Aldi announces 800-store expansion as it completes Southeastern Grocers acquisition

[cathandler]

https://www.cnn.com/2024/03/07/business ... index.html

[ClownLoach]

https://www.cnn.com/2024/03/07/business ... index.html

Translation: they're going to dig into the books and play around converting Winn-Dixie etc. stores to Aldi format, and when they've had enough they'll close everything else they didn't convert.

[storewanderer]

They said 330? of the new locations will be in the Midwest and Northeast.

So that leaves 470 locations that will be new in SE Grocers territory, plus CA/NV/AZ.

Southeast Grocers is at 600 stores. So assuming this 50 stores converted per year rate that means 250 stores converted over a 5 year period. Or if they can ramp it up and do 50 stores this year, then 100 stores the next 4 years... I think that is a more likely rate; that would get them 450 conversions and then 150 SE Grocers Stores remaining.

[buckguy]

They said 330? of the new locations will be in the Midwest and Northeast.

So that leaves 470 locations that will be new in SE Grocers territory, plus CA/NV/AZ.

Southeast Grocers is at 600 stores. So assuming this 50 stores converted per year rate that means 250 stores converted over a 5 year period. Or if they can ramp it up and do 50 stores this year, then 100 stores the next 4 years... I think that is a more likely rate; that would get them 450 conversions and then 150 SE Grocers Stores remaining.

When you break it down like that, this seems way less dramatic as pace for expansion.

[storewanderer]

They said 330? of the new locations will be in the Midwest and Northeast.

So that leaves 470 locations that will be new in SE Grocers territory, plus CA/NV/AZ.

Southeast Grocers is at 600 stores. So assuming this 50 stores converted per year rate that means 250 stores converted over a 5 year period. Or if they can ramp it up and do 50 stores this year, then 100 stores the next 4 years... I think that is a more likely rate; that would get them 450 conversions and then 150 SE Grocers Stores remaining.

When you break it down like that, this seems way less dramatic as pace for expansion.

Aldi is good at making something sound like a huge deal.

It will be interesting to see how many actually open in CA/NV/AZ and how far into NorCal they push. I do not expect them to do overly well in NorCal. If they get up north of Sacramento they may do better. Redding, Marysville, Yuba City, Chico, areas.

[ClownLoach]

They said 330? of the new locations will be in the Midwest and Northeast.

So that leaves 470 locations that will be new in SE Grocers territory, plus CA/NV/AZ.

Southeast Grocers is at 600 stores. So assuming this 50 stores converted per year rate that means 250 stores converted over a 5 year period. Or if they can ramp it up and do 50 stores this year, then 100 stores the next 4 years... I think that is a more likely rate; that would get them 450 conversions and then 150 SE Grocers Stores remaining.

When you break it down like that, this seems way less dramatic as pace for expansion.

Aldi is good at making something sound like a huge deal.

It will be interesting to see how many actually open in CA/NV/AZ and how far into NorCal they push. I do not expect them to do overly well in NorCal. If they get up north of Sacramento they may do better. Redding, Marysville, Yuba City, Chico, areas.

I just wonder if they can keep prices low in NorCal. It doesn't seem like anyone else is able to. If they can deliver decent pricing and figure out how to tailor the assortment to the market then they will do just fine (by their definition which is seemingly a lot less than you or I would expect). I would expect them to start East of the Bay and North of Sacramento, or they could just keep creeping North from SoCal a few markets at a time until they are all the way up there.

[storewanderer]

When you break it down like that, this seems way less dramatic as pace for expansion.

Aldi is good at making something sound like a huge deal.

It will be interesting to see how many actually open in CA/NV/AZ and how far into NorCal they push. I do not expect them to do overly well in NorCal. If they get up north of Sacramento they may do better. Redding, Marysville, Yuba City, Chico, areas.

I just wonder if they can keep prices low in NorCal. It doesn't seem like anyone else is able to. If they can deliver decent pricing and figure out how to tailor the assortment to the market then they will do just fine (by their definition which is seemingly a lot less than you or I would expect). I would expect them to start East of the Bay and North of Sacramento, or they could just keep creeping North from SoCal a few markets at a time until they are all the way up there.

Prices at WinCo and Wal Mart in NorCal aren't really higher than surrounding states outside a few problem items (eggs, beef, some vendor items like soda). The Kroger FoodsCo pricing is also pretty similar to Kroger pricing elsewhere/midwest. The pricing problem in NorCal is really a Safeway-led thing, quickly followed by Save Mart, then Raleys follows along with its price hikes months later.

They also have Grocery Outlet in NorCal to deal with even though they are not exactly the same store. I'd actually if I were Aldi go try to place stores very near a Grocery Outlet and study the results of doing so. I think many non-brand sensitive customers would cross shop both stores and completely be able to meet their needs by visiting both stores and cut out a trip to Safeway/Save Mart/Raleys entirely as a result.

[CalItalian]

Aldi is good at making something sound like a huge deal.

It will be interesting to see how many actually open in CA/NV/AZ and how far into NorCal they push. I do not expect them to do overly well in NorCal. If they get up north of Sacramento they may do better. Redding, Marysville, Yuba City, Chico, areas.

