Wednesday, July 10, 2013

Kroger Buys Harris Teeter

Big news on the grocery store front: big bad Ohio-based Kroger is buying locally owned Harris Teeter, a.k.a. all that is well and good about North Carolina. Or, at least, that's how most of the locals feel about this. My take is going to be slightly different.

(Public service announcement. Even though pretty much everyone calls it "Krogers", the name of the store is simply "Kroger". There is no S. This annoys me to no end. Even their employees sometimes call it "Krogers".)

We all go grocery shopping, and we have a choice regarding which grocery stores we go to. Grocery stores are also often geographically-based, so we tend to get a little 'attached' to them. Like, we've been shopping at the so-and-so for 40 years, and it's awesome, and it's WAY better then the big bad multi-state grocery chain that just moved in from out of state. How dare they invade our territory! Our grocery stores are better, darn it! Screw them!

First off, let's get this out of the way: I'm a little biased. Of the four cities I've lived, Raleigh is the only one that doesn't have what I would consider to be a "really nice grocery store". In other words, it doesn't have a Publix or Wegmans. Nothing here can really compete. Harris Teeter tries to be like them, but I basically view Harris Teeter as Publix wannabe: an "upscale" grocery store known most of all for its service, deli, bakery, etc. Except that Harris Teeter is more expensive, Publix quality is more consistent between stores (I've been to a few substandard Harris Teeters), and that while Harris Teeter does do some things very well (e.g. the bakery), Publix is better in almost every way, anyway. I wouldn't say that I'm anti-Harris Teeter, necessarily, but I think they fall short of what they're trying to be. There's a reason I go to the Kroger across the street instead. As for people who think Harris Teeter is the best thing ever...well, they've just never lived near a Publix or Wegmans.

Well, anyway, Harris Teeter's been having trouble keeping up with the big boys, so they've been looking for a buyer for a while now. In comes big, bad, imperialistic Kroger, who will buy pretty much anyone and anything. Publix was rumored as a potential buyer, but acquisitions aren't their style, at all. Publix is very calculated and deliberate in their expansion, and they grow from within. They don't do buyouts.

My reaction to the buyout news was mixed. On one hand, given my opinion of the Harris Teeter chain...HA! You lose. Serves you right for trying to take on Publix in Jacksonville many years ago. (That didn't end well for Harris Teeter, by the way.) On the other hand, this does mean less competition locally, which is unfortunate. Fact is, having a Harris Teeter across the street makes Kroger better. The trend of big corporations buying out the little regional-based guy is generally annoying, but I wasn't as annoyed by this transaction, because it almost feels like validation of my stance on the two chains. But just like I'm not anti-Harris Teeter, I'm not really pro-Kroger, either. They annoy me from time to time, but as far as Raleigh is concerned, they're the best we've got, I suppose.

So, let's say you're a Harris Teeter long time shopper and loyalist. You're probably on suicide watch, right? Sure, the Kroger CEO says that Harris Teeter will still be "autonomous" and still be their own thing, but Kroger is a veteran of this whole acquisition thing. They've done it over, and over, and over again. The "King Soopers" we went to in Denver was pretty much a Kroger, with mostly Kroger-branded products and such. Sure, it still says "King Soopers" on the sign, but I bet after several years, the Kroger influence started to trickle through, and before you knew it, King Soopers was turned into just another generically adequate grocery store, a.k.a. Kroger.

Is that what's going to happen to Harris Teeter, too? I'm not so sure. This is a unique case among Kroger acquisitions, because Kroger already has a foothold here, albeit a small one (14 stores in the state, mostly in the Triangle). I think it would make sense for Kroger to keep Harris Teeter separate, and provide customers with two separate options: a "standard" one (Kroger), and an "upscale" one (Harris Teeter). I think that's what they're going to do in the short term. (As for the long term, who knows?)

I really think Harris Teeter will be better because of this. Having the backing and resources of Kroger can only help, right? Shoot, the merger may even allow Harris Teeter to lower their prices. But on the other hand...why would they? Why get in a price war with yourself? Instead, I think they're more likely to raise prices at the existing Krogers, now that they've bought out some of the competition. Or, they may also decide to take some of their nicer stores, and convert them to more "upscale" Harris Teeters, in order to have an excuse to raise prices. That's entirely possible at my neighborhood Kroger, which is much bigger and in better condition than the Harris Teeter across the street, even though Harris Teeter is supposed to be the "upscale" chain.

Actually, this is all silly speculation. I doubt you'll notice any significant difference at either store for quite a while. I'm confident that the things you like about Harris Teeter - whatever those are - aren't going away, because that would be dumb of them. So, you all can back off from that ledge now, provided you can stand the thought that Harris Teeter isn't North Carolina-owned anymore. If you can't stomach that, then, well, you could always shop at Food Lion...

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