Winn-Dixie Aldi Merger: Discount Grocery Chain Is Buying 400 Winn-Dixie and Harveys Supermarkets
Key takeaways
- Aldi is buying up 400 Winn-Dixie and Harveys supermarkets in the Southwest
- The deal is expected to close in 2024
- Southwestern Group has struggled financially for years, having filed for bankruptcy in 2018
German supermarket giant Aldi is expanding its reach into the Southwest by buying 400 Winn-Dixie and Harveys locations across the region. The move solidifies Aldi’s presence in the U.S. and underscores how consumer behavior has shifted from brand loyalty to the best deals possible. Here’s what we know.
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What’s the latest with Aldi?
Aldi is officially taking over vast swathes of supermarkets in the U.S. as it takes over 400 Winn-Dixie locations.
The acquisition, which includes Harveys Supermarkets, will give Aldi new locations in Alabama, Georgia and Louisana, to name a few. 300 of the grocery stores are located in Florida. While some locations will keep the familiar red-and-white Winn-Dixie branding, most of the 400 stores will be converted into Aldi’s colours and bare-bones layout.
The deal is set to complete in 2024, pending regulatory approval. Aldi CEO Jason Hart said the Southwest “is a big part of our growth initiative across the country” and that the deal could serve as a potential real estate leasing opportunity for the business, which requires less space than traditional supermarkets.
What was the market reaction?
Aldi isn’t a publicly traded company, instead choosing to focus on rapidly expanding its presence in other countries. It’s now the ninth-largest grocer in the U.S. and operates over 2,000 stores, intending to have 2,500 open by the end of the year. Perhaps an IPO will be on the cards in time, but there aren’t any whispers for now.
As for Southwestern, which currently owns the Winn-Dixie supermarkets, the deal will be a relief after years of financial woes. Southwestern had previously filed for bankruptcy in 2018 and shut down 94 stores. In 2005, Winn-Dixie closed around 300 stores and laid off 30% of its employees.
Aldi intends to buy all of the Florida-based company’s capital stock in cash, but it could face regulatory pushback. In a similar deal last year, Kroger announced it was acquiring Albertsons for $25 billion — but the purchase is now facing an antitrust probe.
The bottom line
Aldi has a relentless growth plan in the U.S. ever since it landed in the States back in 1976. The Winn-Dixie deal is a smart move from the grocery giant, which can take advantage of a ready-made Southwestern base and improve efficiencies. Pending regulatory hurdles, other supermarket chains should be worried about Aldi moving in.
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