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Harris Teeter Fortifies Its Base

MATTHEWS, N.C. — Harris Teeter Supermarkets is bolstering its presence in its headquarters market of Charlotte — possibly as a defense against the encroaching footprint of Southeast powerhouse Publix Super Markets, according to one analyst.

The store swap the company unveiled this month with Lowes Foods — in which Harris Teeter picked up 10 Lowes stores in Charlotte and central North Carolina — promises to strengthen Harris Teeter’s No. 1 share in the market.

“In addition to bolstering its market share around Charlotte, this move also blocks Publix, which plans to open two units in northern South Carolina near Charlotte, from entering Charlotte via a strategic deal, at least in the near term,” said Andrew Wolf, a Richmond, Va.-based analyst with BB&T Capital Markets, in a report.

2012 SN Top 75: Harris Teeter Is Rated No. 34

Lakeland, Fla.-based Publix confirmed to SN earlier this year that it plans to open stores in the South Carolina towns of Indian Land and Tega Cay, both considered suburbs of Charlotte. Local reports said the stores could open later this year.

2012 SN Top 75: Publix Super Markets Ranks No. 8

Harris Teeter said three of the acquired stores will be converted to a new format focusing on beer, wine and specialty foods.

“This transaction aligns with our strategic plans to replace rural store locations with more urban locations with higher density of our target demographic groups,” said Thomas W. Dickson, chairman and chief executive officer, Harris Teeter. “It provides us with the opportunity to explore in selected locations an innovative format that we think our customers will find exciting.”

Harris Teeter had already been planning a 3.9% increase in square footage in 2012, including six new stores (two of which are replacement stores).

2012 SN Top 75: Alex Lee Inc. (Lowes Foods) Is No. 43

For Lowes, the deal virtually eliminates its presence in the Charlotte market, but boosts its store count in rural western North Carolina, where it is picking up six Harris Teeter locations.

According to the most recent data from Metro Market Studies, Tucson, Ariz., Harris Teeter captures about 22.7% of the market share in Charlotte, just ahead of the No. 2 player, Delhaize’s Food Lion banner, which captures about 21.6%. Lowes is No. 8 with 3.2% of the Charlotte market.

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