Harris Teeter/Kroger integration

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Re: Harris Teeter/Kroger integration

Post by wnetmacman »

pseudo3d wrote:It's important to note that United DID get SuperValu brands soon after they were acquired, replacing Topco brands. Secondly, I wouldn't put much stock in CR ratings, it puts Raley's, Stater Bros., and DeMoulas Market Basket on the top 10 (beaten only by Publix, Trader Joe's, Sprouts, Wegmans, and...Costco), and H-E-B didn't even come in the top 10. Whole Foods was beaten by Aldi (Harris Teeter came in 17th). Hannaford, Food City (an obscure chain in Tennessee), ShopRite, and Lowe's Foods of NC beat Kroger (though Fry's came in 16th). Ahold's Giant came in between Winn-Dixie and Randalls
(link). Is Stater Bros. or Raley's really Wegmans/Publix/H-E-B tier material? I don't think so.
I think your opinion of HEB is overrated. They have proven that they cannot operate outside of Texas. Even Publix has made major inroads (albeit not as successful) outside of Florida.

I wouldn't call Food City an obscure chain in Tennessee. K-Va-T is a pretty large regional chain (125 stores), having expanded largely through others' misfortunes in the Eastern Tennessee, Eastern Kentucky and western Virginia areas. When you go to that area, which includes Chattanooga and Knoxville, they have a pretty good hold, and have edged Kroger out of all but Knoxville.

Stores change house brands all the time, as it benefits them. Albertsons, as you may remember, had its own house brand before the split. I found that Supervalu didn't offer as much variety as the Albertsons brands did. Safeway, however, had very strong house brands, which is why they're bringing them over.

Also, ratings don't mean much to me. You typically get one of two folks rating stores: those who won't go elsewhere, and the most disgruntled shoppers. Very few median customers do those surveys, but the least happy do frequently.

Having said all that, if Albertsons doesn't move from being a Promotional retailer, they may be signing their own death warrant. Not everybody wants to go just for the sale.
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Re: Harris Teeter/Kroger integration

Post by pseudo3d »

wnetmacman wrote:
pseudo3d wrote:It's important to note that United DID get SuperValu brands soon after they were acquired, replacing Topco brands. Secondly, I wouldn't put much stock in CR ratings, it puts Raley's, Stater Bros., and DeMoulas Market Basket on the top 10 (beaten only by Publix, Trader Joe's, Sprouts, Wegmans, and...Costco), and H-E-B didn't even come in the top 10. Whole Foods was beaten by Aldi (Harris Teeter came in 17th). Hannaford, Food City (an obscure chain in Tennessee), ShopRite, and Lowe's Foods of NC beat Kroger (though Fry's came in 16th). Ahold's Giant came in between Winn-Dixie and Randalls
(link). Is Stater Bros. or Raley's really Wegmans/Publix/H-E-B tier material? I don't think so.
I think your opinion of HEB is overrated. They have proven that they cannot operate outside of Texas. Even Publix has made major inroads (albeit not as successful) outside of Florida.
While I agree that a good portion of H-E-B's stores are nothing to get excited over, I think that nothing has been "proven". They went in with one small store in Louisiana (compared to the dozens going into Houston) in an old Delchamps (I believe that was an even older Winn-Dixie) that happened to be in front of a major road that underwent a reconstruction. It closed in 2003. Not only is this example getting too old to be relevant anymore, it's also disproven anyway, since H-E-B operates around 50 stores in Mexico.

Stores change house brands all the time, as it benefits them. Albertsons, as you may remember, had its own house brand before the split. I found that Supervalu didn't offer as much variety as the Albertsons brands did. Safeway, however, had very strong house brands, which is why they're bringing them over.

Having said all that, if Albertsons doesn't move from being a Promotional retailer, they may be signing their own death warrant. Not everybody wants to go just for the sale.
The problem with Albertsons and "new ideas" as many are saying is that essentially all but United have been living in fugue states since around 2006, with Safeway pushing Lifestyle and believing it would change the company even when numbers continually proved that wasn't the case, and with Albertsons either shuttering stores or having SuperValu doing the same. Therefore, trying to renovate to add new prepared options and a unified, expanded house brand is playing catch-up because Kroger, H-E-B, Publix, et. al. have had 10 years to expand, change, and thrive.

