Local Observers Analyze Publix's Move Into N.C.

Expansion 'Made Sense' for Publix

Maria Brous, a spokeswoman for Publix, told SN last week that the company is actively looking for additional sites in the Charlotte market but said the company would not identify specific locations until it signed leases. She said Publix would establish a separate division in Charlotte to manage stores in the area, but had no current plans to build a distribution center there. Publix currently has divisions in Miami, Lakeland and Jacksonville, Fla., and in Atlanta.

“We’ve long been asked by our customers and associates when we’d be coming to North Carolina,” Brous said. “We are in a good financial position to continue our growth, and so when an opportunity presented itself, it made sense for us.”

Publix may also have been motivated to expand by Wegmans Food Markets, the Rochester, N.Y.-based grocer which has been expanding south for several years, according to Burt P. Flickinger III, managing partner for Strategic Resource Group, New York.

“As Wegmans moves further South, Publix is moving North as quickly as it can,” Flickinger told SN. He also said Publix could be emboldened by the struggle of Delhaize’s Food Lion chain to improve its results, while drawing on past success against Wal-Mart, which controls more than 19% of the Charlotte statistical area, according to Metro Market Studies.

“Publix sees market share in Charlotte being more vulnerable over the next few years than it was over the previous five to 10 years,” Flickinger said. “Publix and Harris Teeter will be a battle, but as Publix demonstrated in Florida, it can take share from Winn-Dixie and Wal-Mart as well. For its market share to grow, Publix will have to take share from everyone.”

Read more: Publix Profits Squeezed in Q2

Harris Teeter entered Atlanta in 1993 and grew to 15 stores there before selling the units to Kroger in July of 2001. Officials at the time said the company faced “demographic and geographic” hurdles preventing the stores from turning the kind of profits it sought. One analyst said Harris Teeter, despite operating attractive new stores in the market was “simply outgunned” by Kroger by Publix there.

Harris Teeter since directed growth North, and today operates stores as far North as the Delaware shore and Baltimore. It has also worked diligently to improve its fleet in its hometown, sources there said.

“A lot of what Harris Teeter has done lately is not the rapid store growth they’ve done in the past but a lot more along the lines of renovating their existing stores, and making them larger,” Jenkins said.