Kroger Buys Harris Teeter For $2.5 Billion, Stores And Name Will Not Change, Locations Expand In 3 Southeast And Mid-Atlantic States

Kroger, the largest traditional supermarket operator in the United States, will buy Harris Teeter in a $2.5 billion deal. Kroger will expand its stores in three southeastern and mid-Atlantic states by buying the regional grocer, Harris Teeter Supermarkets Inc.

Harris Teeter has 212 stores in eight states, including locations in Delaware, Florida, Maryland and Washington, D.C., where Kroger currently does not have a presence, USA Today reports. This means that Kroger will expand in these three states, bringing the total number of states the company operates in to 34.

According to the Associated Press, Kroger says it doesn't plan to close any stores after the deal is made. However, in the regions where there is some overlap, it may be asked by the Federal Trade Commission to sell stores to other companies in order to maintain a competitive landscape, said Mike Schlotman, Kroger's chief financial officer.

Harris Teeter stores will keep their names and personalities, the company said. Kroger owns almost two dozen other regional chains, including Ralphs in Southern California, Fred Meyer in the Pacific Northwest, and Fry's in Phoenix.

"I don't see a lot of change that we would make to Harris Teeter," Schlotman said. "It already has a large fresh and prepared section - that's one of the things they're good at."

Harris Teeter was an attractive acquisition for Kroger due to its focus on fresh and prepared foods. Harris Teeth stores also tend to be in more affluent neighborhoods and are more profitable because they have bigger fresh food sections. The regional chain made about $4.5 billion in revenue last year, The Christian Science Monitor reports.

Judi Niedercorn, a shopper from McLean, Virginia, told USA Today that the deal should "bring a bit of a higher level of gourmet sophistication and quality to the Kroger store family."

Schlotman acknowledges Harris Teeter is "slightly more upscale operator" than the Kroger brand, USA Today reports.

Ken Nisch, chairman of brand strategy and retail design firm JGA, whose firm designed the new Whole Foods Market in downtown Detroit, warned that Kroger will now have to manage a delicate balance between the two very different chains.

"If they can execute the delicate dance of being enormous and local at the same time, then they've got a winning formula," Nisch said. "But history would suggest local is much harder to execute with all the growth in local, regional and specialty stores." 

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