This week on the podcast to wrap up the CEO Series, Matt sits down with Kim Eskew, Chairman & CEO of Harps Food Stores. Kim has been with Harps for 46 years, working his way up from an entry level position as a cashier and stocker to CEO. During the episode they discuss Kim’s journey through the company and how the grocery landscape has shifted over the years, especially in Northwest Arkansas. They also touch on how Kim made the transition from in-store management to corporate marketing and how the company transitioned from a family owned business to employee owned and what that means for employees at Harps.

Because the anticipation is we keep growing,

we keep being successful. The value of that ESOP is going to

continue to go up, and all of those folks know they're going

to benefit from it.

Excellence, professionalism, innovation, and

collegiality. These are the values the Sam M. Walton College

of Business explores in education, business and the

lives of people we meet every day, I'm Matt Waller, Dean of

the Walton College and welcome to the Be Epic podcast. For the

next few episodes, I will share conversations with top CEOs

about the future of the workplace. The pandemic has

transformed the way that we work, and we discuss their

predictions for the future. I have with me today, Kim Eskew,

who is chairman and CEO at Harps Foods, Inc. He has been with

Harps for 46 years. He started in an entry level position and

worked his way up and we're going to talk to him about that.

He graduated from the University here in 1980. And he is from a

small town in Northeast Arkansas. Kim, thank you for

joining me today. I appreciate it.

Well, I'm happy to be with you.

Well, Kim, your your story is really

interesting. You came from a very small town in Northeast

Arkansas. As you said, 280 miles from here, hard miles. And you

needed to work to be able to go to school. And you started while

you were in school, working for a local grocery store. Would you

mind telling us a little bit about that?

I think first of all, I majored in civil engineering

because when I was trying to just decide, well, what do I

want to do when I grow up? And you know, when you're in high

school, I think some people have a much better idea than others

on on what kind of career to pursue. And and I'm really

struggling with that, frankly, and and you take some aptitude

tests and some things to try to help you determine well, what

are my strengths? And and I was really strong and in math and

science. And so it kind of steered me toward engineering.

Now, I didn't know very much about engineering. But I decided

well, that's what I'm going to major in because, you know, a

lot of things the potential and career opportunities in that

field. I thought were really good. So I entered the

University of Arkansas majoring in engineering, but I had to get

a job. And I had been working at a grocery store in my hometown

of Piggott. And so I had some experience and saw that Harps

Food Stores had positions open and I interviewed with them. And

they they hired me and I started to work.

So what were some of your early jobs at Harps?

I was a student and as a student, they called me a

checker stocker, but you know, I cleaned bathrooms, mopped,

floors, carried out groceries, did basically anything and

everything at the store, nearly everyone was my boss. Because,

you know, I was at the very lowest level, as far as the

employees in the grocery store.

What a great place to start where you are seeing

the details of how things operate and you learn how to

deal with people. And you you deal with all kinds of people in

those kinds of jobs. Was coming from a small town, Piggott, I'm

sure you got exposed to things you had never been exposed to

before working at Harps.

Well at the time I left Piggott, I think our

population was just under 3000 people. I graduated in a class

of 73. And coming to Northwest Arkansas even then seemed like

oh this is a big place. And you know, you go back to 1977,

Northwest Arkansas was a lot smaller than it is today.

Springdale I want to say had maybe 16,000 people something

like that and I guess we're close to 90,000 today so it

didn't look nearly as large as it does today. But it looked

really big to me and and I had worked in a supermarket that was

about 6,000 square feet in Piggott, and the one I worked at

in Springdale was 25,000 square feet. So it it was four times

the size and was much busier. And so it was vastly different.

But the basics, you know, where the saying, my nature has been

pretty much to enjoy every job I've ever done, it seems like

there's been an occasional boss that I didn't enjoy. But for the

most part, I've always enjoyed working, and I enjoyed working

for Harps and, and that's the thing that really caused me to

begin to consider it as a possible career.

