Harris Teeter, the Charlotte, N.C.-based supermarket subsidiary of Ruddick Corp., has agreed to sell 26 stores in Georgia and South Carolina, in what it calls “non-core markets.” The Kroger Co. (Cincinnati), the nation's largest supermarket chain, will purchase 15 of those stores.
The 26 stores include 14 in Athens, Ga., and Atlanta, and 12 in Greenville, Spartanburg, Myrtle Beach, Litchfield and Columbia, S.C.
“After a strategic review of each market's performance,” said Ruddick president and ceo Thomas Dickson, “we concluded that a sale of our stores in these areas will substantially strengthen the company's overall performance. Capital can now be committed to our core markets, which have more consistently generated attractive levels of profitability, and we believe, offer the greatest potential for long-term return on capital and increased shareholder value.”
The stores to be sold accounted for approximately $139 million (or 11.2 percent) of Harris Teeter's total sales of $1.24 million for the six months ended April 1, 2001. The company estimates that pro forma operating profit without these would have been $41.7 million, as compared to actual reported results of $35.2 million for the six months, and that pro forma comp-stores sales increases would have been 3.38 percent as compared to the actual reported 2.07 percent.
Kroger's purchases will all be in Georgia. Atlanta ranks as the eighth-largest Metropolitan Statistical Area (MSA) in the nation. The stores will become part of Kroger's Atlanta Division, which currently operates 107 stores in metropolitan Atlanta and three stores in Athens.
Ruddick Corp. is a holding company that operates two subsidiaries: Harris Teeter, Inc., and American & Efird, Inc., a manufacturer and distributor of industrial sewing thread.