Kroger to sell 10 Harris Teeter stores in D.C., Virginia and Maryland to Piggly Wiggly owner

[mjhale]

Not to go too far down a rabbit hole here off topic but I was surprised that King's / Balducci's was not sold to C&S. That seemed like more of a non-core entity that also overlapped with Acme / Safeway / Harris Teeter in that same region.

But Kings specifically was purchased, I believe, particularly for its overlap with ACME because they wanted to prevent another competitor from getting the stores. That makes it not ideal to sell now.

Balducci's doesn't seem like competition in the truest sense of the word to Harris Teeter, Acme and Safeway. To me it is a specialty grocer not a full line store. The store would be something that Albertsons could use in specific areas that would support it. For instance, Albertsons closed the McLean Safeway in favor of the Balducci's in the same area. McLean is one of the most affluent areas of the DC area. The Safeway there went back to the 1960s but it was small with nowhere to expand. Giant-MD has a large modern store in McLean. Incidentally, the old McLean Safeway is now a Lidl of all things.

[marketreportblog]

Balducci's doesn't seem like competition in the truest sense of the word to Harris Teeter, Acme and Safeway. To me it is a specialty grocer not a full line store. The store would be something that Albertsons could use in specific areas that would support it. For instance, Albertsons closed the McLean Safeway in favor of the Balducci's in the same area. McLean is one of the most affluent areas of the DC area. The Safeway there went back to the 1960s but it was small with nowhere to expand. Giant-MD has a large modern store in McLean. Incidentally, the old McLean Safeway is now a Lidl of all things.

You're absolutely right. Balducci's is very much a specialty grocer. Kings is more of a higher-end, small-format full supermarket. But given the proximity to existing ACME and Safeway stores (McLean notwithstanding), especially in parts of New Jersey where there are towns whose only two supermarkets are ACME and Kings, I see that purchase as only strategic, not because they actually wanted Kings and Balducci's.

[buckguy]

A few thoughts:

Quite a few H-T locations are oddities--they went into speculative developments in DC and the suburbs and some simply unusual locations. One is an old car dealership-later storage facility that's a couple blocks from a Safeway. Another is an off the beaten path location next to a condo in the suburbs---not a great performer and a new Wegman's probably will be the last nail in the coffin. The 1st & M store was the beginning of commerce in the NoMa area which now has a flagship REI and Trader Joe's. It's rather close to a Safeway and although it does pretty well, I suspect it will be sold.

DC has no strong indies whereas Baltimore has a few and Shop-Rite seems to be holding on there. I could see stores being spunoff and succeeding. Not so much DC.

Balducci's used to have more stores and definitely is a niche operation.

Bringing back the GU brand makes no sense---they haven't been in DC for 40 years and even then, they were not a premium brand. They had a very uneven operation.

[mjhale]

With these Harris Teeter stores being sold off, I'm curious as to the banner or banners that will be used in the DC area if the merger were to go through. It seems to me that both banners could co-exist because there are areas where Harris Teeter has multiple stores but there are very few Safeway locations. For instance, Loudoun County has only two Safeway stores but multiple Harris Teeter locations. Apparently, Harris Teeter has good market share in Loudoun so it wouldn't make sense to re-banner those H-T locations to Safeway. Closer in Safeway is more prevalent. Also, Safeway and Harris-Teeter are different enough formats, Harris Teeter skewing higher end in their eyes, that they could co-exist even if they were both owned by the combined entity. I'm very curious to see the list of 10 stores that are going to be sold. Nearest me, there is a Safeway and a Harris Teeter that a less than a mile apart. That's the kind of separation that I'd think that a divestiture would be in order.