That experience that you had early on and

enjoying your work is so critical, because if you enjoy

your work, you actually do better at it than if you don't

enjoy it. But I also think to your point, you've had good bad

bosses and bad bosses we all have if we've worked for a

while. And the good thing about having bad bosses is you can

learn from them, what not to do. You know, so tell me, then once

you graduated, what did you start doing at Harps?

I just started filling a role as an assistant

manager at our store here in Springdale at that time, but was

angling to be the number two person in a store for us, we

call the grocery manager, and that person is responsible for

all of what we consider the grocery department to be in the

store, which is everything excluding like meat, produce,

and bakery deli. So all of the center store, it falls under the

responsibility to grocery manager, and I was looking to

get promoted to that position. And shortly after I graduated,

that did happen and, and I got promoted to the position of

grocery manager in our store in Mountain Home, Arkansas, which

was one of our busiest stores, you know, at that time. So so

that was a great opportunity for me.

So being grocery manager in your number one

store, that must have been a vote of confidence early on that

you were performing well.

I think it was. And you know, and it was really

challenging. I tell our folks back then this was, this was pre

Walmart, in the grocery world. And so the sales that we were

doing in those days, if you translated it into today's

dollars was much greater than a typical grocery store will do

today. And in terms of sales per square foot. So the the amount

of groceries that we checked out and processed through that

store, for the most part is much greater than we do through a

store today. But it was, I think, a vote of confidence. I

haven't made any money in my life at all at that time. And

so, so it seemed like and when I when I decided to become a go

into the grocery business. You know, I come from a I would say,

a desperately poor family, my dad, for most of my dad's life,

worked two jobs. And I can really say he worked three jobs.

But he worked. He worked at a at a shoe factory in Piggott called

the brown shoe company. And then he also worked for a nursery in

Piggott called the Piggott nursery. And he would go there

after he got off work at the factory and work till dark. And

and then he also was the custodian in our church. And

even having done all that we were still really poor. So when

when I looked at at what I anticipated that you could make

as a store manager for Harps, that was four times more money

than my dad had ever made working three jobs. Some folks

might have looked at that said, well, that's not paying that

great. I looked at it and thought, I don't know what I'm

going to do with all this money.

That is great. So how long did you stay at that

store? In Mountain Home? Was it?

Yeah, Mountain Home Arkansas, stayed there for two

years. And then we purchased there were there were two Kroger

stores in Fort Smith. And we bought those two Kroger stores.

And I got chosen to be one of the managers in one of those

locations.

What year would that have been? Roughly?

That was 1982.

82. So but you had had some experience while you

were working while you were going to school, and then after

school with Harps. So did you see a lot of differences in how

they operated, how they merchandise product, et cetera,

et cetera at the Kroger store you took over?

No, I didn't see a lot of differences that, you

know, the stores in those days were not nearly as elaborate as

they are today. I mean, they were basic stores with

generally, you know, you had center store, and then you had a

meat department, a produce department and a bakery deli.

And virtually everybody had the same departments. And Kroger was

was very similar to that.

Was turnover like it is today? Or was it lower

back then?

It was much lower back then. And, you know, if you

looked at an application then and that person had taken a

different job every two or three years, you would have thought

I'm not going to hire that person, they're not going to be

around very long. Today, it seems that changing jobs every

two or three years that that person, well, gosh, they hang

around for a long time, it is a radical difference today. In

those days, that was a real negative, if you change jobs

every two or three years.

All of a sudden, being in charge of the entire

store. Were there any surprises for you, or challenges in

running the store?

There were always surprises, probably the biggest

surprise to me was the amount of theft both from customers and

from employees, you know, in, in our business, it's really the

employees that typically will get gets you for the most money.

You know, the shoplifting that takes place is significant. But

it's usually a small amounts at a time. If you get employees

stealing from you, they can get you for big, big dollars. And,

and it's much more difficult often to detect them.