Back to Harris Teeter, I think it may still be too early to tell. If they start converting Kroger stores to HT, then that may be a sign of good for the chain. If vice-versa, then that tends to lean bad, and so far, I haven't heard of any Kroger stores converting to Harris Teeter.
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Re: Harris Teeter/Kroger integration

Post by veteran+ »

The surveys for favorite grocery store, etc. are interesting.

To understand what they really mean you have to try and figure out what kinds of questions are being asked.

I do not think that any of these surveys are trying to compare Stater Bros. with Publix or Trader Joe's.

Within their demographics their type of customers are very very loyal. You will find slightly more crossover shopping between Publix and Trader Joe's but not between Stater Bros. and Trader Joe's. There is not much crossover even between Stater Bros. and Vons.

With Consumer Reports there is a mixture of "professional testing" that they perform AND consumer satisfaction opinions and complaints. Sometimes the mixing of these elements does not make sense to me.
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Re: Harris Teeter/Kroger integration

Post by wnetmacman »

pseudo3d wrote:While I agree that a good portion of H-E-B's stores are nothing to get excited over, I think that nothing has been "proven". They went in with one small store in Louisiana (compared to the dozens going into Houston) in an old Delchamps (I believe that was an even older Winn-Dixie) that happened to be in front of a major road that underwent a reconstruction. It closed in 2003. Not only is this example getting too old to be relevant anymore, it's also disproven anyway, since H-E-B operates around 50 stores in Mexico.
The 50 stores you refer to are largely marketing to the same type of customer they market to in San Antonio and points south: Mexicans, and Mexican Americans. They are also largely, but not entirely, near the Texas border.

They went into Lake Charles with that mindset, but there was no Hispanic population there at that time. And the store was always previously a Delchamps. Winn Dixie only marginally operated in Lake Charles, and only from the late 70's to mid 80's. The store has been a very successful Market Basket for several years now. At the time of its operation as HEB, Walmart was right next door, not competing in the grocery business. The road construction may have been a minor factor, but Lake Charles just never warmed up to the store, and HEB wasn't sold on it.
pseudo3d wrote:The problem with Albertsons and "new ideas" as many are saying is that essentially all but United have been living in fugue states since around 2006, with Safeway pushing Lifestyle and believing it would change the company even when numbers continually proved that wasn't the case, and with Albertsons either shuttering stores or having SuperValu doing the same. Therefore, trying to renovate to add new prepared options and a unified, expanded house brand is playing catch-up because Kroger, H-E-B, Publix, et. al. have had 10 years to expand, change, and thrive.
Ask a current A&P employee about continuing to push old and bad ideas. Can't do that? Cause it didn't work for them either.
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Re: Harris Teeter/Kroger integration

Post by pseudo3d »

wnetmacman wrote:
pseudo3d wrote:While I agree that a good portion of H-E-B's stores are nothing to get excited over, I think that nothing has been "proven". They went in with one small store in Louisiana (compared to the dozens going into Houston) in an old Delchamps (I believe that was an even older Winn-Dixie) that happened to be in front of a major road that underwent a reconstruction. It closed in 2003. Not only is this example getting too old to be relevant anymore, it's also disproven anyway, since H-E-B operates around 50 stores in Mexico.
The 50 stores you refer to are largely marketing to the same type of customer they market to in San Antonio and points south: Mexicans, and Mexican Americans. They are also largely, but not entirely, near the Texas border.

They went into Lake Charles with that mindset, but there was no Hispanic population there at that time. And the store was always previously a Delchamps. Winn Dixie only marginally operated in Lake Charles, and only from the late 70's to mid 80's. The store has been a very successful Market Basket for several years now. At the time of its operation as HEB, Walmart was right next door, not competing in the grocery business. The road construction may have been a minor factor, but Lake Charles just never warmed up to the store, and HEB wasn't sold on it.
Yeah, except H-E-B Pantry in Lake Charles opened in 1996, and the first H-E-B in Monterrey opened in 1997, with five more operating in the next two years.

