Harris Teeter/Kroger integration

Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee. No non-grocery posts.
Post Reply
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Harris Teeter/Kroger integration

Post by storewanderer »

I went into two Harris Teeters today and I see zero integration efforts whatsoever with Kroger. In fact, if I did not know it from following the industry, I would not even know Kroger owns Harris Teeter based on my visit to two of their stores.

They are still on their own systems, have their own private label, have their own loyalty card (Kroger loyalty will not even work), have their own ads, etc.

I found a very nice Harris Teeter in Charleston. The store had a wonderful prepared foods area including Asian bar ($7.99 per pound), Pizza Bar (large slices at 1.99 each for cheese or 2.49 each for others; this was an actual department with its own employee and the pizza was great especially for the price), Salad Bar $5.99 per pound (looked really good and was also having steady customer use), and a lot of cold food options in the deli as well (they do not sell hot chicken in the service case, only prepackaged). Bakery also looked really good; they had a separate bread station offering samples with condiments (butter, etc.) which was staffed by its own employee. Produce was well stocked and had some great specials. The rest of the store was generally high priced but did have some good specials and a handfull of everyday low price items at rather attractive prices.

I am really wondering, what is the hold up on integration here. This Harris Teeter division must be quite profitable, so much so that Kroger does not want to rock the apple cart and start making changes to it... I would think they would want to bring in the Kroger private label program at least... I think the rest of Kroger could learn a lot on bakery/deli/prepared foods from Harris Teeter as their quality in those areas is pretty iffy.
pseudo3d
Posts: 3851
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: Harris Teeter/Kroger integration

Post by pseudo3d »

I do remember reading that there was a distaste for Kroger on social media comments when Harris Teeter was acquired.

Considering that Kroger seems to have made more movement in integrating Roundy's (and of course, the Safeway/Albertsons integration continues to churn), maybe (just maybe), that Kroger has made second thoughts and could put Harris Teeter up on the market soon? I know Kroger has a lot of debt to pay down, and Harris Teeter does well enough that it could be attractive to investors as it doesn't need a lot of repair work. The trick would be to divest it without sending alarm bells ringing.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Harris Teeter/Kroger integration

Post by storewanderer »

I'm not sure why they would put it on the market. At some point they will get some synergies going I am just surprised there is no Kroger private label yet, and no systems integration. Kroger Atlanta has a rightfully marginal reputation and that has been the main Kroger division that goes up against Harris Teeter (maybe Kroger Mid Atlantic controls the overlapping Raleigh stores?).

There are some signs of Kroger influence I guess, as I research tonight... It appears they have opened some gas stations in recent months. Also many have observed prices have fallen since Kroger took over. It was my understanding Harris Teeter already had an everyday low price program in place pre-Kroger.

I'd take the Harris Teeter I discussed above today over any other store I visited so far this week. I have been to a handfull of Publix locations, that Altamonte Springs Safeway/Albertsons, the Kroger Marketplace in Savannah, and the Winn Dixie concept store in Jacksonville.

Roundys is an odd case. Mariano's needs some work on profitability but is strong operationally and strong on sales and customer reputation. Pick N Save needs urgent, immediate attention (notice they put a Kroger person in charge of Pick N Save but kept a Roundys person in charge of Marianos) in all regards: operationally, and also customer reputation. I am not sure who they have running Harris Teeter or if any Kroger people have been put in there yet. But Harris Teeter is quite different from Kroger. Walking through their store it is a little difficult to imagine it to be made like a Kroger... it would be a definite downgrade.
Knight
Assistant Store Manager
Assistant Store Manager
Posts: 509
Joined: February 7th, 2016, 8:48 pm
Has thanked: 2 times
Been thanked: 4 times
Status: Offline

Re: Harris Teeter/Kroger integration

Post by Knight »

pseudo3d wrote:I do remember reading that there was a distaste for Kroger on social media comments when Harris Teeter was acquired.

Considering that Kroger seems to have made more movement in integrating Roundy's (and of course, the Safeway/Albertsons integration continues to churn), maybe (just maybe), that Kroger has made second thoughts and could put Harris Teeter up on the market soon? I know Kroger has a lot of debt to pay down, and Harris Teeter does well enough that it could be attractive to investors as it doesn't need a lot of repair work. The trick would be to divest it without sending alarm bells ringing.
The Kroger Company is smart enough not to divest Harris Teeter Supermarkets, Incorporated. Publix, Kroger's rival in the southeastern United States, will continue to expand into markets where Kroger and its banners operate. Both Kroger's Mid-Atlantic and Harris Teeter divisions will be occupied with Publix's expansion into Virginia. Who knows when Publix will expand into Memphis, Tennessee, Mississippi, and Kentucky?
Knight
Assistant Store Manager
Assistant Store Manager
Posts: 509
Joined: February 7th, 2016, 8:48 pm
Has thanked: 2 times
Been thanked: 4 times
Status: Offline

