in handcuffs. Yet, social media has eliminated the guard’s authority.
“You can’t touch them because of videos on social media,” Harris said. “They’re going to scrutinize that security team; they’ll scrutinize our employees.”
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