Aldi announced today that it is acquiring Winn-Dixie and Harveys Supermarkets, a move that will give it close to 400 new locations in Alabama, Florida, Georgia, Louisiana and Mississippi. Southeastern Grocers, which owns the two banners, will sell its other 28-store chain, Fresco y Mas stores, to Fresco Retail Group, LLC. (Four pharmacies also are included in that deal.)
Terms of the deals have not been disclosed. Both deals are expected to close during the first half of 2024, pending regulatory approvals. Southeastern Grocers will continue tom operate all three banners until the deals close.
"The time was right to build on our growth momentum and help residents in the Southeast save on their grocery bills,” said Jason Hart, Aldi’s CEO. “The transaction supports our long-term growth strategy across the United States, including plans to add 120 new stores nationwide this year to reach a total of more than 2,400 stores by year-end."
"This merger agreement is a testament to our successful transformational journey and the tireless work of our dedicated associates who serve our communities," said Anthony Hucker, President and CEO, Southeastern Grocers. "ALDI shares our vision to provide exceptional quality, service and value - and this unique opportunity will evolve our business to benefit our customers, associates and neighbors throughout the Southeast."
The Wall Street Journal had reported less than a year ago that Southeastern Grocers was seeking to sell itself following an aborted attempt at an IPO. While Southeastern Grocers had some financial troubles in the past, under Hucker's leadership the chain has seen a resurgence through store investment that has translated into sales growth.
The announcement points out that Aldi recently "deepened its roots in the region, opening its 26th regional headquarters and distribution center in Loxley, Alabama to help support new stores, with plans to open 20 new ALDI locations in the area by the end of the year. Southeastern Grocers established its presence in the region nearly a century ago. From the beginning, its commitments to the customer, caring associates and quality products have made a profound impact in the Southeast.
"ALDI will operate Winn-Dixie and Harveys Supermarket stores with the same level of care and focus on quality and service, as we also evaluate which locations will convert to the ALDI format to better support the neighborhoods we'll now have the privilege of serving," added Hart. "For those stores we do not convert, our intention is that these continue to operate as Winn-Dixie and Harveys Supermarket stores."
- KC's View:
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On the face of it, this strikes me as an odd fit - the typical Aldi format would seem to have very little in common with the two banners the company is acquiring. According to the announcement, only some of the stores will be converted to the Aldi format, which will leave the company operating formats with which it not familiar.
That said, Aldi has money, which means it can acquire whatever talent it thinks it needs to keep the stores running smoothly, above and beyond the personnel it will get in the acquisition. It can also invest in lower prices at both Winn-Dixie and Harveys, while taking advantage of those chains' expertise to perhaps raise its game in fresh food and other categories.
Seems to me that this new, combined competitor will be better positioned to give Publix a run for its money in markets where it generally has been a dominant player.
