Charlotte’s grocery wars: Who’s up, who’s down?
Jenna Greenwood, a Shipt Shopper, shops at the Ballantyne Harris Teeter earlier this year. Diedra Laird dlaird@charlotteobserver.com
It seems like almost everywhere you look in the booming parts of Charlotte, a grocery store is either under construction or undergoing a renovation.
The city’s long-running grocery wars are heating up, with Florida-based Publix muscling in on hometown grocer Harris Teeter’s turf and low-cost chains like Aldi pressing ahead with expansion. The intense competition shows no sign of letting up – and that could be good news for shoppers.
Matthews-based Harris Teeter is once again the No. 1 supermarket chain in the Charlotte region by market share, according to a tally of 2016 revenue from sales-tracking firm Chain Store Guide. Wal-Mart Supercenters are the area’s No. 2 grocery destination, and Salisbury-based Food Lion is No. 3.
Despite their high rankings, Wal-Mart and Food Lion both saw their market shares slip over the last year. Harris Teeter, on the other hand, grew its market share. So did Publix, which entered the market in 2014 and competes closely with Harris Teeter. Publix, based in Lakeland, Fla., is Charlotte’s No. 4 grocery chain.
Phil Lempert, a supermarket analyst, says the competition in Charlotte’s grocery market is going to get even hotter, as discount European chains like Aldi and Lidl open new stores in the area. It could be especially true as Publix wraps up construction on several more stores around Charlotte, he said.
“You’re going to see a price war,” Lempert said of the phenomenon of retailers beating out their competitors with low prices. “That’s great news for consumers, not such great news for retailers themselves,” who are already pressured by tight margins.
The population of the Charlotte metro area has increased by 2.35 percent over the last year, according to Chain Store Guide’s report, but total area grocery sales surged by 4.75 percent over the same period. Shoppers could be spending more as the area’s economy improves, as they’re faced with more options and sparkly new amenities, and as grocery delivery services like Shipt launch in Charlotte.
Still, as the Observer reported last month, lower-income areas are left behind as grocery wars heat up elsewhere in the city. Supermarkets have not been expanding into certain areas, such as the West Boulevard corridor, where the only full-service grocer for miles is a Wal-Mart Supercenter.
On the other end of the price spectrum, Whole Foods and Fresh Market command a much smaller – 1 percent and 0.9 percent, respectively – share of Charlotte’s grocery market, ranking them at No. 16 and No. 17. That could start to change for Whole Foods, which is building its third area location uptown.
Harris Teeter and Publix
A local businessman named W.T. Harris opened the first Harris Food Store on Central Avenue in 1936. The chain, now called Harris Teeter and based in Matthews, remains the hometown favorite.
Over the last year, Harris Teeter grew its market share in the area to 20.1 percent from 19.4 percent, according to the report.
Grocery giant Kroger bought Harris Teeter in early 2014 for $2.5 billion. Since then, it’s been adding fresh amenities to its stores like wine bars, growlers, gas stations and more food-service offerings, an effort to make the chain an even more attractive destination.
Harris Teeter spokeswoman Danna Robinson pointed to Charlotte’s “thriving economic climate and growing population” to explain why it and other retailers are expanding in the city.
“Harris Teeter is always reviewing new real estate opportunities to drive growth and strengthen our brand in existing and new markets. We are thrilled with the opportunity to re-invest in our home market to bring our shoppers new, attractive and convenient Harris Teeter locations,” Robinson said.
In multiple spots throughout Charlotte, including South End, Cotswold and Prosperity Village, Publix is building stores close to Harris Teeter, and vice versa. That’s because their prices are similar, and they compete for the same customers, experts say.
Last year, Publix grew its market share to 7.2 percent from 6 percent the year prior, Chain Store Guide’s report shows.
“The overwhelming response from our customers shows that they appreciate quality products and service,” spokeswoman Kimberly Reynolds said.
Wal-Mart
Wal-Mart is technically Charlotte’s biggest grocer, when the market shares for its Supercenters, Neighborhood Markets and Sam’s Club stores are added together.
Supercenters are the area’s second-biggest grocery destination, with 18.6 percent of the market, down from 19.8 percent a year prior. Neighborhood Markets are Wal-Mart’s version of a traditional grocery store. While they grew their market share in Charlotte last year, Wal-Mart has since announced it is closing several Neighborhood Market locations, including the one on Independence Boulevard.
“Over the next year, we will further our investment in the Queen City with plans to save our customers time and money, invest in e-commerce and continue to improve our existing stores by remodeling several Charlotte area locations,” said Phillip Keene, Walmart’s director of communications for the Southeast.
Wal-Mart-owned Sam’s Club, alongside competitor Costco Wholesale, has been gradually losing market share in Charlotte over the years. They are the No. 6 and No. 7 grocers in the city, respectively. Meanwhile, BJ’s Wholesale Club, a competitor ranked No. 8, has been growing its local market share. BJ’s opened in the Metropolitan in late 2015.
Food Lion
Food Lion was the area’s No. 3 grocer last year, down from No. 2 the year prior. Food Lion saw its market share decrease to 18.1 percent last year from 19.1 percent, according to the report.
Late last year, Food Lion wrapped up a $215 million renovation project of its 142 supermarkets in the Charlotte area. The store redesigns include new features like easy-to-navigate formats, new decor, lower prices on staples like chicken and produce and expanded product assortments.
Spokeswoman Christy Phillips-Brown said the grocer is pleased with its performance in the Charlotte market, as well as with its recent investment.
“We have been very pleased with our customer feedback about our new stores, which makes shopping easier, and ensures we are providing products that are fresh and affordable,” Phillips-Brown said.
Food Lion could face competition from the growth of German grocers Aldi and Lidl in Charlotte in coming months and years. The two supermarket chains have stores that are about half the size of a typical 40,000 square-foot store like Food Lion, but they also offer low prices and quality, Lempert said.
Lidl could be opening its first Charlotte stores as early as this summer. Aldi has said it’s spending $3 billion through 2020 to open 650 new stores across the U.S.
“(Aldi and Lidl) are game changers,” Lempert said.
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