Yeah, shrink is a big problem.

It's a huge problem.

Was it, is it bigger today than it was then?

Or is it about the same?

I believe it's larger today. You know, it's, we try

we're on retail accounting in our stores. And so we tried to

account in definable quantities, what our shrink is in many

different areas, so that we know what that is and so the, the

when we inventory our stores, and we do about three

inventories a year in a store, you know, that helps us to zero

in on the unknown loss that's taking place and sometimes can

alert us to some real problems that we have in the store, if

that is, is continual. If we do a couple of inventories, and

they continue to show a lot of shrink, then we know we have

some sort of theft issue.

How long did you manage that store?

In total, I was there for four years.

And what what did you do after that? What was your

next step?

In mountain home we purchased, Walmart, moved out of

their old store in Mountain Home and built a new store. And we

were on the parking lot at that time of the Walmart. So we're

back in those days, it was a good thing to marry a grocery

store with a Walmart. And of course, Sam Walton later

thought, well, that would be a good thing to have under the

same roof. But we purchased that building and actually moved our

our business then into the old Walmart store. And, and then I

became the manager of that location, which at the time was

it was our largest store. That store was 63,000 square feet.

And we had around 200 employees in that store. And it was it was

our best store.

And how long did you run that store?

For about four years.

And what was your next move after that?

I became a district manager. We were family owned at

the time and we had just purchased five additional stores

in Oklahoma. And Gerald Harp, who was vice president of

operations and one of the owners of the company decided that he

couldn't cover all of the stores himself. And so he decided to

have a couple of district managers to help with store

supervision.

And how long did you do that?

for four years

Moving from managing a store to managing the

district, was that a big jump for you? Or was that not a

problem?

It was a jump in that when I managed the store at the

at the end of the day, you kind of could go home and know that,

hey, everything's good. Or if you had problems, you knew where

the problems were, if you had a personnel issue, you knew where

the personnel issue was, if you're trying to do that, for

12, or 14, or 16, stores, you never go home thinking, I know

how everything is going everywhere. I don't know where

my problems are for certain. And there's never a day when you go

home, and everything is just exactly the way it should be.

You feel a little lack of control, when you have multiple

locations that you're trying to supervise.

And was it hard to, you know, manage the managers?

In other words, were you spending a lot of time mentoring

them, training them?

I was. And, you know, the biggest thing is, is for

folks to kind of accept responsibility and

accountability for what we've entrusted them with. And I

always tell folks that when we allow ourselves to make excuses,

then sometimes we're accepting failure. And, and I said, the

trick really is bad things happen, a new competitor comes

to town, you lose your number two person that was great. And

now my job is a lot more different, stuff happens, you

know, and the thing we can't allow ourselves to do is to use

that as an excuse, to not hit our goals to not hit our

budgets, we've got to find a way to be innovative in order to

still be successful, even when bad things happen.

And so what was your next move after that?

From district manager, I became the director

of marketing for Harps. And I, having spent my whole career

really in operations felt like, even by my measurement, that

seems a stretch. And I don't think I don't think I was the

first choice for the job. We we employed a national search firm,

to find talent in order to fill that position. And as I had made

known that I was interested as well, I would see these folks

come in, and they would be interviewed and, and I would

hear well, this guy is doing that job for Winn Dixie or for

this, and I would think, oh, man, they're a lot better choice

than I am. And so I kind of had low hope that I would be chosen

for the position. And I really think I ended up getting the

position after another person had turned it down. Maybe they

couldn't come to terms. But no matter how I got the position, I

thought, well, now it's up to me what I do with it. And then it's

one of those feelings you get, you're really happy that you got

the job. And now you're thinking, how in the world am I

going to do this job?

That is a big change from operations in many,

many ways. What did marketing entail?

