When Harps Food Stores of Springdale tackled the Saline County market in 2009, it picked a spot on Highway 5 nearly 3 miles from the nearest Walmart or Kroger.
The isolation was nice while it lasted. In September, Kroger opened its largest Arkansas store, a 115,000-SF Marketplace format, in Hurricane Creek Village.
“The new Kroger in Benton is catty-corner from our store,” Harps CEO Roger Collins noted last week. And such direct competition is standard.
“We put a store in Searcy, and we put two stores in Hot Springs, and we put a new store in Jonesboro. All those places we compete against Kroger.”
And Kroger isn’t even Harps’ biggest competitor.
“Every one of our stores, everywhere, has a Walmart and maybe two or three that compete with them,” Collins said.
In the past year and a half alone, he said, “we’ve had 25 new Walmarts in our trade area that compete against some of our stores.”
Harps sold $708 million worth of groceries in the fiscal year that ended in August, enough to make it one of the 15 largest private companies based in Arkansas but a rounding factor for Wal-Mart Stores Inc., headquartered 18 miles away in Bentonville.
It’s also a hair below the $712.6 million in revenue Harps reported in fiscal 2014, but Collins said that was because the previous fiscal year had an extra week.
“This is our 10th record year in a row for EBITDA,” he said, but he would not divulge that before-tax profit figure.
Still, essentially flat revenue for a company that is adding stores and upgrading old ones suggests that the competition is fierce.
“Ours is really a tough business,” Collins acknowledged. The competition, he said, “certainly forces us to try to be the very best company we can be and to improve our friendliness and customer service and all those things. But it’s not fun.”
Harps will open its 80th store next month at the junction of Highways 65 and 412/62 in the Bellefonte community southeast of Harrison. New stores opened during the past year in Mountain Home and in Poplar Bluff — the ninth in Missouri. Harps also has nine stores (one a Price Cutter Food Warehouse) in Oklahoma, and 2016 should deliver the first in Kansas, in the Kansas City suburb of DeSoto.
A replacement store is under construction in Waldron, and the current store at Vilonia (Faulkner County) will also be replaced. “We want a bigger store and a nicer store” in Vilonia, Collins said. “We have a site and we’re just working on getting everything put together.”
Commerce Construction of Springdale is Harps go-to contractor. Harps also depends on J. Price Architects of Liberty, Missouri, and Henderson Engineers of Overland Park, Kansas. But the rest of its construction team is local: Joseph Looney & Associates, a structural engineering firm in Lowell; the civil engineers at ESI in Springdale; and geotechnical and environmental experts from GTS Inc. and Environmental Enterprise Group, both of Fayetteville.
A 10th Oklahoma store, north of Muskogee at Wagoner, should be ready for business in January or February 2017, Collins said.
In September, Harps acquired a store site at Goad Springs Road and Highway 264 in Lowell, but a construction schedule for that is not set.
“It’s probably a little farther down the road,” Collins said. “My guess is that the Pocahontas thing is something that would happen before Lowell.”
But construction in Pocahontas is also up in the air — although perhaps not high enough. The potential for flooding at the preferred site near the Black River has complicated the plans.
“We have secured a site and we have the unilateral right to buy the site, but we’re still in the hold period,” Collins said. “Elevation is sort of a problem, but we’re moving ahead with plans to put a store there.”
Notably missing from the timetable is the first Pulaski County Harps on Highway 107 in Sherwood.
The Sherwood store is still “on our table,” Collins said. But it was originally planned to be larger — 38,000 SF, like the Bentonville Harps. And, as Collins has acknowledged previously, reports of interest in the same area by The Kroger Co. have prompted Harps to reconsider the size of the Sherwood store.
Most Harps stores are 32,000 SF, although it does have some that are 22,000 SF.
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