Publix Heading North and Straight for Harris Teeter

Discussion
Jan 12, 2012

Would anyone be surprised if Publix CEO Ed Crenshaw was somewhere singing, “In my mind I’m going to Carolina”?

According to several reports, Publix is opening new stores in suburban South Carolina, just across the border from Charlotte, NC, Harris Teeter’s home base. Publix has steadily grown its store base northward from Florida to include locations in Alabama, Georgia, South Carolina and Tennessee.

Harris Teeter is the largest “traditional” grocer in the Charlotte area with 22 percent of the market. It is seen as the most direct competitor to Publix, should it make the move into the Tar Heel State. While it is based in North Carolina, Harris Teeter is a substantially smaller business than the Florida chain. Teeter operates 206 stores compared to Publix with 1,046.

Supermarket Guru Phil Lempert told The Charlotte Observer, “If I were Harris Teeter, it’s really going to be a call to action, to be on your game. … As (Publix) has proven in Atlanta, they can go into a market and really do a bang-up job.”

Discussion Questions: Do you see Publix continuing to spread north into North Carolina? What will Publix’s entry mean for the chain and others, such as Harris Teeter, that are already operating there?

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19 Comments on "Publix Heading North and Straight for Harris Teeter"


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David Livingston
Guest
9 years 9 months ago
We all know Publix is one of the country’s premier supermarket operators. They have simply crushed Winn-Dixie, Albertsons, and Sweetbay in Florida to where those chains have some of the lowest sales per square foot performances in the country. They ran Winn-Dixie and A&P completely out of Atlanta. Publix uses Walmart as muscle to push weaker retailers into bankruptcy. Publix is one of the few retailers in the South that have actually gotten better since Walmart emerged. Harris Teeter runs good stores but they are not anywhere near the high volume and sales per square foot that Publix produces. Market studies I’ve seen show Harris Teeter being upscale and pretty but sales volume performance is average at best. So they will get smacked. Food Lion, well you can’t get much lower volume stores than those stores. I don’t know how they make money but they apparently do. They will probably remain status quo. Piggly Wiggly, Lowes, and other plain vanilla conventional stores will obviously get hurt as a superior new market entry comes to town.… Read more »
Richard J. George, Ph.D.
Guest
9 years 9 months ago

Publix is not the number one rated supermarket for no reason. The company does a terrific job in quality, selection and exceptional service (ask any Floridian). It also has developed leadership in prepared meals via its Apron’s Simple Meals program which not only offers featured meal ingredients in its Apron’s Meal Center but also provides cooking demonstrations and sampling of same. Publix also does a great job in the store perimeter. It is the number one source of customized wedding cakes in Florida.

Certainly, Harris Teeter must be ready. However, other mainstream food retailers lacking a significant point of differentiation need be concerned as well.

It is somewhat ironic that over 150 years since the beginning of the Civil War, we are witnessing a southern success story march north. I recommend everyone on the I 95 corridor pay attention to what happens in the Carolinas.

Ben Ball
Guest
9 years 9 months ago

I wouldn’t want to be pinned down to putting a probability on this — but two operators this good colliding often results in a peaceful combination or agreement for coexistence, after the initial skirmishes, of course.

Publix and H-T operate enough alike that this has to be at least a possibility.

Gene Hoffman
Guest
Gene Hoffman
9 years 9 months ago

For Publix, it may not be “North to Alaska” but up to North Carolina for sure. Publix is somewhat like a slow moving tsunami and North Carolina is in its wake. Harris Teeter is a very good operator, but mightier Publix is living in the moment and it will exercise its destiny which includes North Carolina. Then what?

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
9 years 9 months ago

I agree with Phil Lempert’s comments; this needs to be a call to action for Harris Teeter. I have had the pleasure of working directly with the team at Harris-Teeter last year on a special project. They have an outstanding team and their stores are impressive. Although the store count is smaller than Publix, Harris-Teeter is going to be a tough competitor. What I find interesting is both retailers have done an outstanding job with their private label brands. Publix will most certainly run their very successful promotion that give away a private brand item when you buy the competitive national brand. This program drives trial of their private brand. Although expensive for Publix, it has been effective.

