Just moments ago, ALDI announced its latest industry wake-up call, an earthquake if you will, an agreement to acquire Winn-Dixie and Harvey’s Supermarket. A move that might appear to be a mismatch as the leading small store discounter tackles the more conventional supermarket space.
ALDI, under Jason Hart’s leadership, has become not only one of the fastest growing supermarket chains in the United States, but as he shared with me for a previous Forbes column, his plan is to spend billions to become the third-largest grocer in the U.S. by store count. Back then, their store count was 1,800, they now project reaching 2,400 stores by the end of 2023. The acquisition from Southeastern Grocers adds approximately 400 Winn-Dixie and Harvey’s to the ALDI portfolio. ALDI, known for its tight-lipped culture, has not revealed the cost of the acquisition.
In March of this year, Southeastern Grocers which exited bankruptcy in 2018, told investors that the two chains’ comparable sales rose $10% to $2.05 billion in the fourth quarter of 2022 and that it expected sales growth to continue to rise. Winn-Dixie has updated or remodeled over 80% of its stores in Florida, Alabama, Louisiana, Georgia, and Mississippi, with some stores, like the recent opening in Hallandale Beach, Florida, showcasing a focus on fresh, prepared foods and illustrating just how beautiful of a store environment shoppers desire. These acquisitions are in states where ALDI has successfully opened stores, gained market share, and converted shoppers – especially Gen Z to the ALDI not-so-secret sauce of quality, curation, and value. More than 34 percent of the nation’s population increases are occurring in the Southeast with an influx of over 6 million people measured at the end of 2022 bringing the total population to almost 77 million people: certainly, a demographic match for ALDI’s growth plan. The Ad Age-Harris Poll conducted during the fourth quarter of 2022 ranked ALDI as the number one brand that gained the most attention from this important and food focused generation.