I just wonder if they can keep prices low in NorCal. It doesn't seem like anyone else is able to. If they can deliver decent pricing and figure out how to tailor the assortment to the market then they will do just fine (by their definition which is seemingly a lot less than you or I would expect). I would expect them to start East of the Bay and North of Sacramento, or they could just keep creeping North from SoCal a few markets at a time until they are all the way up there.

Prices at WinCo and Wal Mart in NorCal aren't really higher than surrounding states outside a few problem items (eggs, beef, some vendor items like soda). The Kroger FoodsCo pricing is also pretty similar to Kroger pricing elsewhere/midwest. The pricing problem in NorCal is really a Safeway-led thing, quickly followed by Save Mart, then Raleys follows along with its price hikes months later.

They also have Grocery Outlet in NorCal to deal with even though they are not exactly the same store. I'd actually if I were Aldi go try to place stores very near a Grocery Outlet and study the results of doing so. I think many non-brand sensitive customers would cross shop both stores and completely be able to meet their needs by visiting both stores and cut out a trip to Safeway/Save Mart/Raleys entirely as a result.

Aldi and Grocery Outlet compete all over my area (Inland Empire). Aldi is decidedly busier. Both are adding more stores in my area - Aldi just having opened a second store in Temecula. Grocery Outlet soon to start construction in Menifee.

Aldi will do great in the Central Valley. It's quite similar to my area where Aldi stores are doing great.

Foods Co./Food 4 Less is considerably higher than Aldi - as Kroger prices are decidedly higher in California vs. other states. In Perris, there is a Food 4 Less, Walmart Supercenter and Aldi one after the other on the same street. Food 4 Less is underperforming, Aldi is overperforming. Very Hispanic area.

[storewanderer]

I just wonder if they can keep prices low in NorCal. It doesn't seem like anyone else is able to. If they can deliver decent pricing and figure out how to tailor the assortment to the market then they will do just fine (by their definition which is seemingly a lot less than you or I would expect). I would expect them to start East of the Bay and North of Sacramento, or they could just keep creeping North from SoCal a few markets at a time until they are all the way up there.

Prices at WinCo and Wal Mart in NorCal aren't really higher than surrounding states outside a few problem items (eggs, beef, some vendor items like soda). The Kroger FoodsCo pricing is also pretty similar to Kroger pricing elsewhere/midwest. The pricing problem in NorCal is really a Safeway-led thing, quickly followed by Save Mart, then Raleys follows along with its price hikes months later.

They also have Grocery Outlet in NorCal to deal with even though they are not exactly the same store. I'd actually if I were Aldi go try to place stores very near a Grocery Outlet and study the results of doing so. I think many non-brand sensitive customers would cross shop both stores and completely be able to meet their needs by visiting both stores and cut out a trip to Safeway/Save Mart/Raleys entirely as a result.

Aldi and Grocery Outlet compete all over my area (Inland Empire). Aldi is decidedly busier. Both are adding more stores in my area - Aldi just having opened a second store in Temecula. Grocery Outlet soon to start construction in Menifee.

Aldi will do great in the Central Valley. It's quite similar to my area where Aldi stores are doing great.

Foods Co./Food 4 Less is considerably higher than Aldi - as Kroger prices are decidedly higher in California vs. other states. In Perris, there is a Food 4 Less, Walmart Supercenter and Aldi one after the other on the same street. Food 4 Less is underperforming, Aldi is overperforming. Very Hispanic area.

I wonder why Kroger wants to keep F4L and not sell that banner off to C&S in the merger. There are too many reports of underperforming F4L Stores in SoCal on this board. What I saw in IL was a joke and clearly underperforming F4L too.

C&S has these franchise F4L Stores in NorCal/Central CA that they supply and also a few other random franchise F4Ls in OR/MO that they don't supply but somehow loosely support (marketing signs, shelf tag systems, and such)... it would seem like them taking F4L over would be perfect.

Many prices at FoodsCo are the same as Smiths on center store private label groceries (higher on name brands). Smiths pricing has really gone up the past couple years especially lately. I noticed Kroger in IL/TX was cheaper. King Soopers in CO seems more expensive than Smiths. Ralphs is of course more expensive, as is Fred Meyer, and QFC is WAY more expensive.

[HCal]

I wonder why Kroger wants to keep F4L and not sell that banner off to C&S in the merger. There are too many reports of underperforming F4L Stores in SoCal on this board. What I saw in IL was a joke and clearly underperforming F4L too.

C&S has these franchise F4L Stores in NorCal/Central CA that they supply and also a few other random franchise F4Ls in OR/MO that they don't supply but somehow loosely support (marketing signs, shelf tag systems, and such)... it would seem like them taking F4L over would be perfect.

Many prices at FoodsCo are the same as Smiths on center store private label groceries (higher on name brands). Smiths pricing has really gone up the past couple years especially lately. I noticed Kroger in IL/TX was cheaper. King Soopers in CO seems more expensive than Smiths. Ralphs is of course more expensive, as is Fred Meyer, and QFC is WAY more expensive.

Food4Less has over 100 locations, not including FoodsCo. That would be almost a fourth of the total stores they have proposed divesting to C&S. Even if they eliminate F4L entirely, there might still be further divests needed due to overlap between Ralphs and Vons/Albertsons in areas where F4L doesn't operate. No way are they giving up that many stores in just one state. The goal of the merger is to get bigger, so they want to keep the number of divested stores to a minimum.