///
Back on Harris Teeter, didn't Kroger almost immediately adapt the "Fresh Foods Market" name for its own deli goods? That's what I seem to remember. Different font, though, and vastly different quality. Again, on Harris Teeter, I ask...if Kroger wants to use Harris Teeter to help it better compete against Publix, then why haven't any Krogers converted to Harris Teeter? One of the Nashville Harris Teeter stores and became Kroger have horrible reviews.
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Re: Harris Teeter/Kroger integration

Post by storewanderer »

I found a lone Harris Teeter that uses Kroger cash register software (also accepts Kroger loyalty). The registers were just updated so they are indeed in the process of moving over to Kroger systems. Both IBM platform so not much of a change.

Harris Teeter really runs some great stores. I visited a store in a central/southern part of Charlotte at lunchtime and it was incredible. The store has a pizza bar (slices 1.99 cheese or 2.49 with toppings and they have a minimum of 10 available flavors), sandwich bar (line was steadily 10 customers), giant salad bar (also had steady use by 5-10 customers), large hot asian food bar, large hot other food bar. This store was doing a better lunch business than the Whole Foods across the street (which was the nicest Whole Foods by far that I've ever seen). The thing is the Harris Teeter prepared food items are great quality. The pizza is very good especially for the price. The asian food is quite good as well though not as great of a value unless you only take meat. Somewhat nearby was another location that was a really nice two floor building but the second floor was just over half of the store (the open half with the super high ceiling was deli, produce, bakery) with an elevator and stairs (odd no escalator) and on the second floor was a beer/wine bar, alcohol, food seating, a cash register, and drug/general merchandise (also management offices and restrooms).

Harris Teeter was not successful in Nashville. Their stores there were a sad shadow of what their stores around Charlotte are. They did not execute well and the stores did not have all the "features" of these stores in Charlotte. Based on the bad reviews of the converted store it appears for some reason a lot of people are shopping there based upon the poorly stocked departments and messy salad bar. I can assure you, as I was in that store when it was Harris Teeter, it was not a busy store as Harris Teeter. So somehow Kroger is able to attract more customers with its own name in Nashville.

I think it comes down to customer expectations in each given market. Why does Publix have salad bars, self checkout, and hot asian food in Charlotte? Because Harris Teeter has it and customers here are expecting those items in their store. In a lot of these Kroger markets adding those departments simply would not work because customers just do not go to Kroger for those items nor are those items standard in grocery stores in those markets.

I don't think we will be seeing Kroger Stores convert to Harris Teeter but it appears Kroger is continuing to develop new Harris Teeter stores. At least 4 new stores opened last year and more are coming soon. I think a lot of Kroger Stores tend to be placed in lower middle class or very middle class type areas. This is just not the target customer for a "good" Harris Teeter. A "good" Harris Teeter is catering to an upper middle class customer or in an area with a heavy daytime population (many offices nearby) to support its perimeter programs. A much higher percentage of floor space in Harris Teeter is devoted to fresh departments than in a typical Kroger due to this difference in customers. Pricing on center store in Harris Teeter is higher and they have a lot less private label than a typical Kroger. Once they stop building new Harris Teeters or start building new Krogers in Harris Teeter markets then I will agree that it is the beginning of the end for Harris Teeter. Until then I will suggest you visit Charlotte and spend some time in some of these stores and see what you think after that. I can tell you my opinion of Harris Teeter has changed radically now, after my prior poor experiences in Nashville and indifferent experiences in FL and DC (VA side).
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Re: Harris Teeter/Kroger integration

Post by pseudo3d »

storewanderer wrote: Harris Teeter was not successful in Nashville. Their stores there were a sad shadow of what their stores around Charlotte are. They did not execute well and the stores did not have all the "features" of these stores in Charlotte. Based on the bad reviews of the converted store it appears for some reason a lot of people are shopping there based upon the poorly stocked departments and messy salad bar. I can assure you, as I was in that store when it was Harris Teeter, it was not a busy store as Harris Teeter. So somehow Kroger is able to attract more customers with its own name in Nashville.
Even if it wasn't doing well, the reviews seem to be focused on the fact that they basically fired everyone that was working there and spent months doing a needlessly long "renovation" that added little more than hardwood floors, it's way understaffed and most of the people that do work there are rude, and the niceties that Harris Teeter had are gone (the cookie display replaced with a cigarette case), and the deli is dirty. Sounds like the same people that shopped at Harris Teeter shop at the Kroger now (less than that, since the conditions have driven some away). I can't imagine that the downscaled supermarket would attract MORE people overall unless Harris Teeter had gone into the wrong neighborhoods.
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Re: Harris Teeter/Kroger integration

