Aldi Adds To Grocery Consolidation With Deal to Buy Winn-Dixie, Harveys Supermarkets
With Merger, German Discount Chain To Add Roughly 400 Southeast Stores
By Linda Moss | CoStar News | August 16, 2023 | 8:37 P.M.
KEY POINTS of the Article
- Aldi, the German discount supermarket, is buying Winn-Dixie and Harveys Supermarket chains, adding about 400 stores to its U.S. presence.
- This move is part of Aldi’s expansion strategy in the Southeast and reflects ongoing consolidation in the grocery industry.
- The acquisition includes stores in five states and is set to close in the first half of next year.
- Aldi aims to have 2,400 stores across the U.S. by the end of this year, and the deal challenges its typical organic growth approach.
Retail Specialists has produced Overlay Maps with ALDI combined with Winn-Dixie & Harveys
Growth By Acquisition
Expanding by purchasing, rather than opening, stores is a new tack for Aldi, according to Saunders and others.
“The deal is also a relatively unusual step for Aldi, which normally grows organically by opening stores rather than acquiring businesses,” Saunders said. “However, in some ways an acquisition makes sense as Aldi’s proposition has been well received in the U.S. and is currently aligned with the consumer focus on value for money. At a stroke, this takeover will give Aldi a significant number of extra stores and improve its geographical coverage.”
Bill Read, an executive vice president at Retail Specialists, told CoStar News he wouldn’t have expected such a deal.
“Aldi has done well penetrating many of the Southeastern markets and buying an established grocer that’s been around for what — 30,40, 50 years — rather surprising,” Read said of the planned acquisition.
But Winn-Dixie has the kind of geographical advantages, in terms age of stores and market penetration, that could be attractive to an acquirer “because you buy scale fairly quickly,” according to Read.
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