It was, I was responsible for advertising,

which was which was largely newspaper and a little bit of

television. And, and some radio. I was also responsible for

merchandising, which has to do with how every store is set up,

the position of every item on the shelf, really everything the

customer comes in contact with when they walk into the store,

product wise, I was responsible for.

So you were over really marketing and

merchandising.

Yes,

right.

Yes.

Okay. That that's a lot of responsibility. Did you

feel like your experience in operations informed a lot of

your decision making and planning and strategy?

It did. And, you know, when you're a store

manager, you think you know a lot more than you know, but you

look at it from a certain perspective. And then when

you're the guy making the decision, you know, it's easy

for the store manager to be critical of the ads, to be

critical of the pricing to even be pretty critical of product

selection. And then suddenly, you're the person that's, that's

making those decisions. And you see, it's not always as clear

cut as maybe the store manager thinks it is. And I was blessed

that, you know, we had an advertising manager who had had

that job for probably 25 years or more at that time. And we had

a gentleman that was responsible for the grocery pricing and

merchandising that had had that job for a very long time. And so

now you got this hotshot college kid that comes in. And and these

were all guys that had grown up in the business, but had not

been to college. And now you have this young guy that comes

in, and I just told them, I said, look, I'm gonna have to

learn this from you guys, as we go along. So bear with me. And

they really carried me early on in that job.

So, boy, it's so important to have mentors, isn't

it?

Yes.

So let me guess, you stayed in that job for four

years?

You know, I'm less. I think it was longer than four

years,

I was just guessing.

I moved from director to vice president of marketing.

And I held those positions, man it may have been eight years or

more that I held that position.

And what was the difference in your

responsibility when going from director to Vice President?

Really, there was not a difference. It was just a

title change.

During this time, up until you became vice

president of merchandising and marketing, how much had Harps

grown since you started when you were a student?

You know, in those early years, we hadn't grown a

great deal. You know, most of the growth at that time was

organic, we were building stores, and we didn't have much

turnover in store managers. And and maybe we add a store every

two or three years. You're you really know when that store

comes up, you want to get it because it might be a couple of

years before the next one comes up. So so there was not real

rapid growth during that time.

So after being vice president of merchandising and

marketing, what was your next role?

I became executive vice president in 2001. Gerald

Harp, who was the last surviving family member of the brothers,

there were three brothers there was of the our founder, Harvard

Harp started Harps in 1930, and he had three sons, Don Harp,

Reland Harp, and Gerald Harp. And those sons when Harvard died

in a car accident in 68, you know, the responsibility for the

meaning the CEO fell to his oldest son, Don Harp. And Don,

stayed in that position til 1995. And then he retired and

Gerald Harp then became the the president and CEO. And then in

2001, Gerald decided he was ready to retire and put the

company up for sale. It almost sold to a company called

Houchins industries, which is located in Bowling Green,

Kentucky, but they weren't able to reach a deal. And Houchins

happened to be an employee owned company. And so the possibility

of selling the Harps company to the employees became what was

considered. And that's what Gerald Harp decided to do. And

in 2001, we became an ESOP. And Roger Collins became our new CEO

and Gerald left the company. And Roger promoted me to executive

VP with really, at that time, I was really responsible for

running the company. I was over operations and merchandising and

marketing at that time. And so it was a we no longer were

family owned, so we no longer had a person that we would have

to go to, in order to get the blessing to do whatever we

wanted to do. And now it was it was on us in order to I try to

make the company successful. And if you're familiar with ESOPs,

you know, the nature of that is, you go out, and you have to

borrow a bunch of money in order to buy the family out, which

usually means we had as much debt as we could possibly take

on. So we were very highly leveraged, which just increases

the pressure all the more when you're trying to grow a company

and manage a company. And at the same time, because this happened

in 2001, Walmart is building super centers and neighborhood

markets at a at a pretty rapid pace. So we've got new

competition that's really formidable coming in into our

markets on a pretty regular basis. So so those early years

as an ESOP, were really scary at times.