Re: Harris Teeter/Kroger integration

Post by Knight »

storewanderer wrote:There are some signs of Kroger influence I guess, as I research tonight... It appears they have opened some gas stations in recent months. Also many have observed prices have fallen since Kroger took over. It was my understanding Harris Teeter already had an everyday low price program in place pre-Kroger.
Harris Teeter inherited a fuel center from a Piggly Wiggly Carolina Company store in Charleston, South Carolina when it acquired seven stores in 2013. Many existing and future Harris Teeter stores will have fuel centers.

Another observation I have noticed with Harris Teeter is the opening of 78,000-square-foot stores. In North Caroline, one store has opened, another store is beginning construction, and another store is proposed. If Harris Teeter is comfortable operating larger stores, it may be ready to try out a Harris Teeter Marketplace hypermarket store.

Kroger and Harris Teeter pharmacies run on separate pharmacy systems. Integrating all Kroger pharmacies into a single pharmacy system would be a step toward efficiency.
arizonaguy
Store Manager
Store Manager
Posts: 1107
Joined: July 12th, 2013, 6:07 pm
Been thanked: 35 times
Status: Offline

Re: Harris Teeter/Kroger integration

Post by arizonaguy »

Knight wrote:
storewanderer wrote:There are some signs of Kroger influence I guess, as I research tonight... It appears they have opened some gas stations in recent months. Also many have observed prices have fallen since Kroger took over. It was my understanding Harris Teeter already had an everyday low price program in place pre-Kroger.
Harris Teeter inherited a fuel center from a Piggly Wiggly Carolina Company store in Charleston, South Carolina when it acquired seven stores in 2013. Many existing and future Harris Teeter stores will have fuel centers.

Another observation I have noticed with Harris Teeter is the opening of 78,000-square-foot stores. In North Caroline, one store has opened, another store is beginning construction, and another store is proposed. If Harris Teeter is comfortable operating larger stores, it may be ready to try out a Harris Teeter Marketplace hypermarket store.

Kroger and Harris Teeter pharmacies run on separate pharmacy systems. Integrating all Kroger pharmacies into a single pharmacy system would be a step toward efficiency.
I think that there are a couple of things at play here.

1.) There are probably some contracts that have yet to expire which tie Harris Teeter into its current marketing, Private Label and Loyalty programs. When those contracts expire, we will likely see more integration with the rest of Kroger.

2.) Harris Teeter was always billed as about 1/2 a step upmarket from a traditional Kroger store and 1/2 a step downmarket from a Whole Foods. This is in the same category as a Haggen, Mariano's, or Market Street. There are advantages to staying in this market segment if they can successfully pull it off. This may be one reason why they haven't changed a lot. Albertsons hasn't changed a lot at Market Street either.

3.) I agree that pharmacies may be a way to start integration. However, I believe you may see more cross-pollination between Mariano's and Harris Teeter than you will between Harris Teeter and a "standard" Kroger banner. Pick n' Save is the opposite. I expect that chain to look an awful lot like a Kroger, or Smith's, or Fry's in the next year or two.
Knight
Assistant Store Manager
Assistant Store Manager
Posts: 509
Joined: February 7th, 2016, 8:48 pm
Has thanked: 2 times
Been thanked: 4 times
Status: Offline

Re: Harris Teeter/Kroger integration

Post by Knight »

Another integration opportunity for Kroger are the store numbers assigned to all stores. I do not know if Kroger is proceeding in this direction in this format:

