How Charlotte became ground zero in the Southern grocery war

On one side, there’s Harris Teeter’s Cotswold store, which plans to add 4,500 square feet to its existing building to accommodate a wine bar, Starbucks, seating area and home shopping lane.

Across the street, Publix is planning a 46,000-square-foot supermarket that will open next year. It’s been the cause of neighborhood angst because of the traffic it’s expected to generate. The grocer is planning an underground parking deck and new private road to help offset the added trips.

Cotswold is just one neighborhood where these skirmishes are taking place. The grocers are trying to outdo each other in upscale, growing areas from Ballantyne to South End. That’s helping shoppers, who will see more competitive prices and promotions.

It isn’t just Harris Teeter vs. Publix. Discount grocers Walmart and ALDI are expanding in an effort to steal market share from onetime stalwart Food Lion, based just north of Charlotte in Salisbury.

Charlotte has been a tough supermarket nut to crack

How did Charlotte become the epicenter of a Southern battle? First look at Kroger, the new parent of Matthews-based Harris Teeter. Kroger never had much success in the Queen City, entering the market in 1977 but pulling out about a decade later, unable to compete with homegrown Food Lion and Harris Teeter. In July 2013, it announced its intention to buy Harris Teeter and re-enter with force.

Publix, a large Southern grocer known for its customer service and prepared foods, opened its first Charlotte store in early 2014 in Ballantyne. Shots had been fired. While Publix justifiably wants to expand into a state that borders its strong Southern markets, its decision also sends a message that it will defend its lucrative home base in Florida from Kroger’s incursion.

Food Lion has struggled for years as Walmart used its buying power to expand into grocery sales. For years, many of the chain’s stores were safe because of their rural locations, but Walmart is changing that game as well with its smaller neighborhood markets, which are closer to the size of an average grocery store than supercenter. That gives it flexibility to place the stores in more neighborhoods.

To see how this is playing out, look at Walmart’s planned neighborhood market on Pineville-Matthews Road in Pineville that will open this winter. It’s only half a mile from an existing Food Lion and a mile from discounter ALDI’s store in the town. (It’s also only a mile from a rumored Publix store, making for a hot area of town.)

The grocery war ultimately helps shoppers

In Charlotte, the grocery battles translate to more options for shoppers — a benefit that also leads to lower prices and increased promotions. Harris Teeter has slashed prices on hundreds of products, from fresh tomatoes and celery to granola bars and deli meat.

Bargain hunters have worried that Harris Teeter will do away with its popular super double coupon promotions — parent Kroger has one of the stingiest coupon policies around — but there’s been no sign of changes so far.

Publix frequently includes coupons in its weekly circular for discounted gas gift cards with a $50 purchase. Food Lion has renovated the interiors of its Charlotte stores and tried to emphasize more fresh products.

Why Charlotte?

Charlotte has traditionally been dominated by homegrown grocers Harris Teeter and Food Lion. Both staked out profitable locations for their demographics, particularly Harris Teeter. That’s made it difficult for competitors to find desirable locations for their own stores. Winston-Salem-based Lowes Foods mostly pulled out of the market in 2012.

But Charlotte is growing, which presents new opportunities. Areas that weren’t previously palatable are now open for business. Look at South End, where Publix opened a store earlier this year and where Harris Teeter is building another. (Thanks, apartment dwellers.)

Other areas that were already hot — think south Charlotte — also can handle more stores because more people are moving there. It’s a low-risk scenario for supermarkets, which rely heavily on picking the right locations to succeed.

That’s also why you’re unlikely to see dueling Harris Teeter and Publix stores like the ones in Costwold kill each other off. That means more options for you, Charlotte shoppers, which is very good news, indeed.