ALDI to acquire Winn-Dixie

[SamSpade]

Since this is a large transaction I wonder if this has had some sort of "pre-approval" from the FTC?

Aldi will acquire all outstanding SEG capital stock in an all-cash transaction,

I'm not sure, but other than in a few places, there is little to no overlap in ALDI and W/D store footprint, right? So with it being all cash for the company, likely easy to do a fast close.

[Knight]

Think they will allow the Winn-Dixie and Harvey's cashiers to sit?

Sitting on the job instead of serving customers can lead to internal disciplinary action.

[Knight]

That’s quite the headline, but it looks like ALDI is taking on Winn-Dixie and Harvey’s, although possibly not Fresco y Mas? This marks ALDI’s entrance into the traditional supermarket business, but they say they may convert some stores:

https://www.prnewswire.com/news-release ... 02141.html

https://www.forbes.com/sites/phillemper ... mart-move/

This is interesting. If Aldi retains and operate Winn-Dixie stores as is, it would be entering the supermarket segment of food retailing and pharmacy.

[jamcool]

From past history the Germans don’t do very well running full-service supermarkets in the US. Examples are FedMart and Furr’s.

[wnetmacman]

Well that was definitely sudden news…

My guess is while most Winn Dixie stores are too big to convert to Aldi per se, that’s what we’ll see.

And towns like mine that already have Aldi will end up with one or two vacant Winn Dixie’s.

Probably still quite a bit of empty stores. Not a lot of independent grocers will be able to manage a store as large as a former WD, none in my part of Florida at least.

If this was the plan for a while, makes me wonder why WD wasted time and money remodeling stores the last few years.

Further, I have to wonder WHY Aldi would want to acquire WD? If Aldi is only doing this to expand their store base, it seems like a waste of money. It would be cheaper to build locations from the ground up, and from what I’ve seen Aldi typically only does new builds, and separate from shopping centers/strip malls.

Actually, I have seen several Aldi stores in existing buildings, but they have been gutted. One of my local stores is in half of a former WD.

I will reiterate; I do not think for a moment that Aldi would be successful running a full-line supermarket. I believe this is a way for them to get a lot of the semi-prime real estate that WD holds in FL and the Southeast and remodel or rebuild stores.

[jamcool]

With their odd private labels and limited service I consider Aldi the grocery equivalent of Harbor Freight.

[ClownLoach]

With their odd private labels and limited service I consider Aldi the grocery equivalent of Harbor Freight.

And they can bring that vision to life by dividing a Winn-Dixie in half, building an Aldi, then renting the other half to Harbor Freight!

[ClownLoach]

Well that was definitely sudden news…

My guess is while most Winn Dixie stores are too big to convert to Aldi per se, that’s what we’ll see.

And towns like mine that already have Aldi will end up with one or two vacant Winn Dixie’s.

Probably still quite a bit of empty stores. Not a lot of independent grocers will be able to manage a store as large as a former WD, none in my part of Florida at least.

If this was the plan for a while, makes me wonder why WD wasted time and money remodeling stores the last few years.

Further, I have to wonder WHY Aldi would want to acquire WD? If Aldi is only doing this to expand their store base, it seems like a waste of money. It would be cheaper to build locations from the ground up, and from what I’ve seen Aldi typically only does new builds, and separate from shopping centers/strip malls.

Actually, I have seen several Aldi stores in existing buildings, but they have been gutted. One of my local stores is in half of a former WD.

I will reiterate; I do not think for a moment that Aldi would be successful running a full-line supermarket. I believe this is a way for them to get a lot of the semi-prime real estate that WD holds in FL and the Southeast and remodel or rebuild stores.

There is an oddity in San Marcos, CA where an Albertsons was across the street from a fairly modern Vons built to the Safeway prototype. Vons divested to Haggen and closed. Later Albertsons acquired it and reopened with their box still across the street but then closed it. Aldi acquired it and did this same split, half became Aldi other half Planet Fitness.

I'm sure there are many Winn-Dixie stores where they could do the same split. And furthermore many Albertsons locations they could do this with.

Winn-Dixie becomes an especially tantalizing acquisition because nearly all of the base is leased, so they can drop any location they don't like at the end of it's next term. Or they can work out a deal with the landlord if it's a desirable store and possibly turn a profit closing with a buyout. Because I don't believe for a second they're going to keep any store they can't or don't want to convert. Every interview their people give, every question is usually answered with "we like to keep it simple." Thus there is zero chance they complicate things by keeping Winn-Dixie or the rest of their banners open any longer than they have to.

Overnight, this changes a lot. I wonder if they suddenly are going to become the most interested party in ACI/KR divests? And furthermore, this unfortunately is a tremendous gift to Kroger's merger plans... Aldi has stated they intend to make it to the #3 position in grocery sales just behind Walmart and Kroger. That would indicate they plan to run over ACI like a freight train. Now KR and ACI have a new bogeyman to replace the flopping Amazon grocery business in their justification for a merger. Let us merge and we save your union jobs. Block the merger and here's Aldi ready to squash your union and lay off nearly everyone in your store that isn't needed with their model. Everything Aldi does is intentional, which means this is only the first of many acquisitions they're going to attempt.

And they're fantastically well capitalized (at least it seems that way) so they can easily outbid Save Mart or anyone else who wants divested stores. They've also got the money to just buy ACI next if a merger fails.

[retailfanmitchell019]

I wonder if they suddenly are going to become the most interested party in ACI/KR divests? And furthermore, this unfortunately is a tremendous gift to Kroger's merger plans...

And they're fantastically well capitalized (at least it seems that way) so they can easily outbid Save Mart or anyone else who wants divested stores. They've also got the money to just buy ACI next if a merger fails.

There is no way in hell Aldi will be allowed to buy Albertsons/Kroger divests, as Aldi is a non-union shop.
Winn-Dixie is entirely non-union, so that makes sense for Aldi to acquire.
The unions will have zero tolerance for Aldi and Amazon trying to buy divested KR/ACI union shops. I only see Aldi and Amazon buying non-union shops (Albertsons stores in TX/AZ).

[ClownLoach]

I wonder if they suddenly are going to become the most interested party in ACI/KR divests? And furthermore, this unfortunately is a tremendous gift to Kroger's merger plans...

And they're fantastically well capitalized (at least it seems that way) so they can easily outbid Save Mart or anyone else who wants divested stores. They've also got the money to just buy ACI next if a merger fails.

There is no way in hell Aldi will be allowed to buy Albertsons/Kroger divests, as Aldi is a non-union shop.
Winn-Dixie is entirely non-union, so that makes sense for Aldi to acquire.
The unions will have zero tolerance for Aldi and Amazon trying to buy divested KR/ACI union shops. I only see Aldi and Amazon buying non-union shops (Albertsons stores in TX/AZ).

What is the Aldi stance on unions? I thought some of their German operations were unionized? I know no US locations are union yet, but unlike all of these other foreign operators who have come here with the intent of conquering the USA - Aldi has come the furthest. And they have made it clear that their priority is simply to become the 3rd largest food retailer only behind Walmart and Kroger. I never imagined M&A as a strategy to get there especially after Lidl flopped, but if volume is the highest priority then maybe they're more interested in diversifying their holdings in the US than we might think. I wouldn't underestimate Aldi's ability to get things done, especially if they can pull this off.