Bob Slone, the chairman and CEO of Foodtown Supermarkets of Kentucky, Inc., bought his first grocery store on Pyke Road/South Broadway in Lexington in 1960. Since then, Slone has watched his business expand into 12 units (now named Slone’s Signature Markets and Big Valu Foods), located throughout Central and Eastern Kentucky.

Slone is a graduate of Henry Clay High School in Lexington and the University of Kentucky, where he earned a B.S. in Business Management in 1959. Slone was the chairman of the Kentucky Retail Grocers Association from 1979-81 and was named Kentucky Grocer of the Year in 1981. Currently, he is the chairman of Kentucky Technologies, Inc. (a University of Kentucky research outreach program).

Slone was the chairman of the Governor’s Scholar’s Program Board for two years and served on the board from 1984-1999. He served on the Fayette County School Board from 1991-95 and sits on the University of Kentucky Business School Advisory Board. Slone’s wife, Mary Ellen Slone, is the CEO of Lexington-based Meridian Communications.

How many grocery stores are in the Foodtown chain and how would you describe Slone’s Signature market?

There are a total of 12 stores. Seven operate as Slone’s Signature Market and five as BigValu. BigValu is a discount concept and offers items at the lowest cost possible. The customers that shop these stores are interested in price. With the Slone’s Signature concept, the produce and deli departments have been significantly expanded. The home meal replacement category offers a large selection of upscale entrees that you can take home and have on your table in a short period of time. The specialty food category in Slone’s Market probably offers the largest variety in this area. We’ve also increased the level of service so our customers can get in and out of the store as quickly as possible. At all of our stores, we like our associates to be friendly and to interact with our customers. We try to make shopping for groceries a pleasant experience.

You have been in the grocery business for 40 years. What are the most significant changes that have occurred over this period of time?

There have been a lot of changes; I’d say that the number of items carried in a store is the major one. When I first started in business, the average supermarket had four or five thousand. Today, the average grocery store will have 30 to 40 thousand stock-keeping units. The number of items available has mushroomed unbelievably.

Another is increased competition; there are so many new formats today. When I started in business, you went to a neighborhood grocery store to buy your food. The formats of today range from the supercenter concepts to service stations with a convenience store. And the amount of food being carried by drug stores has also increased. Today, there are all types of retail formats carrying food products that 40 years ago you found exclusively in a grocery store.

How did you get started in the grocery business?

When I graduated from college I bought a small store, smaller than a convenience store, on South Broadway at Pyke Road here in Lexington. After eight years there, I sold it and was able to purchase a chain store that was going out of business on Southland Drive in Lexington. That was my first larger store. That was in 1968 and that store became extremely successful.

At one time, it was the highest volume grocery store in the state of Kentucky. Because of its success, we have been able over the years to acquire and add the other stores.

In Central Kentucky, Kroger has around 60 percent of the grocery sales. Meijer is adding two or three stores in Lexington and Wal-Mart Superstores are expanding in Lexington and regionally. How has additional competition from these national chains affected your sales and profitability?

Obviously, national chains have affected our business greatly. If Meijer opens three new stores -- (Georgetown Road, Reynolds Road and Hamburg Pavilion) -- and Wal-Mart opens a second supercenter in North Park we’re facing a lot of new competition.

If Meijer and Wal-Mart build all these superstores, they will require 40 to 50 percent of all the grocery business presently being done in Fayette County to be successful. That means they to have to take half the business away from existing grocery store competition. The other thing -- speaking of competition -- is the number of restaurants in Lexington. Lexington has one of the highest percentages of people eating out of any city in the United States. If you just look around, the number of new restaurants that has opened in Lexington during the last couple of years is far greater than the increase in population.

With both spouses in many families working, the amount of food prepared at home has declined. How are grocers countering the "eat out" or "carry home prepared food" trends?

Part of the Slone’s Signature concept is to expand the deli and to offer more take-home food. Our customers can have a restaurant quality meal on the table within minutes after they get it home. There are a lot of people who prefer to eat at home rather than having to go out to a restaurant.

