A Winn Dixie purchasing cart is seen within the car parking zone of the Palm Harbor, Fla., retailer on Wednesday, Aug. 16, 2023.

Chris Urso/AP

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Chris Urso/AP

A Winn Dixie purchasing cart is seen within the car parking zone of the Palm Harbor, Fla., retailer on Wednesday, Aug. 16, 2023.

Chris Urso/AP

Discount grocer Aldi mentioned Wednesday it plans to purchase 400 Winn-Dixie and Harveys supermarkets within the southern U.S.

Under a proposed merger settlement, Aldi will purchase all excellent shares of Jacksonville, Florida-based Southeastern Grocers Inc., the dad or mum firm of Winn-Dixie and Harveys. If the deal is permitted by regulators, it is anticipated to shut within the first half of 2024.

Financial phrases of the deal weren’t disclosed. Both Southeastern Grocers and Aldi are personal corporations. Aldi is predicated in Germany with a U.S. headquarters in Batavia, Illinois.

Aldi mentioned the deal helps its long-term progress technique within the U.S., the place it expects to have 2,400 shops by the tip of this yr. The Winn-Dixie and Harveys supermarkets it is buying are primarily in Alabama, Florida, Georgia, Louisiana and Mississippi.

Aldi mentioned it should convert some areas to its personal model and format, which cuts prices with options like restricted choice and self-bagging. But it should function some shops below the Winn-Dixie and Harveys manufacturers.

Neil Saunders, an analyst with GlobalData Retail, mentioned the deal is uncommon for Aldi, which normally opens its personal shops. He mentioned it suggests Aldi needs to experiment with extra conventional supermarkets that do not observe its low-cost mannequin. He additionally mentioned Aldi’s deep pockets and environment friendly provide chain will make Southeastern’s shops extra aggressive.

The deal comes amid wider consolidation within the grocery business as prospects more and more defect to huge field shops like Walmart. In the yr ending June 30, Walmart managed 25% of U.S. grocery gross sales, in keeping with Numerator, a market analysis agency. Aldi managed 2% whereas Southeastern Grocers managed lower than 1%. Aldi’s share had grown 0.2% since 2021, whereas Southeastern Grocers’ share was down 0.2%.

Last fall, Kroger and Albertsons — two of the most important U.S. grocery chains — introduced plans to merge in a $20 billion deal. Regulators are reviewing that plan now; if it is permitted, it’s anticipated to shut early subsequent yr. Together, Kroger and Albertsons at present management round 18% of the U.S. grocery market, Numerator mentioned.

But not everybody helps consolidation. The United Food and Commercial Workers union, which represents nearly all of hourly employees at Kroger in addition to employees at Albertsons-owned Safeway, voted in May to oppose the merger, saying the businesses weren’t being clear about its affect on jobs.

And on Wednesday, the secretaries of state of seven states with almost 5,000 Kroger and Albertsons shops — together with Colorado, Arizona, Minnesota and Maine — despatched a letter to the Federal Trade Commission opposing the merger, saying it might restrict client selection and provides the shops no aggressive incentive to carry down costs.

Southeastern Grocers additionally plans to promote its 28 Fresco y Mas shops to Fresco Retail Group, an funding firm, which is able to proceed to function them below the identical model.