## Aldi Acquires Southern Supermarket Chains Winn-Dixie and Harveys
German discount grocer Aldi announced on Wednesday that it is set to acquire Southern supermarket chains Winn-Dixie and Harveys, significantly expanding its U.S. presence. This move is expected to add approximately 400 locations across Alabama, Florida, Georgia, Louisiana, and Mississippi to Aldi’s portfolio. The acquisition is scheduled to conclude in early 2024, according to the company’s [announcement](https://www.prnewswire.com/news-releases/aldi-to-acquire-winn-dixie-and-harveys-supermarket-to-continue-growth-in-the-southeast-301902141.html).
## Expansion Amid Inflationary Pressure
As inflation remains above pre-pandemic levels, consumers continue to seek cheaper alternatives for groceries and general merchandise. Aldi, touted as one of the [fastest-growing](https://www.us.jll.com/en/views/grocers-open-new-stores-and-experiment-with-different-formats) grocers in the United States, is planning to open 120 new stores across the country this year. This move would increase the brand’s presence to over 2,400 U.S. locations.
“The time was right to build on our growth momentum,” Aldi chief executive Jason Hart said, regarding the acquisition. According to Hart, some of the newly acquired stores will continue to operate under the Winn-Dixie and Harveys brands, instead of being converted to Aldi.
## Discount Sector Thrives Amid Inflation
The current inflationary environment has proven favorable for discount and value retailers. Even high-earning consumers are showing signs of trading down, industry analysts note. Weekly visits at discount stores experienced a consistent rise in the second quarter, analytics firm [Placer.ai](http://placer.ai/) reports.
Foot traffic at Aldi increased by 5.4 percent year over year, and Trader Joe’s, also owned by Aldi, saw visits increase by 9.7 percent. Other discount retailers, such as Dollar General, also experienced a surge in visits, with an almost 40 percent increase in the second quarter year-over-year.
## Discount Sector Expansion Hurting Traditional Supermarkets
The flourishing discount sector is affecting profits for traditional supermarkets, a Coresight Research analysis released last year revealed. With rapid expansion, “retailers with significant store overlap with discounters could be at serious risk of margin pressure in the coming years,” the report stated.
The merger of Aldi with Winn-Dixie and Harveys is partly a response to these struggles, according to Neil Saunders, managing director of analytics company GlobalData. Saunders also noted the proposed merger is another example of consolidation in the market, similar to Kroger’s announced plans to acquire Albertson’s for $24.6 billion.
## Challenging Dominance in the Grocery Market
John Clear, director in the consumer retail group at global professional services firm Alvarez & Marsal, described the proposed merger as a “massive step” for Aldi. Clear believes that an Aldi acquisition of Winn-Dixie stores could challenge Publix’s dominance in Florida.
“If I was Publix, I would be pretty worried by this,” Clear said. “I think it’s a big step into their territory.”
Original Story at www.washingtonpost.com – 2023-08-17 00:35:00
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