Harris-Teeter will need to create their own strategy to protect their loyal customers. Some ideas could include a similar private label campaign with a Harris-Teeter twist or possibly an enhanced loyalty program that offers more than just savings in store.

Dr. Stephen Needel
Guest
9 years 9 months ago

Publix did a great job of entering Atlanta at the same time Harris Teeter was trying to enter. Publix won. While they won’t have an easy time of it, they’ve shown they can enter a market and move long established retailers out (goodbye Winn-Dixie and Bruno’s from Atlanta).

Bill Emerson
Guest
Bill Emerson
9 years 9 months ago

This is surely an exploratory move for Publix. It will no doubt heat up the competitive environment in the Charlotte market as Publix is a very well-run operation.

The only glimmer of hope for Harris Teeter is the consistently poor record of success for otherwise successful grocers moving into well-established markets. Schnucks is also a very well run company that ventured into the Memphis market. They came, they struggled, they left.

We’ll see what happens.

Cathy Hotka
Guest
9 years 9 months ago

Cue the threatening music from Jaws!

My colleagues nailed it. Publix creates a delightful shopping experience that many other grocers can only hope to match. Incumbent Carolina grocers are gonna need a bigger boat.

Hayes Minor
Guest
Hayes Minor
9 years 9 months ago

I have a love affair for very different reasons with both grocery stores. That said, I think the competition will only enhance the shopping experiences at both places in the Carolinas. Harris Teeter (as several others have mentioned) will need to up their game and Publix will need to bring the big guns. Unlike several of the other comments, I wouldn’t bet the house on Publix blowing Harris Teeter out of the water. Harris Teeter knows they are on the way and will likely be ready and waiting. If not, it’s their loss, and a real shame. Only time will tell.

Roger Saunders
Guest
9 years 9 months ago
Publix’s ESOP permits them to methodically and deliberately make their expansion at their own pace. As you walk/shop their stores, it is obviously a well-run retailer with friendly and courteous associates. Those associates are well trained, with attention to the details of their stores. Publix is also comfortable with serving consumers, like those in Harris Teeter stores — an equally fine retailer. Based on the BIGinsight Consumer Intentions & Actions (CIA) Survey, Harris Teeter shoppers have a higher household income and slightly higher education levels (driven by their locations in larger Carolina cities) than Publix, but other demographic features are the same — Age, Home Ownership, Presence of Children, etc. Both stores have shoppers who freely move about other shopping channels, even though they choose to call one store the one they shop MOST OFTEN. Walmart and Costco are mentioned by 19% – 20% of both Harris Teeter and Publix shoppers as stores they frequent for groceries. Fully 59.3% of Harris Teeter shoppers, and 62% of Publix shoppers have shopped a Walmart in the past… Read more »
Dan Conry
Guest
Dan Conry
9 years 9 months ago

Publix seems to be able to conform to the markets they enter by matching the offerings (double coupons, specialty departments, one cent deals and local produce purchases) with ease. They have made a stand on giving great customer service and doing little things to make customers like to shop the stores.

Publix at times seems to have issues with staying in stock on key items and on advertised products — not sure if that is due to centralized ordering or stores just not doing a good job of predicting sales trends.

Advice for Harris Teeter – stay in stock ( do not disappoint customers) and kick up all the little things (carry out to car, special promotions and smiling faces) and you should do well. Remember pricing will always drive customers in the door but it is how good you are that keeps them coming!

Mark Burr
Guest
9 years 9 months ago

Publix will make Harris Teeter better. If not, Harris Teeter is in for a real challenge. In any market, there is only so much of the pie to slice. Publix has to take their slice from someone. My guess is that it will be Harris Teeter, not the other options.

“Some gotta win, some gotta lose.”

