Retail News Breaks
Kroger grows pharmacy base with Harris Teeter buy
July 9th, 2013
CINCINNATI and MATTHEWS, N.C. – The Kroger Co. has lifted its pharmacy count over the 2,000 mark with its $2.5 billion deal to acquire Harris Teeter Supermarkets Inc.
With the acquisition, announced Tuesday, Kroger adds Harris Teeter's 212 supermarkets — 147 of which have pharmacies — in eight Southeast and Mid-Atlantic states and the District of Columbia to its base of 2,419 supermarkets, including 1,948 in-store pharmacies, in 31 states.
Once the deal is completed, Kroger will have 2,631 supermarkets, with 2,095 pharmacies, in 34 states and the District of Columbia. The company also operates 784 convenience stores, 322 fine jewelry stores, 1,182 supermarket fuel centers and 37 food processing plants in the United States.
The acquisition also will lift Kroger's annual revenue over the $100 billion mark. The company generated total sales of $96.8 billion for its 2012 fiscal year ended in February. Adding Harris Teeter's fiscal 2012 sales of about $4.5 billion, Kroger's overall sales come in at $101.3 billion, including an estimated $8.2 billion in pharmacy sales.
"Harris Teeter is an exceptional company with a great brand, friendly and talented associates, and attractive store formats in vibrant markets run by a first-class management team," Kroger chairman and chief executive officer David Dillon said in a statement. "They share our customer-centric approach to everything we do — from store format and merchandising to innovative loyalty programs. This is a financially and strategically compelling transaction."
Plans call for Harris Teeter to operate its stores as a Kroger subsidiary that will continue to be led by key members of the Harris Teeter senior management team. The grocers said there are no plans to close stores, and Harris Teeter staff will continue to have employment opportunities with both companies. Kroger's headquarters will remain in Cincinnati, and Harris Teeter's headquarters will stay in Matthews, N.C.
Harris Teeter joins Kroger Co.'s roster of two dozen supermarket banners, including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry's, King Soopers, QFC, Ralphs and Smith's. The Harris Teeter stores are located mainly in high-growth markets, vacation destinations and university communities in North Carolina, Virginia, South Carolina, Maryland, Tennessee, Delaware, Florida, Georgia and the District of Columbia. Harris Teeter also operates distribution centers for grocery, frozen and perishable foods in Greensboro and Indian Trail, N.C., and a dairy facility in High Point, N.C.
"We are excited about becoming part of The Kroger Co., one of the best food retailers in the U.S., while maintaining the Harris Teeter banner, our management teams, our new store growth plan, our distribution and manufacturing facilities in North Carolina as well as our headquarters in Matthews, N.C.," stated Thomas Dickson, chairman and CEO of Harris Teeter. "As part of Kroger, Harris Teeter will be well-equipped to continue to provide our customers outstanding quality and customer service as well as excellent value in an increasingly competitive market."
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