Aldi says it will buy 400 Winn-Dixie, Harveys groceries across the southern U.S.

Aldi plans to purchase 400 Winn-Dixie and Harveys supermarkets across the Southern United States from Southeastern Grocers Inc.

Driving the news: Aldi will acquire all outstanding shares of Southeastern Grocers Inc. under a proposed merger agreement.
* If approved by regulators, the deal is expected to close in the first half of 2024.
* The financial terms of the deal were not disclosed.
* The supermarkets Aldi is acquiring are primarily in Alabama, Florida, Georgia, Louisiana, and Mississippi.

The big picture: The deal comes amid wider consolidation in the U.S. grocery industry.
* Aldi currently controls 2% of U.S. grocery sales, while Southeastern Grocers controls less than 1%.
* The Aldi’s share had grown 0.2% since 2021, whereas Southeastern Grocers’ share was down 0.2%.
* Last year, Kroger and Albertsons, two of the largest U.S. grocery chains, announced plans for a $20 billion merger which is currently under review.

Worth noting: Aldi plans to convert some locations to its own brand and format, while others will continue to operate under the Winn-Dixie and Harveys brands.
* Aldi’s format cuts costs with features like restricted selection and self-bagging.
* Neil Saunders, an analyst with GlobalData Retail, suggested that the deal indicates Aldi’s intention to experiment with more traditional supermarkets that don’t follow its low-cost model.

Yes, but: There is opposition to grocery industry consolidation.
* The United Food and Commercial Workers union and secretaries of state from seven states have expressed opposition to the Kroger and Albertsons merger.
* Concerns have been raised over transparency, job impact, consumer choice, and pricing implications.

What’s happening: Southeastern Grocers also plans to sell its 28 Fresco y Mas stores to Fresco Retail Group.
* The Fresco Retail Group will continue to operate them under the same brand.

View original article on NPR

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