Report: Publix, Kroger may eye Harris Teeter if grocery chain sells

Harris Teeter Supermarkets Inc. is considering a sale and is working with J.P. Morgan Chase & Co. to pursue options, according to a report in The Wall Street Journal.

The Matthews, N.C.,-based company, with a market value of about $1.9 billion, operates 211 stores along the East Coast from Florida to Delaware, including seven in the Charleston area. Another is set to open later this year in North Charleston.

The Charlotte area company is not talking about its possible sale.

“Harris Teeter, as a matter of policy, does not comment on rumors regarding mergers and acquisitions,” company spokeswoman Danna Jones said Wednesday.

Locally, Harris Teeter operates four stores in Mount Pleasant, two in Charleston and one on James Island. The new North Charleston store will be near Wescott Plantation on Dorchester Road.

In recent months, Harris Teeter has seen increased competition from new stores in its home base of Charlotte.

Florida-based Publix recently opened a Charlotte division and opened two new stores just across the border in South Carolina, and Walmart recently announced plans to open one of its smaller grocery-only stores on Independence Boulevard. Whole Foods Market also recently opened in the upscale South Park area, and Publix is building stores in the high-end Ballantyne area and closer to downtown in the Dilworth area.

On news of the possible sale, the stock for Harris Teeter, a publicly traded company, closed up 3.09 percent Wednesday to $40.72 after jumping 6.6 percent on Tuesday on the New York Stock Exchange.

Big rival chains such as Publix and Kroger are likely to size up Harris Teeter as a possible acquisition, Reuters reported, citing unnamed sources familiar with the matter.

Publix, a privately held company, has more than $27 billion in sales and operates more than 1,000 supermarkets. Cincinnati-based Kroger has more than 2,400 supermarkets and $90 billion worth of sales, but only 16 supermarkets in North Carolina.

Two-thirds of Harris Teeter’s stores are in North Carolina. At the end of fiscal 2012, Harris Teeter also had 38 stores in Virginia, 14 in South Carolina, seven in Maryland, five in Tennessee, three each in Delaware and Washington, D.C., and one each in Florida and Georgia.

Harris Teeter has undergone changes in the past few years, spinning off its American & Efird textile division to focus on supermarkets and changing its name from Ruddick Corp. to Harris Teeter Supermarkets Inc.

Harris Teeter is the 19th-largest food retailer in North America, with $4.5 billion in 2012 sales, according to Bloomberg data.

But Harris Teeter’s growth has slowed over the past two years, with the company opening only a handful of new stores and focusing on expanding and renovating its existing stores.

The company’s net income declined in 2012 compared with the year earlier. Last month, Harris Teeter’s quarterly earnings fell short of expectations as the supermarket dealt with sluggish holiday sales and aggressive discounting by rivals, analysts told The Wall Street Journal.

Harris Teeter now employs about 25,000 workers. In addition to the retail stores, its assets include a dairy in High Point and distribution centers in Greensboro, N.C., and Indian Trail, S.C.

Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.