For Aldi, the acquisition would add approximately 400 locations across Alabama, Florida, Georgia, Louisiana and Mississippi.
Lidl, another German discount grocer, has also been rapidly expanding in the U.S. since its first store outside Europe opened in 2017. There are more than 170 Lidl
stores on the East Coast, but the chain has struggled to make further inroads in the U.S. Earlier this year, the company announced itfor traditional supermarkets, according to an analysis from Coresight Research released last year. With the rapid expansion, “retailers with significant store overlap with discounters could be at serious risk of margin pressure in the coming years,” the report said.
The merger of Aldi and Winn-Dixie and Harveys is in part an answer to those struggles, said Neil Saunders, managing director of analytics company GlobalData.“Under the stewardship of Aldi, the business will have access to much deeper pockets and a ruthlessly efficient and effective supply chain which will help reduce costs,” he said. “This is important as shoppers at Winn-Dixie are relatively price sensitive and demand a strong value for money proposition.
Saunders also noted that the proposed merger is another example of consolidation in the grocery market. In October, grocery giant Krogerfor $24.6 billion, a move that would merge two of the country’s largest grocery chains. While the deal has yet to be approved, critics have raised concerns that such a consolidation could lead to higher prices for consumers already battling inflation.
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