LFPINC and marketing 101

Ralph Ketner had a plan. He wanted to be someone important in the grocery business. From his first store right next to Catawba College, he launched his grocery empire in 1957. His grocery store was named Food Town. (Ralph Ketner died in 2016 – he was still alive when I was house hunting in Salisbury in 2013).

A friend of my parents really liked Food Town, rather than Winn-Dixie or Harris Teeter. The reason, according to her, was they accepted coupons for everything, whether you bought the product or not. Food Town grew rapidly.

Speeding the growth was that the store gave out free bumper stickers that merely said LFPINC. People would literally wave you over and want to know what that strange thing meant on your bumper sticker. Was it some sort of secret society? Was it some sort of a political message? No, it merely stood for Lowest Food Prices in North Carolina

Mr. Ketner had a partner named Wilson Smith. In 1974, in order to speed up the growth of the business, they were acquired by Ahold, a European based grocery. Ralph continued as the president and public face of Foodtown.

Ralph Ketner had a very close relationship with Catawba College – the Business School is named after him.

I interviewed with Food Town in 1976. At the time, they were doing something that was way ahead of its time. Mr Ketner was fanatical about numbers and efficiency. Food Town acquired barcode readers and had a process of reordering items that were running low by scanning the barcode and downloading the information to an IBM mainframe, back when modems were entirely controlled by AT&T. The only way around that was to use a device called an acoustic coupler, which would transmit the modem sounds over the analog phone lines.

Barcode readers at the register did not yet exist, but Food Town used the sales data to calculate what was the correct amount of space to use for an item, and at what point should it be reordered. This made them very efficient. They were not using the model of renting shelf space to food companies, which could wind up with high margin products that nobody actually wanted to buy. This is basically the same idea that made Walmart so successful.

But This desire to expand ran into a couple problems of not thinking far enough ahead. Foodtown did not own a trademark beyond the state of North Carolina, which meant any attempt to expand into Virginia would run into immediate lawsuits.

So Foodtown ran a contest for its employees to come up with a better name. The signs on their stores were made up of eight letters each in a square block with a single letter. [F][O][O][D] * [T][O][W][N]. The main priority was that the new name needed to not require new signs, and reuse as many of the existing letters as possible. Thus Food Lion was born. The old slogan no longer worked – I remember them temporarily trying to expand it to LFPINC/VA/SC

Spin forward a year and I’m actively interviewing for a job. I get sent to one of the strangest interviews I ever had, but it was through an agency so it was legit. I drove halfway across North Carolina and met a gentleman who worked for Donnelly marketing, the people that used to send out big thick packets of coupons under the name Valpak.

We talked in his car, without ever going to an office. He really enjoyed his job, part of which was detecting coupon fraud. He explained that the coupon business was much more complicated than I would think.

Among other things, they would send out coupons for fictitious products that did not exist, and wait for grocery chains to submit them for reimbursement, then explain how it was they sold a product that did not exist.

A slightly more benign use was to test market a product without actually creating it. Maybe you would put out a coupon for a new variety of Pop-Tarts. If the idea had any merit, the shoppers would go to the grocery store manager and want to know why they were not yet carrying the watermelon flavor Pop-Tarts. That would then filter back to the company that was deciding whether or not they should invest in creating and marketing a new product.

Today, my YouTube trucker buddy Steve, is delivering a trailer full of something from Atlanta to the Food Lion distribution center near Petersburg Virginia, literally in the middle of nowhere in between i-85 and i-95. He is not allowed to say who he works for or who the customers are, but it is very obvious in this case.

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5 Responses to LFPINC and marketing 101

  1. RebelSansClue says:

    I still remember that report that showed the employees cleaning meat with bleach or something. Hurt the brand for years. I see that they're private now. Weren't they publicly traded at one point?

    • Fred Stiening says:

      What they were doing was not entirely unreasonable at the time, as a union was trying to organize them. The employee was one of their agents, so the fact that she might have done things that were inappropriate might have just been part of the pressure on them.

      What they were doing was taking chickens that were for retail sale, and in their deli where they made fried Chicken, they would take the oldest chickens out of the retail display to cook. In between, they would hold them in containers filled with ice.

      The entire "best if used by" date, "expiration date", etc does not mean the food is spoiled or unfit to eat, just that it's not as good as it used to be. Because buyers tend to look at the expiration date and pick the freshest one, it can create a rotation problem where nobody wants to buy the oldest chicken.

      That being said, Ralph Ketner was infamous for his cost-cutting techniques.


      That archive has no formatting or graphics, but I learned a lot.

      When I was house hunting in 2013 I looked at a condo in Salisbury that was basically an apartment inside what had been a mansion or something. Ralph Ketner was apparently involved in the ownership. Being a graduate of Catawba College probably would have made it easier for me to buy the place, but frankly I did not feel comfortable. It would have meant rich people watching this guy in his Walmart t-shirts walk up and down the hall. I didn't think they would be comfortable and I didn't want to start wearing suits just to walk to my car.

    • Fred Stiening says:

      In 1974, Ahold from Belgium or the netherlands bought a majority stake in Food Town. As is fairly common, two classes of stock were created with different voting rights.

      Ahold had their hands in lots of things. They created grocery delivery service Peapod, and operated/owned Giant and Stop&Shop.

      In 2000, Ahold made a tender offer to buy US Food Service, but there was government pressure to force Ahold out apart when accounting irregularities were found. The Ahold equity was bought up by the usual suspects. Some of this I knew from working at US Foods in 2012.

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