ALDI to acquire Winn-Dixie

[veteran+]

I'm assuming in the scenario the Albertsons/Kroger merger doesn't happen so C&S gets nothing. If the Aldi/SEG deal does, then they lose that client.

Aldi does not have the means, knowledge, or ability to support or supply full size stores. As long as Southeast Grocers is kept afloat they can just keep doing what they are doing but with the way Aldi talks it sounds like they plan to convert a number of units to Aldi.

Maybe what happens here is Aldi takes what it wants of Winn Dixie then whatever stores remain along with the Winn Dixie banner go to C&S who can do what they want with them (run as corporate stores, give to wholesale customers, etc.).

Who exactly is a C&S customer in the Winn Dixie territories? It has been a while but I don't remember seeing ANY C&S customers in those territories other than Target and at the time Kmart... Is Rouses in LA a C&S customer? I saw IGA Stores in the South but they were not C&S they were AWG.

Aldi does not want any store they choose not to keep to survive. They will not sell off those stores, they will close them. They have a bizarre philosophy that pretty much reads "our way or the highway." They sincerely believe their model is superior to the rest of the grocery industry, even if the revenue per store is less they can saturate an area with more stores and somehow the 2nd and 3rd waves each perform better than the previous. I'm seeing it start to happen in my area where their 2nd and 3rd wave sites are arguably better located than their original sites, and they seem to outperform them as well. They seem to like to start with some traditional freestanding units, but in following expansion waves they take more traditional in-line locations.

They will convert everything they want to the standard Aldi format, and learn a lot about how such a program would work so they can make a playbook to replicate the "expansion by acquisition" program. They are delusional enough to believe they can become the 3rd largest grocer in the USA behind Walmart and Kroger even if they need 20,000 stores vs whatever Kroger has.

You have their corporate culture down pat!

[Romr123]

There's been an interesting migration of Aldi in the last 45-50 years in St. Louis (and I'm sure in the Benner Iowa/Illinois areas) from their original location (an example is a location on Manchester in Warson Woods which was Schnucks' first 10k sqft supermarket from 1950-ish. Aldi used this as one of their first stores in St. Louis in 1977-ish (Schnucks had moved 1/2 mile away to Manchester/Brentwood and put in a 40k sqft store far more appropriate for the neighborhood, which was their second-wave of suburban extension) The store has long since been superseded twice or thrice over (if I recall rebuilt at that location in about 1982 once then vacated completely to a relocated store in about 1995 then relocated again to a modern store in the last 5 years). Have to think they have that cadence of modernization down-pat...

[pseudo3d]

I'm assuming in the scenario the Albertsons/Kroger merger doesn't happen so C&S gets nothing. If the Aldi/SEG deal does, then they lose that client.

Aldi does not have the means, knowledge, or ability to support or supply full size stores. As long as Southeast Grocers is kept afloat they can just keep doing what they are doing but with the way Aldi talks it sounds like they plan to convert a number of units to Aldi.

Maybe what happens here is Aldi takes what it wants of Winn Dixie then whatever stores remain along with the Winn Dixie banner go to C&S who can do what they want with them (run as corporate stores, give to wholesale customers, etc.).

Who exactly is a C&S customer in the Winn Dixie territories? It has been a while but I don't remember seeing ANY C&S customers in those territories other than Target and at the time Kmart... Is Rouses in LA a C&S customer? I saw IGA Stores in the South but they were not C&S they were AWG.

Aldi does not want any store they choose not to keep to survive. They will not sell off those stores, they will close them. They have a bizarre philosophy that pretty much reads "our way or the highway." They sincerely believe their model is superior to the rest of the grocery industry, even if the revenue per store is less they can saturate an area with more stores and somehow the 2nd and 3rd waves each perform better than the previous. I'm seeing it start to happen in my area where their 2nd and 3rd wave sites are arguably better located than their original sites, and they seem to outperform them as well. They seem to like to start with some traditional freestanding units, but in following expansion waves they take more traditional in-line locations.

They will convert everything they want to the standard Aldi format, and learn a lot about how such a program would work so they can make a playbook to replicate the "expansion by acquisition" program. They are delusional enough to believe they can become the 3rd largest grocer in the USA behind Walmart and Kroger even if they need 20,000 stores vs whatever Kroger has.

The problem is there's no existing examples of Aldi buying up an alternate format and converting it to their name. The closest is Bottom Dollar Food, and both Delhaize and Aldi made very clear that the all 60-something stores would be closing, with only about half reopening as Aldi.