Kroger #02900335
350 East Six Forks Road
Raleigh, North Carolina 27609-7828

The first three digits are the division number. The last five digits are the store number. This system is used for supermarkets, convenience stores, department stores, jewelry stores, and The Little Clinic:
011 - Atlanta (Atlanta, Georgia)
014 - Cincinnati/Dayton (Cincinnati, Ohio)
016 - Columbus (Columbus, Ohio)
018 - Michigan (Novi, Michigan)
021 - Central (Indianapolis, Indiana)
024 - Louisville (Louisville, Kentucky)
025 - Delta (Memphis, Tennessee)
026 - Nashville (Nashville, Tennessee)
029 - Mid-Atlantic (Roanoke, Virginia)
034 - Dallas (Dallas, Texas)
034 - Houston (Shenandoah, Texas)
090 - Jay C (Seymour, Indiana)
097 - Harris Teeter (Matthews, North Carolina)
615 - Dillon's (Hutchinson, Kansas)
620 - City Markets (Grand Junction, Colorado)
620 - King Soopers (Denver, Colorado)
660 - Fry's (Tolleson, Arizona)
670 - Turkey Hill (Lancaster County, Pennsylvania)
671 - Tom Thumb
672 - Kwik Shop (Hutchinson, Kansas)
673 - Loaf 'n Jug
701 - Fred Meyer (Portland, Oregon)
702 - Fred Meyer Jewelers (Portland, Oregon)
703 - Ralph's (Compton, California)
704 - Food 4 Less (Compton, California)
705 - Quality Food Center (Bellevue, Washington)
706 - Smith's (Salt Lake City, Utah)
708 - Food 4 Less
851 - The Little Clinic-Fry's (Tolleson, Arizona)
852 - The Little Clinic-City Market/King Soopers
853 - The Little Clinic-Cincinnati(Cincinnati, Ohio)
854 - The Little Clinic-Columbus/Michigan
855 - The Little Clinic-Delta/Nashville
856 - The Little Clinic-Atlanta (Atlanta, Georgia)
857 - The Little Clinic-Delta (Memphis, Tennessee)
858 - The Little Clinic-Central/Louisville
859 - The Little Clinic-Mid-Atlantic (Roanoke, Virginia)
861 - The Little Clinic-Dallas (Dallas, Texas)

Notes:
Both Dallas and Houston divisions share division number 034.
Both City Markets and King Soopers divisions share division number 620.
Roundy's division number is not yet known.

Another method Kroger has used is a letter designation for each Kroger supermarket division:
Atlanta Division (Atlanta, Georgia): GA
Central Division (Indianapolis, Indiana): J
Cincinnati/Dayton Division (Cincinnati, Ohio): A, E
City Markets, Incorporated (Grand Junction, Colorado)
Columbus Division (Columbus, Ohio): N
Dallas Division (Dallas, Texas): SW
Delta Division (Memphis, Tennessee): V, Y
Dillon Stores (Hutchinson, Kansas)
Food 4 Less (Compton, California)
Fred Meyer Stores, Incorporated (Portland, Oregon)
Fry's Foods Stores of Arizona, Incorporated (Tolleson, Arizona)
Harris Teeter Supermarkets, Incorporated (Matthews, North Carolina)
Houston Division (Shenandoah, Texas): SW
Jay C (Seymour, Indiana)
King Soopers (Denver, Colorado)
Louisville Division (Louisville, Kentucky): L
Michigan Division (Novi, Michigan): D
Mid-Atlantic Division (Roanoke, Virginia): R
Nashville Division (Nashville, Tennessee): U
Quality Food Centers (Bellevue, Washington)
Ralph's Grocery Company (Compton, California)
Roundy's (Milwaukee, Wisconsin)
Smith's Food and Drug Centers, Incorporated (Salt Lake City, Utah)

Notes:
Kroger's store numbers are determined by a prefix for the corresponding division, then a number.
Kroger's pharmacy use phone numbers instead of store numbers for prescription refills.

Changes:
The Southwest Division is split into two divisions: the Dallas Division and the Houston Division.
Roundy's is a subsidiary acquired by Kroger.
pseudo3d
Posts: 3851
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: Harris Teeter/Kroger integration

Post by pseudo3d »

Knight wrote:Another integration opportunity for Kroger are the store numbers assigned to all stores. I do not know if Kroger is proceeding in this direction in this format:
In terms of divisions, I thought that there were letters involved, so the old Southwest-era numbering, so the Kroger near me was SW-607. The last three digits meant something, too...in the case of the Southwest division, if it was 6xx, for example, it would be a former AppleTree store. 8xx was former Albertsons stores.

It shouldn't take this long to try to integrate Harris Teeter into Kroger, especially since Safeway and Albertsons have seen a lot of changes since their merger. If Harris Teeter was the better brand Kroger was interested in to compete with Publix, then shouldn't we see some "better" Kroger stores converting to it? I mean, even Market Street took over some Albertsons, so obviously they're interested in growing that brand more.

Earlier this year, Kroger reopened a shuttered Harris Teeter in Nashville [http://www.tennessean.com/story/money/2 ... /80281860/] as a standard Kroger store albeit with some niceties one would expect from a "better" store like HT ("Features of the store include a made-to-order pizza station; fresh sushi; salad bar; made-to-order sandwiches; a meat and seafood department; natural and organic offerings; a floral shop and a pharmacy") despite the store being incredibly small (25,000 square feet?!)

