Kroger to pull out of Raleigh-Durham market

Citing an intense competitive environment, The Kroger Co. plans to leave the Raleigh-Durham, N.C., market, a move that will lead to the closing of 14 stores.

The Cincinnati-based supermarket giant said Wednesday that the Kroger Mid-Atlantic division is selling all 14 stores, which are slated to close Aug. 14.

“After a thorough evaluation of the market for a significant time period, we have decided to close our stores in the highly competitive Raleigh-Durham market. While we have had some success, we have not been able to grow our business the way we would like in this market,” Kroger Mid-Atlantic President Jerry Clontz said in a statement.

“The retail environment is challenging and changing in Raleigh-Durham,” Clontz noted.  “Many retail analysts say the Raleigh-Durham market is overstored.”

Nine stores are under contract to be sold: one store to Food Lion (in Raleigh), eight stores to Harris Teeter (in Apex, Cary, Durham, Fuquay-Varina and Raleigh) and one store to Crunch Fitness (in Raleigh). Matthews, N.C.-based Harris Teeter is a subsidiary of Kroger, which acquired the chain in 2014.

“We are continuing discussions and exploring potential options for the remaining stores,” Clontz said. Kroger Mid-Atlantic worked with The Food Partners, a Washington, D.C.-based investment banking firm, as a strategic adviser for the divestiture of these stores.

Overall, Roanoke, Va.-based Kroger Mid-Atlantic has 122 stores — including 119 pharmacies and 95 fuel centers — in Virginia, West Virginia, North Carolina, Tennessee, Kentucky and Ohio. 

The closings in the Raleigh-Durham area will affect about 1,500 employees, more than half of whom are part-time, according to Kroger. The company has operated in the Raleigh-Durham market since 1989.

“We’re making every effort to assist our associates in finding employment,” Clontz stated. “We will offer job fairs and job placement services to associates. Our associates also have access to our employee assistance programs to help them manage through this process.”

Food Lion said Wednesday it plans an extensive remodel of the Kroger store it’s acquiring in Raleigh, which will offer an expanded variety and assortment of products, including more local, natural, organic and gluten-free items. The Ahold Delhaize USA supermarket chain expects to reopen the store under its banner early next year.

"We are so excited to add this new location to our network of more than 160 stores serving the Raleigh area," Food Lion President Meg Ham said, adding that the chain has operated in the market for over 40 years. “With the addition of this new store, we have an even greater opportunity to serve more customers with fresh, quality products at affordable prices every day."