Over the last decade, you have changed the name of your grocery store from Foodtown to BigValu to Slone’s Signature Market and invested heavily in signing, remodeling and marketing in order to create a new chain image. What has been your strategy and how well has it worked?

Back when we changed from Foodtown, it was your "old neighborhood grocery store" and we ran them all the same. If you’ll think back a decade ago, everybody was extremely price conscious. People would be very quick to tell you how much they saved when they bought something. Whether they were talking about clothing, food, a car, or whatever, people were very much into saving money and getting a good deal.

The economy over the last decade has been good to most everyone and so people are not pinching pennies like they did 10 years ago. Today they want convenience.

When they want it, they want it very quickly. The highest percentage ever of women are working; both people in the household are working. They’ve got more money and less time. Yes, they still want good value, but they are not as penny pinching as they were a decade ago. Time is money.

Your wife, Mary Ellen Slone, is the owner of Meridian Communications -- Lexington’s largest advertising agency. How has your wife contributed to your chain’s success against major competitors?

During development of the Slone’s Signature concept, for instance, I was dealing with a large company who creates interior design for supermarkets. They had made three or four presentations, none of which was exactly what I was looking for -- something upscale, but not expensive, not gaudy. They weren’t quite hitting the mark, so one evening Mary Ellen said, "Why don’t you let Meridian’s art department take a stab at it?" We did and Meridian came up with Slone’s Signature Market. I don’t think you will see any thing like it anywhere else. It is very crisp and gives us a good clean upscale look. From a strategy point of view, Meridian has done all of our advertising for a number years, including focus groups to determine who our customers are, who our customers should be and how to approach different customers. In a nutshell, Meridian is extremely involved in what Slone’s Signature Markets is doing.

What are your customers telling you about the grocery business?

Basically, they want to get in and get out very quickly. They want specific brands. They used to come and say "I want a bottle of salad dressing." Now, they want a specific brand. Slone’s probably carries 40 or 50 different brands of salad dressing. I counted the other day and we had 70 different brands of mustards.

What unique selling proposition has Slone’s Signature market used to counter its competition?

Slone’s is definitely trying to appeal to local people and to be perceived as a "hometown business." When I started in Lexington, there were 40 or 50 independent grocers; today, Slone’s is the only one left. There are people out there that like to trade with a local merchant.

A number of grocery chains have shopping on the Internet. What, in your opinion, is the future of this service?

It is going to be extremely tough for traditional groceries to be purchased over the Internet, especially when you deal in perishables. It is awfully hard to pick out a steak or tomato for another person. Most things purchased on the Internet are being delivered through a courier or mail service. I do see things such as specialty and hard-to-find items being sold on the Internet. In very large cities with dense populations, customers may use the Internet to turn the order in and then the grocer could deliver it. But not anytime soon in Lexington.

Most of the national chains are offering generic and store brand products. How does private branding affect the quality of the product and is the customer really saving money?

There are two categories -- generic and private label -- which most stores carry. A generic is normally the cheapest product that can be purchased and is usually under a "no name" label. Virtually all grocery organizations have their own brand whether it is Kroger, Winn Dixie or Slone’s. Our store brand is called Our Family. The specs are equal to or better than those of the national brand, and the product will sell everyday for at least 15 percent less. Store brands definitely have a place and give the consumer savings.

One of the big questions owners ask is, who will manage the business when they are ready to stop working? What transition plan do you have in place for your business?

I don’t ever see myself totally stopping. I would like to slow down a little bit. I have a son-in-law who came into the company a little over three years ago and it’s my hope that sometime in the not-too-distant future that he’ll be in a position to assume a much larger management role. He has done an extremely good job, and I think that plan will come to pass.

New demographic data indicate that population growth in Fayette County is slowing and people are moving to surrounding counties. How will this trend affect Lexington’s growth?

Lexington’s growth potential is limited to being either a retail or distribution center. Those are probably our only two options. Lexington lost out on being a corporate headquarters center when the decision was made several years ago not to expand the airport. Northern Kentucky has grown by leaps and bounds basically because of its outstanding air transportation. I don’t see an expansion for Bluegrass Airport. Large companies are not going to move to Central Kentucky without good air service.

