Aldi Expansion Special Report

German grocer expands while avoiding construction risk. One of the nation’s fastest-growing supermarket chains over the past two years, Aldi has inked a deal that will significantly increase its Southeast market presence. Under the agreement, the company will acquire Southeastern Grocers, owner of Winn-Dixie and Harveys Supermarkets, throughout Florida, Alabama, Georgia, Louisiana and Mississippi. Anticipated to close in the first half of 2024, the acquisition will more than triple the discount grocer’s current Florida footprint, which comprises 210 stores, while also expanding its reach in tertiary and rural areas of the Southeast. A portion of the acquired stores will be converted to the Aldi brand, with others keeping their original name. The latter is most likely in markets where overlap currently exists between the grocers. Shopping center owners with a Winn-Dixie or Harveys that is not converted will see their circumstances adjust nominally, apart from operational changes and potential property upgrades. Meanwhile, owners with a store slated for Aldi conversion will see the credit quality of their grocery tenants improve, equating to greater interest from active investors.