Aldi buys 400 Winn-Dixie stores

Discount grocer Aldi said Wednesday it plans to buy 400 Winn-Dixie and Harveys supermarkets in the southern U.S. Under a proposed merger agreement, Aldi will acquire all outstanding shares of Jacksonville, Florida-based Southeastern Grocers Inc., the parent company of Winn-Dixie and Harveys. If the deal is approved by regulators, it’s expected to close in the first half of 2024.

Financial terms of the deal weren’t disclosed. Both Southeastern Grocers and Aldi are private companies. Aldi is based in Germany with a U.S. headquarters in Batavia, Illinois.

Aldi said the deal supports its long-term growth strategy in the U.S., where it expects to have 2,400 stores by the end of this year. The Winn-Dixie and Harveys supermarkets it’s acquiring are primarily in Alabama, Florida, Georgia, Louisiana and Mississippi.

Aldi said it will convert some locations to its own brand and format, which cuts costs with features like limited selection and self-bagging. But it will operate some stores under the Winn-Dixie and Harveys brands.

Neil Saunders, an analyst with GlobalData Retail, said the deal is unusual for Aldi, which usually opens its own stores. He said it suggests Aldi wants to experiment with more traditional supermarkets that don’t follow its low-cost model. He also said Aldi’s deep pockets and efficient supply chain will make Southeastern’s stores more competitive.

The deal comes amid wider consolidation in the grocery industry as customers increasingly defect to big box stores like Walmart. In the year ending June 30, Walmart controlled 25% of U.S. grocery sales, according to Numerator, a market research firm. Aldi controlled 2% while Southeastern Grocers controlled less than 1%. Aldi’s share had grown 0.2% since 2021, while Southeastern Grocers’ share was down 0.2%.

Last fall, Kroger and Albertsons — two of the largest U.S. grocery chains — announced plans to merge in a $20 billion deal. Regulators are reviewing that plan now; if it’s approved, it is expected to close early next year. Together, Kroger and Albertsons currently control around 18% of the U.S. grocery market, Numerator said.

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