Charlotte natives and those new to the city have probably noticed that the local grocery market scene is becoming increasingly crowded. Publix stores sit across the street from rival Harris Teeters. Wal-Mart Neighborhood Markets spring up left and right. Specialty stores like Trader Joe's are big draws but are slower to add new stores. European grocers announce big plans for growth in Charlotte.
Mecklenburg County has a population of just over 1 million, a milestone the area reached two years ago. As Charlotte’s population booms, so too has the number of supermarkets in the area. And those already here are fighting harder than ever for customers’ dollars.
Evidence of that competition can be seen in the sheer number of stores right now, in grocers’ investment in their existing locations, in consolidation of grocery chains and in new players entering the scene.
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Two grocers with roots in the Charlotte region, Harris Teeter and Food Lion, are the area’s largest by market share. Harris Teeter is the homegrown retailer that started in Matthews in the 1930s as two separate stores – one Harris, one Teeter. Food Lion opened in Salisbury in 1957 as a store called Food Town.
Accounting for the fact Supercenters, Neighborhood Markets and Sam’s Clubs are all owned by Wal-Mart, the Arkansas-based giant is technically Charlotte’s biggest grocer, though Supercenters rank as the area’s No. 3 supermarket chain, according to Chain Store Guide. In recent years, the company has been expanding its Charlotte presence with Neighborhood Markets, its own version of traditional grocery stores.
Competition has heated up as Florida-based Publix began expanding into North Carolina with a Ballantyne store in early 2014. Over the last year, most grocers in the Charlotte area have been losing market share as more competitors enter the market. Publix was one of the few to gain market share, and ranks as Charlotte’s No. 4 largest grocer.
With the spread of grocery chains in the Charlotte area has come another trend: Consolidation.
In 2014, Cincinnati-based Kroger completed its $2.5 billion acquisition of Harris Teeter. Kroger has been adding a number of its own features to Harris Teeter stores, including gas stations and craft beer growlers. It’s also lowered prices on thousands of items following the merger.
Last summer, Food Lion’s parent company, Delhaize, agreed to a merger with Ahold, a Dutch retailer that operates the U.S. supermarket chain Giant. And earlier this year, Greensboro-based Fresh Market, which has six stores in Charlotte, was bought by Apollo Global Management for $1.36 billion.
Other grocers have scaled back their Charlotte presence. In 2012, Harris Teeter swapped local stores with Lowes Foods, giving Harris Teeter more Charlotte stores and effectively removing Lowes from the local market.
As competition has heated up, several grocers have started spending more to stay relevant to customers on improvements like adding more in-store dining options, doing store renovations and experimenting with different store formats. Supermarket analyst Phil Lempert has called traditional 45,000 square-foot grocery stores “dinosaurs” that need to innovate to stay alive.
Food Lion, for example, earlier this year said it is spending $215 million to renovate 142 Charlotte-area stores, a project that includes new store decor, price cuts and new employee training.
Harris Teeter has also started upgrading some of its most prominent stores around the Charlotte area. At its Cotswold location, for example, the grocer is planning major renovations including a second story, a wine bar and outdoor seating.
The grocer is even building its largest-ever store in Pinehurst, one that at over 78,000 square feet, is nearly twice as large as the typical Harris Teeter.
Grocers are also investing in technology to give themselves an edge. Wal-Mart, for example, started offering free store pickup for online orders in Charlotte last fall. And grocery delivery companies like Instacart are popping up in markets like Charlotte where supermarkets offer online shopping.
Look out for a number of low-cost grocers that have said they’re making their way into the Charlotte market.
European grocery chain Lidl plans to open its first store in the Charlotte market in 2018 and has said it’s looking at locations in South End, Monroe Road, Lake Norman and Indian Land, among other areas. Lidl also said last summer that it will open a regional headquarters in Alamance County, about 55 miles northwest of Raleigh
Another discount German grocer, Aldi, has said it would invest more than $3 billion over five years to open 650 new stores across the U.S.
On the higher end, Whole Foods opened its first Charlotte location in South Park in 2012 and construction is underway at a new one in uptown Charlotte. And the popular New York-based supermarket Wegmans has said it is eyeing its first North Carolina location in Cary.
Katherine Peralta covers retail business for the Observer.