Harris Teeter to remodel 5 Charlotte stores

Harris Teeter has not introduced a new store within the city limits of Charlotte since the one on Ardrey Kell Road opened in south Charlotte in 2008. Last year, it opened one in nearby Cornelius at Jetton Village.

But in 2012, the Matthews-based grocery chain is providing some good news for local construction crews.

This year it will remodel five of its stores in the Queen City – Morrocroft, Kenilworth Commons in Dilworth, Myers Park, Stonecrest and Steele Croft in southwest Charlotte – plus tear down a store on Central Avenue in Plaza Midwood and replace it with a larger one.

Across the chain, the grocer is reported to have plans to spend more than $215 million to complete major remodelings on 12 stores and open seven new ones. Its market area encompasses North Carolina, South Carolina, Virginia, Georgia, Tennessee, Florida, Maryland, Delaware and the District of Columbia, with a total of 207 stores.

Does this mark a change in Harris Teeter‘s approach to doing business?

The grocer is mum on the topic.

“Strategy is not something we speak to,” spokeswoman Danna Jones said.

But in a written response to inquiries, Jones said most stores in the chain are updated about every two to three years.

“Remodels not only help us continue to operate at the highest level possible on behalf of our customers,” she said, “but they also give us the opportunity to introduce more sustainable, energy-efficient designs and practices to our facilities as part of routine maintenance.”

Players in the local retail market say a major reason that Harris Teeter is not opening new stores is the economic downturn, which has meant developers stopped building grocery store-anchored neighborhood shopping centers.

“It used to be that you could build a store in a green marketplace, and it would fill up in three or four years,” said Steve Vermillion, a partner with Merrifield Patrick Vermillion. “Now you don’t see that. So there’s no reason to expand out there.”

Those centers aren’t about to return any time soon, said Charlotte real estate consultant Frank Warren.

“Retail, generally, is waiting on the housing market to recover, and no one knows when that will happen. That doesn’t create a dynamic for retail development. Until the housing market stabilizes and recovers, there will limited new retail development. And so chains focus on the performance of existing stores.”

In Charlotte, those stores are facing a dramatically different environment that has become increasingly competitive.

Big-box retailers, such as Wal-Mart and Target, have added food to their offerings, as have some drugstore chains. Wal-Mart is now the largest grocer in the region, followed by Harris Teeter.

More shoppers are turning to wholesale clubs like Sam’s and Costco. In addition, natural-food stores like Trader Joe’s, Earth Fare and Whole Foods have entered the Charlotte market. And there are rumors Publix, which is opening two stores in nearby South Carolina this year, is looking to expand into Mecklenburg County.

“Harris Teeter may feel they have saturated the market and are where they need to be,” Vermillion said. “That’s where many retailers make mistakes: They fail to improve their stores as the competition gets better. Competitors will pounce if they see a weakness. Harris Teeter has responded pretty well.”

Prepared foods and specialty items are in increasing demand. The Internet has meant more shoppers are using coupons. Even high-end shoppers are looking for deals. Well-established chains like Harris Teeter can’t afford to sit by.

“Harris Teeter sees higher-quality projects, organic foods and marketing their own brands as their competitive set,” said Andrew Jenkins, managing partner of Charlotte-based Karnes Resarch Co., which compiles commercial real estate data. “You have to increase the square footage of your stores to keep up with demand.”

For Harris Teeter, that has included its 60,000-square-foot flagship store at Morrocroft Village in SouthPark, often referred to as the “Taj Teeter.” The store will expand to fill the space once occupied by Monkee’s and Papitre.

Signage at the store says the expansion will open in spring 2012, although there are only a few construction trash bins on the site. The contactor is Rochester, N.Y.-based LeChase Construction, which has offices in Charlotte and Durham.

Shoppers at the current Plaza Midwood store are being told the facility will close sometime by the end of June. It will be replaced by a two-story, 48,400-square foot facility that is scheduled to open next spring. Parts of the parking lot have already been fenced off.

At the Myers Park store at the intersection of Providence and Queens roads, a structure that once housed Myers Park Hardware – and later Interiors Marketplace –  will be torn down to make way for a 42,000-square-foot, two-story store set to open in the spring of 2013. A Harris Teeter Express on the site will also be demolished, although it is still open. A truck from Raleigh-based EHG Environmental Services is parked on the Interiors  Marketplace site.

At Kenilworth Commons on East Boulevard, space that was connected to the store has been torn down, and a new structure is up. The contractor is Sexton Construction out of Winston-Salem.