Harris Teeter Sells Atmosphere As Well As Food

7:43 AM, Jul 10, 2013   |    comments
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Kroger said Tuesday it is acquiring all 212 Harris Teeter Supermarket stores for $2.4 billion, but plans to keep management and operations the same.

That's likely good news to the loyal customers of the chain's stores, which operate in eight southeastern and Mid-Atlantic states and in Washington, D.C.

Like its more upscale rivals in metro-area suburbs along the Eastern Seaboard, shopping at a Harris Teeter store is as much about the experience as it about the quality and the price of the products headed for the cart.

Its high, white ceilings and "farmer's market" decor are aimed at making shoppers feel more like they're at a neighborhood market - albeit one with some high-end features.

Harris Teeter has all the staples - diapers, laundry detergent, soft drinks, beer - displayed in spacious aisles and at competitive prices. It carries a wide array of brands from its own low-price store brand to high-end boutique brands.

The store has a reputation for featuring quality and competitively priced fresh produce that caters to local shoppers' tastes, as well as fresh and frozen offerings at its butcher and seafood stations.

But it's perhaps best known for its 24/7 availability of prepared foods from on-site delis and bakeries. Cakes, soups, salads and sandwiches can be made to order. There is a wide selection of sushi, as well as in-store salad and prepared foods bars. Some locations also offer online ordering with pickup at the store.

However, the atmosphere shows up in slightly higher prices, at least compared with grocery chains that focus on the lowest price at the expense of creating a shopping experience.

"Good overall shopping experience," shopper Mike Maynard, a Maryland resident, said on Tuesday. But he added, "It's best to shop with coupons in hand."

Harris Teeter keeps prices overall lower with its own private brand version of nearly every product it sells, including its own line of international and ethnic foods called H.T. Traders. It also has its own line of pet products, baby products, home products and organic food products.

The signs for the various sections in the store - produce, flowers, pharmacy, etc. - look like they came out of the 1970s, and the stores deliberately cultivate an atmosphere of a old neighborhood grocery store, down to the brown paper bags with handles - a favorite of some shoppers.

"I love their incredible amount of organic and locally grown produce," said Mallorie Sullivan of Norfolk, Va., on Tuesday.

On the company's website, Harris Teeter has a section called "meet your neighbor," which shows customers where its fish is caught, where its oranges are grown and where its beef is raised. The store also has a loyalty brand program, dubbed VIC, for "very important customers."

The buy is a big boost for Kroger, the country's largest grocery chain, said Van Conway, CEO of Conway MacKenzie. But he isn't convinced Kroger will leave the Harris Teeter brand alone over the long run.

"This is a $2.5 billion deal. Obviously, Kroger believes there's a profit to be made in acquiring Harris Teeter," said Conway. "But they don't want to trample customers and employees and push people away by changing things too fast. I think slowly you'll see Kroger tinkering with Harris Teeter."

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