The Tip Sheet: 8/24

by Samuel X. Cicci

When Kroger shut down its store in South Memphis citing losses of more than $2 million, the neighborhood around the Southgate Shopping Center faced a huge problem. In a conversation with Cash Saver owner Rick James, Roshun Austin, executive director of The Works, Inc, examined what the Kroger closure entailed for the 55,000 nearby residents. “We recognized that transportation is an issue in this particular part of the city,” says James. “Many residents have only one car used to get to work, or have no vehicle. They’re relying on public transportation, which seems fine until you walk through that process.”

For residents living within a three-mile radius of the old Kroger location, the nearest nutritional shopping options require a five and a half hour round-trip bus ride — with two transfers. “That customer,” says James, “if they’re not willing to invest that much time to get only what they can carry, go to the corner convenience store. It’s fine, except the nutritional options like fresh produce and fresh meat are limited and somewhat higher-priced than what someone on a low-income basis needs to pay.” That type of area is considered a “food desert,” defined as an area with limited nutritional food options for residents.

James got together with the Southgate landlord, Belz Properties, to find a solution. Over the last few years, Kroger hadn’t given a clear indication of their plans with the property. While somewhat expected, the store closure in February this year still caught many off guard. James had to think hard about whether he wanted to pursue this location. “There’s a certain amount of pause when a national retailer says they’re not making it in a location. To that end, we pulled some research as far as what we thought the store could handle and spent time trying to structure an ongoing lease that was more feasible for us.” During the process, James believed the cost-plus model Cash Saver employs made it a more viable business. Keeping prices at the lowest possible retail point while turning over a high volume of product would allow the new location to succeed while running a tight ship. While opening a new store was a risk, James has experience with these situations. “We operate stores in similar parts of the city, we know the product and the customers real well, and we’re used to operating in that theater. It’s within our scope of business.”

Several elements had to come together, including EDGE, Councilman Edmund Ford Jr. collaborating with The Works, Inc., and Belz Properties’ desire to redevelop Southgate Shopping Mall. James says that one of the vital points is that Belz negotiated for Kroger to leave behind much of their equipment when vacating the store. Without that, James believes that space would have been developed into something else. With everything in order, he decided to take the plunge and sign a new lease on June 20th. “We fast-tracked the process as much as we could,” says James. “It took us about seven weeks to get the store open. I think it’s probably the fastest store I’ve turned around.”

When Cash Saver made its intent official, community interest was enormous, with 1,500 applicants appearing at two job fairs. The store employs 90 people, 77 of whom are new hires at the location. When the store held its official ribbon-cutting ceremony on August 15th, James was delighted with the turnout. “It fills an absolute basic need for the residents of this neighborhood. Their lives just got much easier from a convenience standpoint, and also the options they have in feeding their families just improved at the lowest possible price.”

- The University of Tennessee Health Science Center contributed some $4 billion to the Tennessee economy in Fiscal Year 2017 according to a new study designed to gauge the university’s total economic impact on the state. The 2017 Economic Impact Report was done by Cyril F. Chang, professor of economics at the Fogelman College of Business and Economics at the University of Memphis. The report, the first for UTHSC since 2011, includes the university’s direct and indirect economic contributions to the economy and confirms that UTHSC’s statewide financial impact continues to grow. The report says, “UTHSC contributes substantively to the economic well-being of the communities it serves by creating jobs, stimulating economic activities, and supporting public programs through tax revenues generated directly and indirectly by the economic benefits derived from its presence.”

UTHSC’s approximately $4 billion economic impact was estimated for the report using a model that has been employed by more than 500 universities, government agencies, and nonprofits to estimate the impact of investments and economic activities on their communities. It includes not just the impact or market value of total sales and jobs supported by the main Memphis campus and campuses in Chattanooga, Knoxville, and Nashville, but the affiliate organizations and community-based social service organizations and foundations that affect the people of Tennessee, the inpatient care revenues earned by local hospitals as a result of the services provided by UTHSC’s clinical faculty, as well as federal, state, and local taxes.

Last year, UTHSC and its affiliated organizations supported 32,333 jobs in Tennessee. The main Memphis campus generated about $3 billion or 74 percent of the total economic impact of the university; Knoxville, $668 million or 16.8 percent; Chattanooga $368 million or 9.2 percent; and Nashville $1.8 million. Of the total number of jobs generated, 23,914 were in the Memphis area (74 percent), while 5,420 were in Knoxville (16.8 percent), 2,984 were in Chattanooga (9.2 percent); and 15 were in Nashville.

- New Memphis calls it “Exposure,” a free event at AutoZone Park where you can meet and greet more than 150 local organizations and businesses. It’s an opportunity to sample local food and entertainment and celebrate the city. Performers include the Grizz Drumline, Opera Memphis, and the Beale Street Flippers. Celebrities play a kickball game to close out the event. All are welcome but New Memphis asks that you let them know you’re coming. RSVP here.

- Tom Jones, principal at Smart City Consulting and primary writer and editor of Smart City Memphis blog, is now writing a column for Inside Memphis Business magazine. Jones knows how things run in this city and his observations are key to understanding what’s going on. Read his posting at Smart City Memphis here.

Inside Memphis Business magazine has long been running the Hot Sheet feature of promotions and achievements in local business. We’re now running it in our weekly Tip Sheet email blast to keep the info more current.

- Hope House, which looks to improve the lives of HIV-afflicted citizens in the Memphis area, was selected as one of the organizations to benefit from ServiceMaster’s We Care Day. The aid included new items for the office space, as well as help with streamlining storage and donation spaces.

- IMC Companies, a Memphis-based intermodal logistics business, was recognized with the “Best in Benefits” award at a recent Lipscomb & Pitts event. The award spotlights companies that have the best benefit plans relative to similar businesses.

- Adam King and George Keralis were promoted to managing director positions at Deloitte.

- BankTennessee has hired Dustey Walley as senior vice president and commercial lender.

Inside Memphis Business magazine publishes a list of local Power Players every year. These are the movers and shakers in more than 30 categories who get things done in their respective fields. IMB’s April issue has the complete list. We also publish individual categories in other issues throughout the year, and we feature individual Power Players in our weekly Tip Sheet.

This week’s Power Player: Hampton Holcomb

Financial advisor/investment specialist, Memphis office, Strategic Financial Partners. D.D.S., UTHSC. Company specializes in high net worth individuals and business transition planning. MetLife Securities Masters Level Achievement for eight years. Founding Elder, Fellowship Church. Supporter of Le Bonheur Children’s Hospital. Board member, Agape, Hope Christian Community Foundation, Downline, Young Life Memphis Urban, Northrise University Zambia Africa.

For the complete list of Inside Memphis Business Power Players, go here.

Every year, Inside Memphis Business magazine honors four CEOs who have proven to be exemplary in their fields, leading their companies to success on local, regional, national, and international stages.

Nominations for the 2019 CEO of the Year awards are open. Memphis is graced with tremendously talented, inspiring executives in charge of their companies and organizations, and we want to hear from you about the best in the business. Email your nomination to sparks@insidememphisbusiness.com and include the CEO’s resume and a description of why he or she should get the award: vision, achievements, business philosophy, employee relations, management style, special qualities.

We give out four awards in categories according to the number of employees in the companies: 1-50, 50-200, 200-1,000, and 1,000 and up, so include that information as well. The deadline for CEO of the Year is November 16, 2018. When the nominations are in, an impartial panel will consider the nominees and pick one for each category. Each will be notified and interviewed for the February/March 2019 issue of IMB — and each will appear on the cover of the magazine. A breakfast in late January will honor the four CEOs.