If Lexington is going to grow, it’s got to be a retail center and I think that’s happening. Customers living in surrounding counties will still come to Lexington to shop.

How will slower population growth affect your business?

The size groceries we operate depend on the people that are close by. The larger stores and the supercenters can draw from up to a 50-mile radius. We’re still basically neighborhood grocery stores and our customer base has to come from the surrounding neighborhoods.

Lexington/Fayette County has resisted growth in several areas -- zoning, airport expansion, new roads, for example. Do you feel Lexington has a leadership responsibility to Central and Eastern Kentucky when it comes to air transportation, business service and roadways?

Definitely. The Greater Lexington Chamber of Commerce and several organizations have tried to promote regional cooperation, none of which seems to have been particularly successful. For this region to grow, it needs to have leadership that can encompass the entire Central Kentucky area. As you know, land costs in Fayette County are too high for most manufacturing plants. If a prospect comes to Lexington for a manufacturing plant, it needs to go to one of the outlying counties that have the land and the infrastructure. Fayette County can be the retail, transportation, business and entertainment center. At one time Lexington hoped to get corporate headquarters, but without airport growth, I don’t think we will see that.

What is your reaction to the announcement that Amazon.com’s distribution center and Lexmark’s research and engineering facility would be developed in Lexington?

Amazon is in the distribution business and that is the reason they are coming here. Lexington is an ideal location for companies needing efficient deliveries nationwide. As far as economic development, technology is something that I had not mentioned.

In the next couple years, you are going to see Coldstream (the University of Kentucky’s research campus) grow at an unbelievably high rate. There are several companies that are ready to commit and there are several others with ongoing negotiations. Lexmark’s R & D facility will help promote technology companies at Coldstream and it’s a big boost to the local economy.

As a former board member, what are your thoughts about developments in the Fayette County School Board?

The school system is probably one of the most controversial areas in any community. Someone I was talking to recently made the comment that "People running for the school board in Eastern Kentucky normally ran on a platform that they were for this person to be superintendent or that person to be superintendent." Superintendents are hired or ousted based on who got elected in a given year. Fortunately, in Fayette County, we have not had that experience. But, it is a very unsettled time in education. The high school shootings around the country have made the job even harder. People cannot believe what a pressurized situation school administrators have to go through to perform their functions today.

Dr. Flynn (Fayette County’s outgoing superintendent) has some positive attributes and others that could probably be stronger. I have always thought of him as a good manager, but probably he needed to have a stronger personality when it came to leadership.

How important is education in Kentucky?

Nothing is more important than education for Kentucky’s or an individual’s future. We’ve taken a lot of very positive steps in Kentucky, but we are certainly a long way from having an educational system that will give our young people the skills that they are going to need.

Our school-to-work program is something that is growing and is going to be very, very good. We need to get away from thinking everybody has to have a college education. The jobs that go most wanting right now are carpenters, electricians and plumbers. These are all excellent paying jobs, most of which do not require a college education but require some kind of on-the-job training. We need the same acceptance for someone who is a carpenter, electrician, or plumber just as we do for somebody that has a liberal arts degree.

How difficult is it recruiting workers for your business?

Recruiting the people to work in our stores becomes tougher everyday. The entry-level jobs that we have in our business require the same people that fast food restaurants are trying to hire.

It is really disturbing today that there is virtually no such thing as "notice" anymore. People just don’t show up at work and that makes it extremely tough. There is a shortage of people in the workforce at the entry level. As far as management positions, we’ve had good success with young people who have worked for us while they were in college then staying on after college and going on into management.

What will be the most important factor affecting Central Kentucky in the new millennium?

If Central Kentucky and Lexington are going to grow -- and a lot of people don’t care if we grow or not -- we’ve got to have regional cooperation. There are a lot of advantages to be gained if we could merge governments or services regionally. Why not have garbage collection, police and fire protection for all of Central Kentucky? There is no reason to draw lines; significant savings could be generated by consolidating services. The cost savings would allow us to improve the quality of life for Central Kentucky and lower taxes for our citizens.

Ed G. Lane is chief executive of Lane Consultants, Inc. and publisher of The Lane Report.