Grocery giant Kroger is expanding its empire with the $2.4 billion purchase of upscale neighborhood market retailer Harris Teeter. With the acquisition of 212 Harris Teeter stores in the southeast and mid-Atlantic region, Kroger will expand its presence from 31 states to 34 states and the District of Columbia. Kroger is the second largest retailer in the nation, only Walmart is larger.
In contrast to mega-grocer Kroger, Harris Teeter is a regional market that caters to a more upscale clientele. This acquisition will bring a new customer segment to Kroger’s portfolio – the consumer that wants a more intimate shopping experience and has the money to spend on pricier specialty and fresh food items.
"Harris Teeter has a long track record of creating shareholder value and this merger is the culmination of those efforts over many years. We are excited about becoming part of The Kroger Co., one of the best food retailers in the U.S. while maintaining the Harris Teeter banner, our management teams, our new store growth plan, our distribution and manufacturing facilities in North Carolina as well as our headquarters in Matthews, NC," said Thomas W. Dickson, Harris Teeter CEO. "As part of Kroger, Harris Teeter will be well equipped to continue to provide our customers outstanding quality and customer service as well as excellent value in an increasingly competitive market.”
This is standard operating procedure for Kroger – buyout a local or regional chain but keep the existing name. Kroger owns Fry’s, a regional supermarket chain in my area. The only way that anyone knows it is a Kroger store is because the shelves are stocked with Kroger-branded items.
Although I’m shopping at a Fry’s, the store branded items are Kroger. This makes good business sense, though. Why bother with specialty store brand labels when Kroger can leverage its buying power across all of its brands?
I’m curious, though, if the Harris Teeter stores will feature the Kroger brand in its stores. While I frequent Kroger-owned stores regularly, it’s just your standard run of the mill grocery store. Will Kroger forego their store brand in the Harris Teeter stores to give the chain a more exclusive feel?