Harris Teeter sold to Kroger | News
MATTHEWS, NC (WBTV)- A major change is coming to Matthews-based Harris Teeter after one of the largest grocery chains in the world says it will buy the company.
Kroger Co. announced on Tuesday that it has agreed to buy Harris Teeter Supermarkets Inc. for about $2.44 billion in cash.
Cincinnati-based Kroger says they will keep the Harris Teeter brand and the company will continue to be based in Matthews.
"I'm excited about that," said shopper Elizabeth Fernandez. "It can only make it better with Kroger having a national name," she said. "Maybe they'll lower prices a little bit at Harris Teeter," Fernandez said, echoing the same comments we heard from several shoppers at the Plaza Midwood location.
Other shoppers also told us they hope the "hometown feel" of Harris Teeter doesn't go away."Harris Teeter is the Carolinas," said Elizabeth Scott. "You don't grocery shop anywhere else," she said.
Harris Teeter has a tradition that goes back to 1936 in Charlotte. It currently operates 212 stores across the southeast and in Washington, D.C. It also has two distribution centers and a dairy facility all in North Carolina.
Kroger currently operates 2,419 supermarkets in 31 states.
UNC-Charlotte professor Carol Swartz says the merger is about competition and cost. She says Harris Teeter is considered a small regional player when compared to major chains like Kroger, Walmart and Target.
By consolidating with Kroger, she says Harris Teeter can stay competitive, while continuing to operate in its hometown.
Swartz added it would be wise for Kroger executives to take their time before changing the Harris Teeter model and learn all they can. "Keep the banner, you can't go back to the original culture," she said.
Kroger Co. says it expects the deal to save between $40 million to $50 million over the next three to four years.
Harris Teeter's fiscal 2012 revenue totaled about $4.5 billion. Kroger reports more than $96 billion in annual revenue.
Kroger will pay $49.38 for each of its rival supermarket chain's shares. The price represents a 2 percent increase over the company's Monday closing stock price. The deal has been approved by both companies' boards.
Kroger will finance the deal with debt and plans to assume Harris Teeter's outstanding debt of about $100 million.
In a conference call Tuesday morning, Kroger officials said the popular VIC customer loyalty program would remain in place at Harris Teeter.
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