Kroger is acquiring Harris Teeter. This morning, the chains announced a definitive merger agreement under which Kroger would purchase all of Teeter's outstanding shares. The deal means that Kroger will add another 212 stores in the Southeast and mid-Atlantic markets.
"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," said David B. Dillon, Kroger's chairman and chief executive officer, 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 and a unique opportunity for our shareholders and associates. We look forward to bringing together the best of Kroger and Harris Teeter while continuing to operate and grow the Harris Teeter brands."
Thomas Dickson, Harris Teeter's chairman and CEO, said, "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, NC."
Kroger expects to achieve annual cost savings of up to $50 million over the next three or four years due to improved economies of scale as a result of the deal.
Harris Teeter has faced increased competition in recent years with expectations for more to come. As RetailWire reported in January, Publix has begun moving into Teeter's territory. The chain has also been under pressure from Walmart, which is running its price comparison ads against the grocery chain.