There is some possibility that if they both get sharp in their efforts the shares of the market could come from continuing to erode Walmart’s declining same store sales. That’s not an easy thing to do. However, if the entry makes them both do better at what they do, it is possible.

The winner in the marketplace in Charlotte, NC is the consumer.

Ed Rosenbaum
Guest
9 years 9 months ago

I am in agreement with the comments my colleagues have made. Publix is large and smart enough to know what they are doing as they continue their northern march. I can see Virginia being Publix northern frontier.

My concern is Publix has become the pricier supermarket in the South Florida market where they have a very strong foothold. So much so that the best times to shop there is sales and buy one get one free. They are not your place of choice in this area if money is an issue. I would regrettably place them third behind Walmart and possibly Target.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
9 years 9 months ago

When Hitler invaded Russia during the winter, the Russian army essentially backed up, removed all food from the German army’s route, and allowed them to slog across huge portions of the largest country in the world in the cold with no food. Hitler retreated after Russian shock troops began flanking them in their weakened condition and attacking them with superior numbers and resources.

Hitler’s supply lines were stretched beyond their ability to serve his troops, and historically this principle has applied to supermarket chains whose reach exceeds their grasp. Harris Teeter is not the only impediment to entry into SC by Publix. Ever heard of BI-LO, which recently purchased Winn-Dixie to create a 690-store chain with several strategically-located distribution centers? I’ve directed the marketing for BI-LO and consulted for both Publix and WD, and I caution pundits and observers who underestimate the resolve and competitive spirit of BL and WD. Don’t hand SC over to Publix just yet.

Ed Dennis
Guest
Ed Dennis
9 years 9 months ago

Being familiar with both concepts, I can assure you that Publix will thrive in a market competing against Harris Teeter. I’m not saying that Harris Teeter is a bad merchant. They aren’t, in fact they have done a great job with their private label, but they rely on an affluent shopper who feels like they are being catered to. Publix also does a great job in this area and will actually provide an alternative to the affluent shoppers who have been forced into Harris Teeter by other Charlotte concepts like Food Lion and Walmart that cater to the food stamp crowd. Publix comes very close to Walmart/Food Lion pricing and I am not sure Harris Teeter could survive if they had to lower their prices 5%. In my area, HT sells 2L Coke for $1.99, Publix for $1.59 and Walmart for $1.27. All things being equal, who would pay 40 cents more?

William Passodelis
Guest
9 years 9 months ago

Publix is such a great and true grocer. They know their business and customers so well that I can not see anything else but success as they push north. I am certain that they have done due diligence and studied what they must do and provide to the new customer base. When you combine that with their basic model of how they run their business, I can not see anything but continued success.

If you are a retailer and have never experienced Publix in person, it is worth a trip to Florida just to experience and witness their excellence.

A P
Guest
A P
9 years 6 months ago

Yes, it only makes sense. Harris Teeter is highly overrated and not even close to being like Publix. HT has their customers brainwashed into thinking the VIC card saves you money. At Publix if it is on sale you get it on sale without a need of a card. Publix is a better place to work and hands down has the best deli and bakery. HT has deli and bakery combined and has the worst products in those two departments. Publix should have moved into NC a long time ago.

Pam Smith
Guest
Pam Smith
9 years 2 months ago

I love the service and quality Publix offers. When I lived in Florida it is the only place I shopped. Currently residing in a small town in Alabama, they have not arrived here yet. I can not wait to get a Publix in my town.

H Hayes
Guest
H Hayes
9 years 1 month ago

Western North Carolina is ripe for Publix. Harris Teeter has abandoned the area in order to protect the Charlotte market. The Western North Carolina areas are left with Lowes Foods and Food Lion. Food Loin is actually doing a much better job that Lowes Foods at this time. Food Lions offerings are very limited though, and Lowes Foods is competing against themselves. The consumer loses in this scenario.

I believe Lowes Foods has tarnished its image with the Harris Teeter and Lowes Foods swap that occurred in June. People are not shopping there. I think a Publix or a Whole Foods would do well on strategically placed areas in western North Carolina.

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