[cw06]

With these Harris Teeter stores being sold off, I'm curious as to the banner or banners that will be used in the DC area if the merger were to go through. It seems to me that both banners could co-exist because there are areas where Harris Teeter has multiple stores but there are very few Safeway locations. For instance, Loudoun County has only two Safeway stores but multiple Harris Teeter locations. Apparently, Harris Teeter has good market share in Loudoun so it wouldn't make sense to re-banner those H-T locations to Safeway. Closer in Safeway is more prevalent. Also, Safeway and Harris-Teeter are different enough formats, Harris Teeter skewing higher end in their eyes, that they could co-exist even if they were both owned by the combined entity. I'm very curious to see the list of 10 stores that are going to be sold. Nearest me, there is a Safeway and a Harris Teeter that a less than a mile apart. That's the kind of separation that I'd think that a divestiture would be in order.

Harris Teeter isn't unionized, so swapping banners with Safeway wouldn't be easy. Kroger has "deunionized" stores in the past by giving them to HT, but there's too much regulatory scrutiny of this merger to do that here.

[BatteryMill]

Harris Teeter isn't unionized, so swapping banners with Safeway wouldn't be easy. Kroger has "deunionized" stores in the past by giving them to HT, but there's too much regulatory scrutiny of this merger to do that here.

Funny thing as the opposite happened in the Nashville market.

[Knight]

Harris Teeter isn't unionized, so swapping banners with Safeway wouldn't be easy. Kroger has "deunionized" stores in the past by giving them to HT, but there's too much regulatory scrutiny of this merger to do that here.

Funny thing as the opposite happened in the Nashville market.

Harris Teeter's five remaining Tennessee stores were in the Nashville area. Not having more stores and being in more areas across Tennessee made Harris Teeter irrelevant.

[storewanderer]

Harris Teeter isn't unionized, so swapping banners with Safeway wouldn't be easy. Kroger has "deunionized" stores in the past by giving them to HT, but there's too much regulatory scrutiny of this merger to do that here.

Funny thing as the opposite happened in the Nashville market.

Harris Teeter's five remaining Tennessee stores were in the Nashville area. Not having more stores and being in more areas across Tennessee made Harris Teeter irrelevant.

Those Nashville H-T Stores were basically a joke. Prices were too high, they were not well located, business was very slow. They just seemed "off." But I also think the H-T Stores in DC/MD/VA seem "off" compared to the NC/SC H-T operation (which is excellent). But DC/MD/VA isn't as "off" as Nashville was. It was really not a good situation there for H-T. I am surprised it lasted as long as it did.

Also recall H-T previously exited Atlanta. Before Kroger, though I think Kroger got some stores out of that exit.

[Knight]

Those Nashville H-T Stores were basically a joke. Prices were too high, they were not well located, business was very slow. They just seemed "off." But I also think the H-T Stores in DC/MD/VA seem "off" compared to the NC/SC H-T operation (which is excellent). But DC/MD/VA isn't as "off" as Nashville was. It was really not a good situation there for H-T. I am surprised it lasted as long as it did.

Also recall H-T previously exited Atlanta. Before Kroger, though I think Kroger got some stores out of that exit.

Kroger acquired a quantity of Harris Teeter stores indeed. I do not know if all acquired stores were in Georgia. Harris Teeter #184 in Marietta became Kroger #657. Harris Teeter #213 in Duluth is now operating as Super H Mart.

[buckguy]

Those Nashville H-T Stores were basically a joke. Prices were too high, they were not well located, business was very slow. They just seemed "off." But I also think the H-T Stores in DC/MD/VA seem "off" compared to the NC/SC H-T operation (which is excellent). But DC/MD/VA isn't as "off" as Nashville was. It was really not a good situation there for H-T. I am surprised it lasted as long as it did.

Also recall H-T previously exited Atlanta. Before Kroger, though I think Kroger got some stores out of that exit.

Kroger acquired a quantity of Harris Teeter stores indeed. I do not know if all acquired stores were in Georgia. Harris Teeter #184 in Marietta became Kroger #657. Harris Teeter #213 in Duluth is now operating as Super H Mart.

Kroger bought most of the Atlanta H-Ts. Among others, they got the Decatur store (recently discussed when it was closed) and the Briarcliff store (which replaced the Emory Village Kroger). The one on Ponce that was under construction went to Whole Foods (the much larger Crack Kroger was closeby). There was at least one in the Toco Hills area (where Kroger had an existing very large store) that was kept dark.