July 10th, 2013
Yesterday, Kroger announced a $2.4 billion buy of North Carolina based grocery store Harris Teeter. The buy adds a high-end grocery store known for fresh produce and prepared foods to the Kroger portfolio. Kroger’s geographic presence also increases in the acquisition of Harris Teeter’s mid-atlantic and southeast stores, which it sees as a high-growth area.
The buy out was the subject of conversation with many of my friends yesterday. As a native of the southeast, I have high brand loyalty to Harris Teeter. Many that I spoke with were concerned that their beloved Teeters would convert to Krogers.
But that doesn’t seem to be the case, much to our relief. Kroger, like many parent companies, owns a portfolio of stores from Fred Meyer to Ralphs. Communications thus far imply that Kroger will maintain the Harris Teeter name, employees, and growth plan. Kroger hopes to benefit from Harris Teeter’s current market, and Harris Teeter hopes to benefit from Kroger’s purchasing power. That’s an arrangement that we all can appreciate.
This is a common theme across industries, which we see reflected at the Sustainable Packaging Coalition. Membership is based on the parent company. Once the company joins, all business units become members. Parent companies range from centralized control to highly independent business units to a combination of both. Acquisitions change our membership composition and revenues, and require a deeper dive in to who owns whom and how we can best work with the parent companies or business units.