ALDI to acquire Winn-Dixie

[wnetmacman]

More than likely they would keep the Tom Thumb banner. WD burned their bridges in TX years ago.

WD's bridge in TX was never very stable. They bought Kimbell, Inc., in 1976. They operated Buddies stores. A large part of Texas never forgave that, because Buddies was unique; many stores had a hardware store inside that rivaled many others around. When they assimilated Buddies, the hardware stores were spun off, and many stores were pretty much minimally maintained from that point. There were quite a few Marketplace stores there, but this expansion was inconsistent. They just could not compete against the combination of major players of Kroger, Albertsons and Walmart, plus the regional United TX, Brookshire and Brookshire Bros. plus the threat of HEB looming. Outdated leases also were eating their lunch, and Texas was simply the easiest division to unload. Some stores never reopened as another retailer, and those that did found out why WD didn't want them - old, outdated, poorly maintained, and poorly located. I would say that roughly half the store base outside D/FW was long gone by 2002's pullout, but WD still held several leases by the 2005 Chapter 11 filing. As an example - Longview had two Buddies stores, a third WD was added around 1980. Only the 1980 store was still running in 2002, and only because it was one of two chain supermarkets left in its part of town.

[cjd]

Read a blurb on Reddit that all Winn Dixie pharmacies will close by December. Not surprising considering WD had closed so many on their own the last few years.

But it certainly points to the fact that Aldo has zero plans to keep any Winn Dixie stores in tact.

I hate the blight that this is going to cause. In the small towns without Aldi it’s one thing to convert the only WD to Aldi.

But in ones like mine that already have an Aldi and two Winn Dixie’s we’re going to be left with a lot of chunks of vacancies in strip malls. And we already have practically every trendy new retailer in our already broken up former spaces like Gold’s Gym and Books A Million, so what do you do?

[pseudo3d]

Where is FTC? There isn't a whole lot of competition left in some spots in FL.

Deal hasn't closed yet. Still about 4 months until 2024.

But in ones like mine that already have an Aldi and two Winn Dixie’s we’re going to be left with a lot of chunks of vacancies in strip malls. And we already have practically every trendy new retailer in our already broken up former spaces like Gold’s Gym and Books A Million, so what do you do?

The big question is how is Aldi going to take over the stores? For leased stores, are they just going to eat the other two-thirds of the store and leave it dark? For owned stores, are they going to play landlord and lease it back? Or is SEG going to remain on the hook for the leases when they do a convenient bankruptcy and have all of them voided?

[buckguy]

Any scenario for these stores will cost a lot of money, whether its conversions or trying to do something successful with W-D/Harvey's, let alone being a contender for Spinco. At this point, we have no idea what they're spending just for the acquisition. Aldi is privately owned and notoriously secretive so we probably don't know cash they have on hand or the kind of debt they would would be willing to carry. They used to be characterized as having no debt but recently took out a line of revolving credit.

[retailfanmitchell019]

WD's bridge in TX was never very stable. They bought Kimbell, Inc., in 1976. They operated Buddies stores. A large part of Texas never forgave that, because Buddies was unique; many stores had a hardware store inside that rivaled many others around.

Upon doing further research, I found out Kimbell also owned the Foodway chain in New Mexico. I thought that was a separate acquisition…

[wnetmacman]

The big question is how is Aldi going to take over the stores? For leased stores, are they just going to eat the other two-thirds of the store and leave it dark? For owned stores, are they going to play landlord and lease it back? Or is SEG going to remain on the hook for the leases when they do a convenient bankruptcy and have all of them voided?

Aldi will sublease the unused portion. Every lease takeover I have seen was a full store (One was even a former WD) and they were able to sublease it all. Seems their little store draws traffic. A few cases in point:

Longview, TX: 1725 NW Loop 281. This store was originally a TG&Y Family Center that was twice leased to Hobby Lobby, who expanded it greatly over the years. It's now sublet to Aldi and Bealls Outlet.

New Iberia, LA: 1102 Admiral Doyle Dr. Originally New Iberia's second Walmart, the entrance section was Stage; It was divided between Aldi and Five Below. (Big Lots has occupied this center three times; twice in the garden/auto end of this same building).

Lafayette, LA: 4518 Ambassador Caffery. The aforementioned WD, which closed long ago. It is now Aldi and Club4 Fitness. This is currently the retail hotspot. Costco, SuperTarget, a large Academy and Whole Foods are within visual of this location.

[BillyGr]

What I posted is what was REPORTED - I didn't make anything up!

Nobody said you did?

They sort of did by way of the replies quoting that post saying that they wouldn't run stores that weren't the exact duplicate of the existing Aldi model, when the information was posted (based on actual reports from actual places that report information) that they planned to convert SOME locations and keep others as the brands they currently were.

[jamcool]

If they try to Aldi-fy WD/Harvey’s expect to lose many customers. Southeners have major brand loyalty and they expect departments like bakeries and full service meat departments. They can’t just sell Kraft mayonnaise as their sole national brand and not sell Duke’s., or vacuum-packed meat cuts.

[pseudo3d]

If they try to Aldi-fy WD/Harvey’s expect to lose many customers. Southeners have major brand loyalty and they expect departments like bakeries and full service meat departments. They can’t just sell Kraft mayonnaise as their sole national brand and not sell Duke’s., or vacuum-packed meat cuts.

The stores are going to be closed and renovated at the very least. When I saw Village Foods being renovated into an Aldi, the side that Aldi took over was even more changed than what the trampoline park took over, with the foundation actually removed. They literally took out like a foot of concrete.

But you are right...the change could disenfranchise loyal shoppers. Where are they to go now? Publix?

[jamcool]

Walmart, Costco, Dollar General, Family Dollar