Publix to expand in Charlotte with first N.C. supermarket
The grocer, a tough competitor, will open a Ballantyne store in 2014 – its first foray into North Carolina
Reposted from Charlotte Observer | by Ely Portillo
Florida-based supermarket company Publix plans to open its first Charlotte store in early 2014, adding a fierce competitor to the region’s upscale grocery market, the retailer said Wednesday.
The store, at Providence Road West and Johnston Road in Ballantyne, is the first step in Publix's expansion into North Carolina. Publix is the largest new entrant into the Charlotte grocery market in years.
Publix said it plans to expand further in the state. Company executives said Publix will open a Charlotte division, with a divisional vice president and a leadership team based in the city, to oversee the expansion.
"North Carolina is the No. 1-requested state for us to enter," Publix spokeswoman Maria Brous said. The exact opening date for the Ballantyne Publix will depend on permitting and construction times. Brous said the store would anchor a shopping center that also includes a Walgreens and a future Fifth Third bank.
Dee-Dee Harris and her Harris Land Company are developing the site. Harris told the Observer that her company has been in talks with Publix about building a supermarket there for three years.
Publix has been openly inching closer to Charlotte since it announced plans to build two stores in South Carolina, just across the state line. Those stores, in Fort Mill and Indian Land, are both set to open in October. The Indian Land supermarket site is just six miles from Publix’s planned Ballantyne location.
Supermarket experts said Publix is viewed as a tough competitor, one that has largely succeeded in beating other grocers when they go head to head. Competition from Publix, experts say, contributed to Food Lion's recent decision to close all of its Florida stores and to Winn-Dixie's bankruptcy.
Publix plays to win
"When they enter a market, they enter it not to be just another player," said Robert Higgins, executive director of the Academy of Food Marketing at St. Joseph’s University. "Publix is a threat wherever they go."
And Publix is expected to compete for the same middle and upper-middle class customers as Harris Teeter, making Publix the biggest emerging competitor for the Matthews-based company, experts said.
"Publix is going to try to go in and basically try to replace (Harris Teeter) as the quality, service grocer," said Wisconsin-based supermarket location analyst David Livingston. "Obviously, Publix smells weakness."
Harris Teeter's turf
The retailer will be entering a Harris Teeter stronghold: The company, founded in Charlotte, has more than 50 stores and 7,000 employees in the region.
"New competition is a constant in our business," said Harris Teeter spokeswoman Danna Jones, via email. "With the growth of Charlotte, it is no surprise that Publix would choose to compete here." She said Harris Teeter will continue investing in improving its area stores and charities in the community.
In August, Harris Teeter reported that its profits for its most recent quarter fell by more than half, to $15.8 million, compared to the same quarter a year ago, because of higher expenses stemming from the purchase of Lowes Foods locations in Charlotte. Revenue increased 4.6 percent for the quarter, to $1.15 billion.
Brous, the Publix spokeswoman, said the company looks at all other food companies, including restaurants, as competition.
"We always say our competitors are anyone fighting for the same 'share of stomach,'?" Brous said. "We’ll look at everybody as a competitor."
Wednesday's announcement is the latest in a flurry of changes in the Charlotte grocery market:
Earlier this year, Harris Teeter and Lowes Foods swapped 16 stores with each other, a move that spelled Lowes' exit from Charlotte and a major consolidation of Harris Teeter's position.
Harris Teeter is also in the midst of multimillion-dollar renovations of some of its flagship stores, including locations on Central Avenue, and at Providence and Queens roads.
Natural foods retailer Whole Foods opened its first Charlotte store in the SouthPark area this summer.
And on Monday, Harris Teeter announced it would open two upscale specialty stores called 201central next month in Huntersville and Wesley Chapel, selling wine, beer, cigars, bulk foods and more.
Publix, founded in Florida in 1930, spent more than six decades growing in its home state. The privately held, employee-owned supermarket chain didn’t open its first store outside the state, in Savannah, Ga., until 1991. While there are now more than 300
Publix stores outside of Florida, the majority, 752, of the chain's stores are still located there. The company’s northernmost distribution center is in Lawrenceville, Ga.
'We know Publix well'
Harris Teeter and Publix do compete directly in some places, such as Charleston and Nashville. Harris Teeter said it competes successfully with Publix in those markets. "We know Publix well," Jones said in her email.
Competition from Publix, as well as Kroger, did contribute to pushing Harris Teeter out of Atlanta after the Matthews retailer attempted to break into that market in 1993, according to media accounts. There were even rumors in the 1990s that Publix would acquire Harris Teeter, but those did not pan out.
But don't expect an all-out price war as competition heats up, analysts cautioned: Publix, like other upscale retailers, competes largely on its level of service, upscale items, and popular features such as its deli and prepared foods.
"Publix is positioned at a higher end, with selling on the basis of providing consumers an experience," said Roger Beahm, director of the Wake Forest University Center for Retail Innovation in Charlotte. While they use sales and lower prices on some leading goods, like most retailers, Publix tries to distinguish itself mostly through its customer service.
"They try to stay price-competitive with the traditional stores, but they’re not going to beat Wal-Mart," said Livingston.
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