[buckguy]

Aldi does not want any store they choose not to keep to survive. They will not sell off those stores, they will close them. They have a bizarre philosophy that pretty much reads "our way or the highway." They sincerely believe their model is superior to the rest of the grocery industry, even if the revenue per store is less they can saturate an area with more stores and somehow the 2nd and 3rd waves each perform better than the previous. I'm seeing it start to happen in my area where their 2nd and 3rd wave sites are arguably better located than their original sites, and they seem to outperform them as well. They seem to like to start with some traditional freestanding units, but in following expansion waves they take more traditional in-line locations.

They will convert everything they want to the standard Aldi format, and learn a lot about how such a program would work so they can make a playbook to replicate the "expansion by acquisition" program. They are delusional enough to believe they can become the 3rd largest grocer in the USA behind Walmart and Kroger even if they need 20,000 stores vs whatever Kroger has.

They will not become the third largest grocer in America using just their current format and attitude anyway...

This strategy of in line vs. freestanding locations has been going on for a while and flips back and forth. I think it all depends what kind of real estate deals they can find. We know most of their in-line sites appear to be leased but what about the freestanding sites, are those typically owned?

Maybe they think they can find 3,000-4,000 closed drugstore sites around the US to help their expansion. Walgreens buildings would suit them best. CVS and Rite Aid buildings are a bit small. Larger freestanding West Coast/newer Rite Aids could work.

There aren't other chains likely to become available to them to convert in the future---the time for that would have been about 20 years ago when A&P, Penn Traffic, etc. If Rite Aid finally bites the dust, perhaps some of those stores might be attractive, but they would be closer to their usual size, but perhaps smaller than they want these days.

I'd agree that inline vs. freestanding locations probably reflect local real estate markets. Their first DC store, which probably opened in the early 2000s, was an inline location. It was replaced by a new freestanding store nearby. One of their first Cleveland stores--c. 1990 was inline in a former Kroger/Finast. It's still there, although I think it's bigger now. Their early Chicago stores, which opened a little earlier were freestanding.

[storewanderer]

There aren't other chains likely to become available to them to convert in the future---the time for that would have been about 20 years ago when A&P, Penn Traffic, etc. If Rite Aid finally bites the dust, perhaps some of those stores might be attractive, but they would be closer to their usual size, but perhaps smaller than they want these days.

I'd agree that inline vs. freestanding locations probably reflect local real estate markets. Their first DC store, which probably opened in the early 2000s, was an inline location. It was replaced by a new freestanding store nearby. One of their first Cleveland stores--c. 1990 was inline in a former Kroger/Finast. It's still there, although I think it's bigger now. Their early Chicago stores, which opened a little earlier were freestanding.

I hope you are right here but I think there are more chains that have been limping along for years now, that may become available in a similar fashion to Winn Dixie.

Maybe not on the immediate East Coast, but in other regions, I see a number of such chains... whether or not they want to sell out is another matter. Many of these chains are privately held by families or small investment groups, may not have much debt, some are employee owned, so there are a lot of variables that I hope will keep Aldi from taking over any additional conventional supermarket chains.

[pseudo3d]

The deal officially closed today, SEG is now owned by Aldi Sud with plans to convert a "significant number" of stores over the next few years. I wonder if any stores will be on the sale block...

[wnetmacman]

The deal officially closed today, SEG is now owned by Aldi Sud with plans to convert a "significant number" of stores over the next few years. I wonder if any stores will be on the sale block...

I don't believe they intend to sell anything. Stores that do not become Aldi will stay WD or Harvey's, according to Aldi.

[cathandler]

I hope you are right here but I think there are more chains that have been limping along for years now, that may become available in a similar fashion to Winn Dixie.

Maybe not on the immediate East Coast, but in other regions, I see a number of such chains... whether or not they want to sell out is another matter. Many of these chains are privately held by families or small investment groups, may not have much debt, some are employee owned, so there are a lot of variables that I hope will keep Aldi from taking over any additional conventional supermarket chains.

I think Shaw's could become available. There would be some overlap, but probably no antitrust issues. It's well known that Albertsons (and previously, Supervalu) has been trying to unload it for years.

[pseudo3d]

The deal officially closed today, SEG is now owned by Aldi Sud with plans to convert a "significant number" of stores over the next few years. I wonder if any stores will be on the sale block...

I don't believe they intend to sell anything. Stores that do not become Aldi will stay WD or Harvey's, according to Aldi.

Right, but unless Aldi is planning something big, they probably aren't going to run full-size stores for very long. It's been speculated that once SEG finishes with them they'll offload the scraps to another buyer like C&S and/or independents (if not close them entirely).

[wnetmacman]

Right, but unless Aldi is planning something big, they probably aren't going to run full-size stores for very long. It's been speculated that once SEG finishes with them they'll offload the scraps to another buyer like C&S and/or independents (if not close them entirely).

Aldi's Announcement said that they would be opening up to 800 new stores. I wouldn't plan on any scraps.