How from your perspective, over operations,

merchandising, marketing, how did the change in ownership

structure affect you?

Well, I felt like the decisions I made, were really

the decisions that were going to go forward. And I was really

setting the strategy for what we were doing on pricing

advertising and everything there was there was no higher power

that had to agree to it. You know, it was, it was pretty much

now we did have an executive committee, and it was a

collaborative environment. And I was by no means doing this

alone. But it felt like there was really a small group of us

that are resetting the direction of the company.

So what was your next role after that?

Well, a little later. So well, several years later, I

was promoted to President with with really not a responsibility

change. And then in, in 2016, I became CEO.

Was, I suppose with all of your experience, that was

probably a fairly easy transition.

It was, you know, you, I really felt like I was I

was prepared for it. And that was the whole experience I'd had

of coming from the very lowest parts in the grocery store. And

literally nearly doing every job that there is to do really gives

you an intimate knowledge with the business that you're

running. And to me, it makes making decisions much easier.

What has been the value of being an ESOP to your

employees? And also, how much is the value of your firm increased

since since the ESOP?

Well, you know, we didn't know when we became an

ESOP. One, we didn't even know what an ESOP was, I didn't. So

for most of our folks, they heard more we're going to be

That must be gratifying. And you've had a big part in this

employee owned, and they had no idea what that meant. I had no

idea is this going to be a good thing? Or is it going to matter?

And, and the truth is, when we started out, it's almost like

your 401K, you know, people tell you, this is going to be a big

thing. But you start and you're young, and you think I need

every dollar I'm making to survive. So putting 2% or 4%

into a 401k. This doesn't seem like that makes good sense to

me. And, and so you start off and you get your first

allocation, and maybe that first allocation is $500, or

something, and you think, well, I don't know what the big deal

is about that. I would rather just have the $500. But we

started off and our stock was valued at $27.90 a share, and

that was in 2001. And and today, that stock is worth $1,410

share. And and we have employees who have over a million dollars

in their ESOP account. And I like to tell the story, because

sometimes I get asked, well, Kim, what what do you like most

about about your job and and every year I try to visit

personally either with a phone call or in-person with employees

who are retiring and who have worked for us at least 20 years.

And, you know, right now we've been an ESOP for 21 years. So

those employees would have been with us the entire time that

we've been an ESOP. And, and the really cool thing, the thing

that that makes it all seem more significant and more enjoyable

for me is those employees are leaving with about 24 times

their annual pay in their ESOP. So so if that person's making

$20,000 a year, they've got $480,000, in their ESOP, that

we're going to give them and that might just be an I say

this, but it might be a cashier. That's got nearly half a million

dollars in their ESOP, that cost them nothing. And if you're a

the whole way through. But to have a 5,000% increase in 21

manager, that you may have a million dollars or more in your

ESOP and, and we have some people now that have over $2

million in their ESOP, and these are folks who never believed

they would have a million dollars. And, and it's all

because of, of their hard work of their the reason that they

stuck with this job, which is counter culture today that

instead of leaving, and going to another job, you know, they

stayed with this job. And at the end, you know, we're handing

them a check for $500,000 or a million dollars. And that is so

gratifying to me, and it makes it seem like this job has really

mattered. And you're gonna have a much better retirement,

because you chose to stay and work for Harps. And I am

overjoyed to to give them that money.

years in the value of the firm that that's remarkable, very

impressive. Kim, I'm so glad that we had this time to connect

and visit and I really do love the story. And you're, you're a

great role model for people. So thank you. I know you're very

busy. So I appreciate you taking the time and effort to talk to

me about Harps and your career. It's been very interesting.

Well, thank you. I'm happy to do it. And I'm proud of our company

and proud of our people. And happy to share it with the folks

that listen to this.

On behalf of the Sam M. Walton College of

Business, I want to thank everyone for spending time with

us for another engaging conversation. You can subscribe

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