Aldi, the German discount grocer, is set to purchase the Winn-Dixie and Harveys locations throughout the South. This would be a major expansion into the previously untouched region.
Aldi is a grocery store which deeply discounts its items. Most of its products are privately labelled, enabling it to CNBC reports:
The German retailer announced this week that it plans to acquire about 400 Winn-Dixie and Harveys Supermarket locations across the Southern U.S. As part of the deal, it would take over operations of the stores, which are in Florida, Alabama, Georgia, Louisiana and Mississippi, and put at least some of them under the Aldi name.
The deal is expected to close in the first half of next year.
Aldi also cuts staff costs by not bagging groceries, leaving it to the customer as is the case in Europe. Forbes adds:
Aldi has a cult-like following from many in the U.S. that has only grown as the grocer has expanded its American reach to 38 states and Washington D.C. Aldi is known for its no-frills approach to grocery shopping, including requiring customers to deposit 25 cents to use grocery carts, and asking customers to bring their own reusable grocery bags or charging them for plastic bags if they don’t. About 90% of the products sold at Aldi are from Aldi exclusive brands, according to the grocer. They claim to offer more affordable options to customers and in the past, Aldi has said their discounts add up to 45% off private label brands by competitors like Walmart.
The two branches of the Albrecht family own thousands of Aldi and Trader Joe’s locations worldwide. Theo Albrecht Sr. and his brother Karl Albrecht Sr. built the grocery story chain in Germany throughout the 20th century. The two split ownership beginning in 1961, with Karl Sr. taking over stories in southern Germany and the rights to Aldi’s in the U.S., U.K. and Australia. Meanwhile, Theo Sr. took over the stores in northern Germany and the rest of Europe, and ten years later, he bought Trader Joe’s. Now, Theo Jr. and the heirs of his brother run the two halves of the grocery store empire as separate entities.
At a time when food inflation is hitting Americans the hardest, Aldi’s move to the South could prove to be a benefit to both its market share and customer satisfaction.
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