New Direction for Southern Family

Its formative years have been full of challenge, but Southern Family Markets is now hoping to piggyback its way to success. We started out with 88 stores and now we're down to 42. But this is what we consider a solid core group that we can move forward on, Jeff Burkhead, senior vice president and general manager of the chain, told SN in an interview last week. All but 16 of those

Birmingham, Ala. — Its formative years have been full of challenge, but Southern Family Markets is now hoping to piggyback its way to success.

“We started out with 88 stores and now we're down to 42. But this is what we consider a solid core group that we can move forward on,” Jeff Burkhead, senior vice president and general manager of the chain, told SN in an interview last week.

All but 16 of those locations have or will be converted to the Piggly Wiggly banner, said Burkhead, who took over Southern Family Markets earlier this year after Bill White retired. The remaining stores — those with a competing Piggly Wiggly operator in the area — will relaunch under the Southern Family name, Burkhead said.

Southern Family was created in 2005 as C&S Wholesale Grocers took on a number of so-called non-core assets from Bi-Lo and Bruno's as that chain outsourced its distribution to C&S. The stores generally ranked third or below in market share in their trade areas, and many had not received capital investment in years.

Initial efforts to rebrand those stores to the Southern Family name took attention away from their already precarious day-to-day operations, resulting in several rounds of store closures.

“You have to keep in mind, we were six banners two years ago. Our stores were made up of Bruno's, FoodWorld, FoodMax, Food Fair, Bi-Lo and Winn-Dixie. We spent our first year taking stores on, converting them and getting them up. We were losing a substantial amount of money,” Burkhead said. “Finally, the company was not surviving, and that was when we elected to go through a rationalization process to get to a core group of stores we could go forward with. So we spent the next year you might say basically divesting and closing stores.

“There's no question that when you're bringing stores up and bringing stores down, it takes a lot of focus off running the core business,” he added.

As C&S initially took possession of the stores from Bi-Lo/Bruno's, it chose to rebrand a group of 10 stores in Georgia under the Piggly Wiggly banner. These stores were selected, Burkhead explained, because they had at one point in their histories operated under that name. C&S acquired the rights to the Piggly Wiggly trade name as a result of its deal to purchase Fleming Cos.' assets a few years earlier.

Although some of those stores have since closed, C&S noted the name had better resonance with area shoppers than Southern Family, Burkhead said. It was decided that the Piggly Wiggly name would go onto all existing stores except those in areas with an existing Piggly Wiggly operator.

Along with the new name come new pricing and marketing strategies, Burkhead said. Although an “extreme high-low” operator at the beginning, the stores today feature EDLP in Center Store and emphasize service and quality in perimeter departments.

“We made a lot of mistakes at the start in our go-to-market strategy and also in our pricing,” Burkhead said. “Our go-to-market strategy in Center Store will be everyday low price through what we call Power Buys and 10-for-10s. Our perimeters will stand for high quality, freshness and a new service initiative to become the friendliest place to shop in the market.”

Burkhead has seen a number of permutations in the Southern Family chain. He began his career in his native Tennessee with Seessel's Markets, a high-end chain based in Memphis acquired by Bruno's in 1997. When Bruno's was bought by Ahold, he worked to facilitate exchange of best practices and later became a regional vice president with Bruno's. He stayed in Birmingham when C&S took over.

Burkhead said the company would look for additional stores if they become available, but for the moment is focused on rebuilding the chain.

“Our No. 1 goal is to stabilize the stores we operate, and we still have some work to do there. We are not where we want to be yet,” he said. “It will be a slow walk as we convert the stores to Piggly Wiggly, and then we will relaunch the Southern Family name once that's over. I don't have an exact timetable when I'll be able to stand in front of the buildings and shout, ‘We made it.’ But every day is a step forward.”