Post by Knight »

storewanderer wrote:Harris Teeter was not successful in Nashville.
Harris Teeter overextended itself to Nashville. It should have gradually expanded and developed firm presences in western North Carolina and eastern Tennessee markets before entering Nashville.
storewanderer wrote:I don't think we will be seeing Kroger Stores convert to Harris Teeter but it appears Kroger is continuing to develop new Harris Teeter stores. At least 4 new stores opened last year and more are coming soon...Once they stop building new Harris Teeters or start building new Krogers in Harris Teeter markets then I will agree that it is the beginning of the end for Harris Teeter.
I will speak on Kroger and Harris Teeter in the theater covering North Carolina and South Carolina. The Atlanta Division is active constructing and planning five Kroger Marketplace stores in South Carolina. Harris Teeter is re-entering the Greenville. South Carolina, market, is adding fuel centers, and is opening larger stores at 78,000 square feet. I do not know what the Mid-Atlantic Division is doing in North Carolina. The three divisions will have stores competing against Publix's Charlotte Division stores.

Possibilities for Kroger:
  • Harris Teeter opens Harris Teeter Marketplace stores to join the Marketplace hypermarket format across Kroger's banners.
  • Harris Teeter re-enters previous markets in North Carolina and South Carolina.
  • Kroger acquires a supermarket participant dominant in western North Carolina and upstate South Carolina. An acquisition would increase store count and get Kroger into trade areas and markets Kroger, Kroger Marketplace, and Harris Teeter stores are not present or cannot reach.
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Re: Harris Teeter/Kroger integration

Post by pseudo3d »

I don't think opening 78k square feet stores are necessarily a step toward Marketplace stores, as a lot of stores in Texas at least reach that. I think H-E-B was building stores that size years before they actually got into the H-E-B Plus game, which initially wasn't much of a hypermarket (still isn't, really...apparel department is still mostly cheap, weird-looking women's clothing...kind of a larger version of the display of dresses and leggings display at the local Randalls. If the 78k square foot stores are mostly food then I would say that's not a sign, necessarily, that they are moving in that direction.

More interestingly, I haven't heard anything about the Fernandina Beach store. They were supposed to give it a major expansion but that was months ago, and they indicated that they would probably have demolished part of the shopping center it was in to build the expansion. If Kroger converts the store to a regular Kroger without the expansion (after all, it is one of the weaker HT markets), then it could be a sign that Kroger wants to expand under its own name in Florida, or just stop at Jacksonville as far as the Atlanta division goes.
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Re: Harris Teeter/Kroger integration

Post by Knight »

pseudo3d wrote:I don't think opening 78k square feet stores are necessarily a step toward Marketplace stores, as a lot of stores in Texas at least reach that...If the 78k square foot stores are mostly food then I would say that's not a sign, necessarily, that they are moving in that direction.
Kroger has been expanding stores company-wide to at least 78,000 square feet.
pseudo3d wrote:More interestingly, I haven't heard anything about the Fernandina Beach store. They were supposed to give it a major expansion but that was months ago, and they indicated that they would probably have demolished part of the shopping center it was in to build the expansion. If Kroger converts the store to a regular Kroger without the expansion (after all, it is one of the weaker HT markets), then it could be a sign that Kroger wants to expand under its own name in Florida, or just stop at Jacksonville as far as the Atlanta division goes.
I think Harris Teeter overextended itself into Georgia and Florida, and did not properly build market share through additional stores. Being a subsidiary of Kroger, it is possible for Harris Teeter to enter new markets and re-enter previous markets through better strategies.

Entering Jacksonville, Florida, could spur Kroger to either create a new region in its Atlanta Division, or establish a new division covering northern Florida and southeast Georgia.
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