Now we know what ALDI was thinking when it bought a chain of full-sized grocery stores and got people wondering, why would it want to simultaneously operate its small-scale stores alongside larger-scale supermarkets?
The answer is: it doesn’t.
A year and a half after announcing its purchase of Winn-Dixie and Harveys owner Southeastern Grocers, and then proceeding to convert many of its new acquisitions to ALDI stores, ALDI has reaffirmed its commitment to operate its own small-format stores and not the larger stores it acquired. In a late Friday announcement, ALDI said it plans to complete the conversion of about 220 Winn-Dixie and Harveys stores to ALDI – and it has sold off the approximately 170 stores that are left.
A consortium of private investors, headed by current Southeastern Grocers CEO Anthony Hucker and his stores’ longtime supplier C&S Wholesale Grocers, has acquired Southeastern Grocers from ALDI and will run the remaining Winn-Dixie and Harveys stores going forward.
“We are profoundly grateful and deeply honored to continue serving the communities we cherish,” Hucker said in a statement. ALDI USA CEO Jason Hart expressed confidence that the new owners “will lead the company successfully into its next chapter.”
There was uncertainly about ALDI’s plans for Winn-Dixie and Harveys from the very day the acquisition was announced. Store conversions were always in the cards, as ALDI said it would “evaluate which locations will convert to the ALDI format” and that the rest would “continue to operate as Winn-Dixie and Harveys Supermarket stores.”
But ALDI never came out and said which Winn-Dixie and Harveys stores, and how many, across Florida, Alabama, Georgia, Louisiana and Mississippi would be turned into ALDI stores. ALDI promised a “meaningful number” would remain as-is. But as employees and shoppers saw more and more locations marked for conversion, they couldn’t help but wonder how many Winn-Dixie and Harveys stores would be left.
We still don’t know exactly which Winn-Dixie and Harveys stores will live on. But at least we know the chains themselves will. Winn-Dixie is the larger chain, by far, as Harveys only has a couple dozen locations. But both have been around a long time – Harveys just marked its 100th anniversary last year, and Winn-Dixie’s 100th is this year. So the storied grocers will continue to serve their communities – just as soon as ALDI is done transforming the locations it wants to keep. About 100 of them will reopen as ALDI stores by the end of the year, with the rest of the approximately 220 being converted by 2027.
So it turns out ALDI didn’t really want to run large, traditional grocery stores with a broader product selection, more national brands, more weekly sales and lots of coupons. It just wanted their real estate, to help turbocharge its own growth. ALDI coupled its announcement about the store sales with an update on its five-year expansion plan that it unveiled last year. Its goal is to add 800 stores nationwide by the end of 2028. And it’s already nearly halfway there – so far, ALDI has opened about 120 new stores and expects to open 225 more this year, through a combination of new openings and Winn-Dixie and Harveys conversions.
Buying and converting more than 200 grocery stores, instead of building new ones from the ground up, was “critically important” to ALDI’s expansion plans, Hart said, citing ALDI’s “nationwide commitment to help shoppers fill their carts with quality groceries for less.” In addition to its expansion in the Southeast, ALDI plans to enter new markets like Las Vegas, continue growing in the Northeast and Midwest, and grow its Western presence with more stores in Southern California and Arizona.
As for the Winn-Dixie and Harveys stores that remain, you could say they’re something of a consolation prize for C&S. You might recall that C&S, which currently only owns a handful of grocery stores, had planned to purchase hundreds of stores from Kroger and Albertsons as part of their aborted merger. In rejecting that deal back in December, a federal judge expressed “serious concerns about C&S’ ability to run a large-scale retail grocery business,” given its history of not holding onto its previous acquisitions for long.
Now, C&S will be running a large-scale retail grocery business – just not the one it had anticipated. “C&S has remained steadfast in our commitment to our transformation strategy, which includes being an industry-leading grocery wholesaler and retailer,” C&S CEO Eric Winn said in a statement. “C&S will leverage our best-in-class capabilities to provide value and quality to shoppers as we continue advancing our legacy of braggingly happy customers.”
So Winn-Dixie and Harveys will survive, ALDI will thrive, and C&S will gain an ownership stake in a major grocery chain after all. As long as C&S can prove the naysayers wrong about its ability to run grocery stores and stick with it over the long haul, it seems like everyone got something out of the deal. And if it all results in a better shopping experience and lower grocery prices – we can only hope shoppers end up winning as well.
Image sources: ALDI/Winn-Dixie
