TAMPA, Fla. (WFLA) — Discount grocer Aldi said Wednesday it plans to buy 400 Winn-Dixie and Harveys supermarkets in the southern U.S.
Under a proposed merger agreement, Aldi will acquire all outstanding shares of Jacksonville, Florida-based Southeastern Grocers Inc., the parent company of Winn-Dixie and Harveys. If the deal is approved by regulators, it’s expected to close in the first half of 2024.
Financial terms of the deal weren’t disclosed. Both Southeastern Grocers and Aldi are private companies. Aldi is based in Germany with a U.S. headquarters in Batavia, Illinois.
Aldi said the deal supports its long-term growth strategy in the U.S., where it expects to have 2,400 stores by the end of this year. The Winn-Dixie and Harveys supermarkets it’s acquiring are primarily in Alabama, Florida, Georgia, Louisiana and Mississippi.
Aldi said it will convert some locations to its own brand and format, which cuts costs with features like lean inventories and self-bagging. However, it will still operate some stores under the Winn-Dixie and Harveys brands.
The company is currently evaluating which Winn-Dixie and Harveys Supermarket locations will convert to Aldi stores, Hart said.
It is not known how many employees will be affected by the acquisition.
The deal comes amid wider consolidation in the grocery industry as customers increasingly defect to big box stores like Walmart, which controls more than 20% of U.S. grocery sales. Last fall, Kroger and Albertsons – two of the largest U.S. grocery chains – announced plans to merge in a $20 billion deal. Regulators are reviewing that plan now; if it’s approved, it is expected to close early next year.
Southeastern Grocers also plans to sell its 28 Fresco y Mas stores to Fresco Retail Group, an investment company, which will continue to operate them under the same brand.
Aldi has invested $2.5 billion in its southeastern expansion since the mid-90s, according to the grocer. The chain opened a regional headquarters and distribution center outside of Mobile, Alabama, earlier this year.
“Like Aldi, Winn-Dixie and Harveys Supermarket have long histories and many loyal customers in the southeast and we look forward to serving them in the years to come,” Aldi CEO Jason Hart said. “The time was right to build on our growth momentum and help residents in the Southeast save on their grocery bills.”
“Southeastern Grocers remains committed to conducting business as usual,” a company spokesperson wrote in a release. “The grocer’s dedication to associates, customers and communities remains unwavering as it continues to provide the same high level of service, quality and value that neighbors have come to expect.”
The Associated Press contributed to this report.