The Baltimore Business Journal reports that at a London investor conference this week, Kroger CFO J. Michael Schlotman said that the company's new Harris Teeter division gets a little more credit for pricing than it deserves: "The actual pricing at Harris Teeter, going into the time of the merger, was a little worse than the customer’s perception of the pricing,” he said, noting that Kroger knew it would have to invest in lower prices for the chain.
"At the time of the merger," the Journal writes, "Kroger said it expected to achieve cost savings of $40 million to $50 million from the deal, largely from enhanced scale and other efficiencies, within the next four years. Those synergies will allow it to reinvest in Harris Teeter, including pricing, Schlotman said.
In addition to investing in lower prices, Schlotman told the conference, the company also "sees opportunities to grow Harris Teeter's footprint in the Washington, D.C., and Baltimore markets." It currently has more than 230 stores in eight states and the D.C. area."
"At the time of the merger," the Journal writes, "Kroger said it expected to achieve cost savings of $40 million to $50 million from the deal, largely from enhanced scale and other efficiencies, within the next four years. Those synergies will allow it to reinvest in Harris Teeter, including pricing, Schlotman said.
In addition to investing in lower prices, Schlotman told the conference, the company also "sees opportunities to grow Harris Teeter's footprint in the Washington, D.C., and Baltimore markets." It currently has more than 230 stores in eight states and the D.C. area."
- KC's View:
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I will be very interested to see if Kroger/Harris Teeter see real opportunities to move up the east coast into places like New Jersey, New York and New England. They're not there, and I wonder if Harris Teeter could be an engine of growth for Kroger in the region.
