Kroger To Purchase Harris Teeter Supermarkets
The nation's largest grocery store chain, Kroger Co., is expanding with the $2.4 billion acquisition of the grocery store chain, Harris Teeter Supermarkets. The addition of the chain will increase the number of states that Kroger Co. operates in by three, expanding the Company’s reach to 34 states.
The deal will be the fourth-largest acquisition in North American for a food retailer in the past decade, and Kroger's biggest takeover since 1998, when it bought Fred Meyer for over $12 billion, according to Bloomberg.
Kroger is inheriting a cluster of semi-new stores that the Company won't have to remodel or upgrade in prime locations. Harris Teeter has 212 stores in what Kroger stated as attractive, high-growth markets in the Southeast and Mid-Atlantic and about $4.5 billion in revenue for fiscal 2012.
"This is a financially and strategically compelling transaction and a unique opportunity for our shareholders and associates," Kroger Chairman and CEO David Dillon said in a statement.
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The deal puts Kroger closer to $100 billion in sales annually, an achievable goal that CEO David Dillon vowed at the Company's annual meeting in June. The Company reported $96.8 billion in revenue in the fiscal year ending February 2.
Kroger is second behind Wal-Mart in retail sales in the United States, larger than Target, Home Depot and CVS, though not as well known as some brands because the Company operates in different regions under different names.
Following in Wal-Mart’s footsteps, Kroger is more than a grocery store chain, the Company also runs supercenter-style merchandise and food stores, including the Fred Meyer chain in the Northwest. Still based in downtown Cincinnati, Kroger was founded in the 19th century and is still a big deal to locals.
Kroger forecasts the acquisition will bring a cost savings of $40 million to $50 million over the next three to four years. Harris Teeter CEO Thomas Dickson called Kroger "one of the best food retailers in the U.S." and said the company's plans for growth will continue after the merger.
Together, the companies will operate 2,631 supermarkets and employ over 368,300 associates across 34 states and in Washington, D.C. Harris Teeter operates 212 stores in eight southeastern and mid-Atlantic states and Washington DC, along with a pair of distribution centers and a dairy facility in North Carolina.
Kroger operates 2,419 stores in 31 states. In addition to its flagship brand of supermarkets, it also owns Ralphs, Fry's, King Sooper and Food 4 Less.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.