Roger Beahm Discusses Retail Competition in Supermarket News

10.6.2012 Article, Business Analytics, Faculty News, Retail

N.C. Faceoff Will Test Publix and Harris Teeter
Reposted from Supermarket News | by David Orgel

When a retailer invades a new market populated by an entrenched competitor, it often leads to a price battle, or a faceoff in which one operator clearly outshines the other in service or quality.

That's not likely to happen when Publix Super Markets rolls into Charlotte, a stronghold of Harris Teeter, which is why the outcome is so hard to predict.

Instead, this will be a clash of well-regarded, upscale operators and won’t be a quick slam dunk for either.

Publix recently announced plans to build a store in Ballantyne, N.C., and add a Charlotte-based division as a springboard to growth in the state. At stake is Publix's hopes to expand further northward, and Harris Teeter's defense of its territory.

Some give an edge to the invader. "If there’s one point of difference, it's the customer-service side of the equation," said Richard George, professor of food marketing at Saint Joseph's University, Philadelphia.

"Publix might win that part of the battle."

Roger Beahm, executive director, Center for Retail Innovation, Wake Forest University, Winston-Salem, N.C., said, "I believe Publix will compete quite effectively versus Harris Teeter for the customer’s hearts – not just their heads."

Beahm said Publix will bring "higher-quality products, an enjoyable in-store experience, and friendly, personalized service."

However, Harris Teeter not only has a long history in the area, but it's also been busily preparing for a Publix entry with renovations, an additional banner and an asset swap with Lowes Foods that brought Harris Teeter 10 new units in Charlotte.

"The store swap was very smart for Harris Teeter," said Andrew Wolf, managing director for BB&T Capital Markets, Richmond, Va. "If those stores had gone to Publix you'd really have a division."

Another knowledgeable source told me Harris Teeter is prepared to pull out all the stops to avoid giving ground to Publix.

So what will happen? The first Publix store opening is probably at least a year in the future. It's likely the other area players, including Food Lion, Wal-Mart and Bi-Lo, will take some of the hard hits. Publix will be under pressure to avoid early mistakes that could shape its local reputation.

There's at least one positive here. After years of economic downturn, it's nice to see a battle likely to rest on factors other than just price. That's when good supermarkets can really shine.