I think that Kroger outright selling HT is still implausible at this point, but they just don't seem, I don't know, interested in the brand enough to keep it.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Harris Teeter/Kroger integration

Post by storewanderer »

Looking much more closely in Harris Teeter I saw a few things:

1. Actual Kroger brand items in seasonal. Joy of Gardening merchandise and HD Designs merchandise.
2. Kroger Plus Cards will NOT scan at Harris Teeter but each store has a generic/store card to use if someone has no card
3. The Harris Teeter gas station appears to have the same software and system as a Kroger fuel station, and the gas pumps look like Kroger gas pumps, they even have the same "policy" sticker showing the suggestion to not use prepaid cards at the pump and that the fuel discount is up to 35 gallons, etc., however, the Kroger Fuel logo was nowhere to be seen. Kroger Plus Cards will scan at the Harris Teeter gas station and say no points/rewards available but discount 3 cents per gallon.
3a. Inside the Harris Teeter store that had a gas station they had a big sign inside the store attached to the wall showing the fuel price in digital; this looked identical to signs I have seen in some Frys but not any other Kroger divisions
4. Kroger Manufactured Product is actually present in center store but with Harris Teeter format labels/distributed by information in other categories: today I found peanut butter, more preserves, more spices.
5. There are signs in Harris Teeter that advertise "more low prices on natural and organic foods" which look like Kroger signs but again these signs have a lot of green in them
6. There are signs throughout the aisles at Harris Teeter showing everyday low prices on certain items that also look like Kroger signs but these signs have a lot of green in them

Harris Teeter pricing is all over the map and a lot of branded center store is priced outrageously (above Publix); prices in drug are also much too high. Some private label center store is well priced and other than that scattered items are well priced but generally my perception of these stores is they have higher prices than Publix, but also have better specials than Publix and nicer deli and produce departments.

It appears to me they do not want to mess this format up so they are making very few changes and trying to make these changes hidden from the customer. I will agree with comparing Harris Teeter to Haggen (the original OR/WA Stores); they are quite similar. I think Harris Teeter has better volume stores and also is getting better velocity though. The comparison to Albertsons/Safeway is largely bogus since neither chain is particularly well liked by consumers (rated poorly in the Consumer Reports supermarket ratings for example) and also the fact that Albertsons has a fire under its chair to get away from paying money to Supervalu for shared services so taking on the Safeway systems and private labels was basically a "must do" regardless of how good or bad or compatible it all was/is.
pseudo3d
Posts: 3851
Joined: November 12th, 2015, 7:01 pm
Has thanked: 5 times
Been thanked: 77 times
Status: Offline

Re: Harris Teeter/Kroger integration

Post by pseudo3d »

storewanderer wrote:Looking much more closely in Harris Teeter I saw a few things:

1. Actual Kroger brand items in seasonal. Joy of Gardening merchandise and HD Designs merchandise.
2. Kroger Plus Cards will NOT scan at Harris Teeter but each store has a generic/store card to use if someone has no card
3. The Harris Teeter gas station appears to have the same software and system as a Kroger fuel station, and the gas pumps look like Kroger gas pumps, they even have the same "policy" sticker showing the suggestion to not use prepaid cards at the pump and that the fuel discount is up to 35 gallons, etc., however, the Kroger Fuel logo was nowhere to be seen. Kroger Plus Cards will scan at the Harris Teeter gas station and say no points/rewards available but discount 3 cents per gallon.
3a. Inside the Harris Teeter store that had a gas station they had a big sign inside the store attached to the wall showing the fuel price in digital; this looked identical to signs I have seen in some Frys but not any other Kroger divisions
4. Kroger Manufactured Product is actually present in center store but with Harris Teeter format labels/distributed by information in other categories: today I found peanut butter, more preserves, more spices.
5. There are signs in Harris Teeter that advertise "more low prices on natural and organic foods" which look like Kroger signs but again these signs have a lot of green in them
6. There are signs throughout the aisles at Harris Teeter showing everyday low prices on certain items that also look like Kroger signs but these signs have a lot of green in them

Harris Teeter pricing is all over the map and a lot of branded center store is priced outrageously (above Publix); prices in drug are also much too high. Some private label center store is well priced and other than that scattered items are well priced but generally my perception of these stores is they have higher prices than Publix, but also have better specials than Publix and nicer deli and produce departments.

It appears to me they do not want to mess this format up so they are making very few changes and trying to make these changes hidden from the customer. I will agree with comparing Harris Teeter to Haggen (the original OR/WA Stores); they are quite similar. I think Harris Teeter has better volume stores and also is getting better velocity though. The comparison to Albertsons/Safeway is largely bogus since neither chain is particularly well liked by consumers (rated poorly in the Consumer Reports supermarket ratings for example) and also the fact that Albertsons has a fire under its chair to get away from paying money to Supervalu for shared services so taking on the Safeway systems and private labels was basically a "must do" regardless of how good or bad or compatible it all was/is.
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.
Post Reply