Standing up to the giants: how small chains battle big stores--and win.

Grocery Headquarters, July, 2003 by John Karolofski

NOBODY ROOTS FOR GOLIATH.

That notion may provide some comfort for small chains competing against imposing supercenters and warehouse clubs. But more than comfort is needed these days. After all, conventional thinking says the Davids of the grocery industry lack the scale and resources of the top 10 chains to battle the likes of Wal-Mart, Costco, Target and others.

"Supercenters have certainly changed the entire competitive environment in our market, as they have across the country," says Steve Smith, president and CEO of K-VA-T Food Stores, the Abingdon, Va.-based operator of Food City supermarkets.

That may be an understatement, considering how these huge grocery/discount combo stores have traumatized the conventional supermarket industry during...