Kroger executive praises Harris Teeter after acquisition
06/19/2014 1:47 PM
06/20/2014 7:25 AM
Five months after completing its acquisition of Matthews-based Harris Teeter, Kroger executives said Thursday that the integration of the companies is going well.
“We’re spending time with Harris Teeter and learning a lot about how they connect with customers,” Rodney McMullen, CEO of Cincinnati-based Kroger Co., told analysts during a conference call. “Their store standards and fresh foods are world-class.”
Since the $2.5 billion deal was completed in January, Kroger has said it is lowering prices on thousands of items at its Harris Teeter stores, most of which are marked with bright green signs. The price reductions are being funded with cost savings as a result of the deal. Kroger expects to save $40 million to $50 million a year by combining the two companies’ operations.
“Our cultures are a great fit, which makes our integration work rather easy,” McMullen said. Kroger executives also said they plan to “aggressively support” Harris Teeter’s expansion.
Executives would not break out Harris Teeter’s individual performance but said the company was on budget and meeting all of their expectations.
For its first quarter, Kroger reported sales of $33 billion, up 9.9 percent from the same quarter last year and beating Wall Street’s expectations. The results were boosted by the inclusion of Harris Teeter for the first time. Kroger’s profits totaled $501 million, up 4 percent from last year.
Kroger shares rose more than 5 percent on the news, closing at $49.66.
In Charlotte, Harris Teeter’s home turf, Florida-based Publix Super Markets is continuing its expansion, with plans to open more than a dozen stores. Wal-Mart is also opening more grocery stores in the Charlotte region, intensifying competition for shoppers’ dollars.
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