Aldi has purchased US supermarket and grocery chains Winn-Dixie and Harveys, as part of a larger divestiture of Southeastern Grocers, in a deal that will expand its presence in the region.
The German-based company will take over all Winn-Dixie and Harveys Supermarkets operations at approximately 400 stores across Alabama, Florida, Georgia, Louisiana, and Mississippi.
Aldi CEO Jason Hart said the transaction supports the company’s long-term growth strategy in the US, including plans to add 120 new stores this year and to reach more than 2,400 stores by year-end.
“The time was right to build on our growth momentum,” said Hart.
Aldi began its presence in the Southeast in the mid-1990s and has invested $2.5 billion in the region since. More recently, it has opened its 26th regional headquarters and distribution centre in Alabama, with plans to open 20 new locations by the end of the year.
“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.
After the acquisition, some locations would be converted to Aldi stores, while others will continue operating under the Winn-Dixie and Harveys brands.
The transaction is expected to close in the first half of 2024, subject to regulatory approval and other customary closing conditions.
Commenting on the transaction, Neil Saunders, MD of GlobalData, told IFMCG that Aldi’s proposed acquisition of Southeastern Grocers represents another example of consolidation in the US grocery market when margin and sales are under pressure.
“The deal will come as a relief to the owner of Winn-Dixie and Harveys, which has been struggling to compete for many years,” he continued.
“Under the stewardship of Aldi, the business will have access to much deeper pockets and a ruthlessly efficient and effective supply chain which will help reduce costs.”
Saunders added that the deal is also an “unusual step” for Aldi, which grows organically by opening stores rather than acquiring businesses.
“At a stroke, this takeover will give Aldi a significant number of extra stores and improve its geographical coverage,” he concluded.
“The addition of Winn-Dixie and Harveys gives it a different proposition to test, and if it is unsuccessful, Aldi can always convert more stores to its format over time.”
