Whole Foods is in town. Publix is coming. Food Lion is rebranding. Wal-Mart is refocused. The threats are all around Harris Teeter, but its success continues.
It’s what industry experts have come to expect from Charlotte-based Harris Teeter and its president and chief operating officer, Fred Morganthall, who earned high marks for steering the company profitably through the recession and now is picking up the pace on expansion and growth.
“I think he’s a very strong strategic leader,” Karen Short, an analyst for BMO Capital, New York, told SN. “In the worst possible environment, when every single supermarket was seeing double-digit declines in EBITDA and earnings, Harris Teeter grew EBITDA. You can’t do that unless you have very strong leadership and very strong execution.”
Harris Teeter absorbed all of the above threats — not to mention a still-rocky economy — during the last year, while making a pair of strategic moves that could trump those of all of their competitors. In November, the company, then known as Ruddick Corp., realized $180 million through the sale of its American & Efird textile business, rechristening itself as Harris Teeter Supermarkets, a company focused solely on food retail. More recently, some of the proceeds from that deal went to Lowes Foods as part of a store-swap arrangement with Lowes that would fortify Harris Teeter’s positioning in its home Charlotte market, give it an opportunity to pursue a new store format at some of those sites, and exit some slower-growing rural markets.
Morganthall in the meantime also finished his first year as chairman at Food Marketing Institute. In an interview with SN earlier this year, he highlighted some recent accomplishments of the association, including the agreement to combine the top-level conferences of FMI and Grocery Manufacturers Association at next year’s FMI Midwinter Conference.
Harris Teeter, which specializes in well-appointed, clean stores with strong perishables presentations and good values through its loyalty card, recorded sales of $4.3 billion during its last fiscal year. Through the first half of this fiscal year, sales totaled $2.2 billion, a 7.5% increase from the same period last year.
Harris Teeter has ambitious growth plans beyond the Lowes acquisition. Capital expenditures for fiscal 2012 are planned to total approximately $215 million, which will go toward four new stores and 10 major remodels.