Saturday, February 16, 2013

Harris Teetering

Recently, there has been a wild amount of frenzy regarding a potential sale of Matthews-based grocer Harris Teeter.  Speculation is ablaze about what might happen to the regional upscale grocer, which has stores in the Mid Atlantic region and the Southeast.  When The Wall Street Journal reported that Harris Teeter was exploring options for a sale and the chain consulted with J.P. Morgan financial advisors, other chain grocery store names such as Kroger and Publix were mentioned.  However, it is our thinking that the most likely scenario is that a private equity firm will buy the chain and keep its name and branding as-is, and retain the headquarters just outside of Charlotte. 

If a sale occurred to Kroger, which is the second-largest grocery chain after Walmart, then we would see a return of the mid-market grocer to the Charlotte market, as well as a return to other markets that have experienced Kroger’s absence, like the Washington, D.C.-metro area.  Kroger, however, is the most typical mid-market grocer in America, which a price point that is more on par with Bi-Lo than Harris Teeter.  Kroger only has a handful of stores in North Carolina currently, in Raleigh and Durham, and if a takeover of Harris Teeter were to occur, this would make Kroger one of the most dominant grocery store chains in the state.

With Publix expanding into the Charlotte metro area, one would think that the quickest takeover for Harris Teeter, its most formidable competitor, would give them a stronghold of the market.  We don’t see this happening either though, because Publix grows a little more organically rather than through acquisition.  Publix is planning on opening stores in Charlotte’s Ballantyne and South End communities soon.

Ultimately, much of the speculation is just that, and like we said our prediction is that the customer won’t notice any changes if and when a transaction occurs.  With the store-swap with Lowes Foods last year in the Charlotte area, we think that Harris Teeter has worked hard to keep its core footprint of suburban markets and up and coming urban areas.


teresa bowen said...

I have read the same article as this and it's really interesting. I heard that lots of people are looking for more information in terms of financial planning columbia sc.

Anonymous said...

And sure enough...Kroger today announced the purchase of Harris Teeter.

Napoleon Reese said...

Kroger now has control over Harris Teeter. I doubt Winn-Dixie would come back to NC, since WD owns Bi-Lo and a handful of them are in NC, and with the disasterous Down Down campaign.

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