HARRIS TEETER EXPANDS PHARMACY, COSMETICS

MARK HAMSTRA

CHARLOTTE, N.C. -- Harris Teeter is expanding its pharmacy and health and beauty care offerings in the new, larger stores that it is opening this year, the company told SN.

The 142-unit chain, a subsidiary of Ruddick Corp., plans to add about eight to 10 pharmacies this year, along with expanded cosmetics departments, in stores that are 40,000 to 42,000 square feet.

"We're adding cosmetics to our mix," said Andy Rhykerd, category manager, health and beauty care, Harris Teeter. "We're going from smaller stores to building bigger stores that have pharmacies."

Harris Teeter's newer stores are about 4,000 square feet bigger than the company's traditional stores, which were too small to adequately accommodate pharmacies, Rhykerd said.

In addition, Harris Teeter has decided to replace the Oil of Olay cosmetics line in its stores this March with the lower-priced Wet 'n' Wild line. Procter & Gamble is discontinuing its more upscale Oil of Olay color cosmetics line as of next year, and retailers are looking for products to replace it.

The chain currently has pharmacies in 28 stores, and expects to have 36 to 38 by year-end, Rhykerd said. Harris Teeter also currently offers cosmetics in 24 stores. Cosmetics departments range from 16 to 24 feet.

Ruddick Corp., which also operates a textile subsidiary, sold 26 supermarkets last year to focus on its core markets. The company has been quickly building new stores in those markets, however. It added four new stores in the first quarter of fiscal 2002 and plans to open seven additional stores during the fiscal year, the company said in its first-quarter earnings release.

Andrew Wolf, analyst, BB&T Capital Markets, Richmond, Va., said he was unaware of Harris Teeter's plans to add pharmacies, but he said he wasn't surprised.

"It's consistent with the way the industry has trended," he said.

Meanwhile, Rhykerd said he was targeting more price-conscious consumers with the new cosmetics line.

"We didn't have anything on the budget side, so we decided to add a lower-end line," he said.

He said the chain has begun placing the Wet 'n' Wild line in some of its newer stores, but in March it will begin rolling the line out "in earnest."