Winn-Dixie deal could put Aldi at No. 2 in metro Orlando grocery stores

Aldi’s acquisition of Winn-Dixie could put the discount grocery chain in contention for the second most grocery stores in the Orlando area, but how many stores will actually be changed is not yet known.

Illinois-based Aldi already has more than 40 stores in Orange, Seminole, Lake, Osceola and Volusia counties, with Jacksonville-based Winn-Dixie clocking in with about 30.

Lakeland-based Publix, meanwhile, dwarfs its competitors with more than 175 in those counties. Walmart has more than 60, which means how many Winn-Dixie stores convert to Aldi locations could determine Orlando’s second-largest grocer by store count.

Winn-Dixie stores tend to be in older parts of town and Aldi stores in areas that have grown, said Justin Greider, a senior vice president and Florida retail lead at real estate firm JLL.

“There’s a really cohesive nature to the merger between the two,” Greider said. “It’s going to allow Aldi to capture the scale of Winn-Dixie’s footprint … and meet a more value-oriented customer’s needs in a better way.”

The lack of overlap is because Aldi came to Florida just 15 years ago and Winn-Dixie hasn’t added many stores in recent years, Greider said.

The move cements an Orlando grocery store scene divided by premium shopping locations such as Publix or Whole Foods and stores more for bargain shoppers like Aldi and Walmart.

“The conventional supermarket, except for Publix, has been disappearing,” said retired supermarket analyst David Livingston. His background is in analyzing competition for grocery chains and market research on new store locations.

Consumers have been spending more on nicer items and experiences and less on commodity items since the Great Recession, Greider said. Those trends became amplified after the coronavirus pandemic.

Winn-Dixie was sort of left in the middle, and anything in the middle was “squished,” Greider said.

Aldi, meanwhile, has been growing its low-price brand, where customers must bring their own bags or buy reusable ones at the store, saving the grocer the cost of plastic bags.

Customers must also use a quarter to unlock their shopping carts. The 25 cents is returned when the cart is brought back, so Aldi doesn’t have to hire more workers to gather them up.

“The time was right to build on our growth momentum and help residents in the Southeast save on their grocery bills,” CEO Jason Hart said in a news release last week. “The transaction supports our long-term growth strategy across the United States, including plans to add 120 new stores nationwide this year to reach a total of more than 2,400 stores by year-end.”

Across the Southeast, Publix has 1,350 stores, with 859 in Florida. Aldi has 209 in Florida, with eight more expected to open by the end of the year.

Hart said Aldi would continue operating Winn-Dixie and Harveys Supermarket, also acquired from Jacksonville-based Southeastern Grocers, as it evaluates which stores will become Aldi locations.

Customer need, availability of other grocery options, traffic patterns and population density will be factors in the “multi-year” conversion, an unsigned statement from Aldi said.

Livingston, however, doesn’t think Aldi will run Winn-Dixie stores long term, citing Aldi’s smaller locations and the struggles Winn-Dixie has faced over the years, such as its parent company’s bankruptcy in 2018.

“Aldi does not want to be operating big grocery stores,” Livingston said. “That’s not what they do.”

Livingston pointed to Aldi’s 2015 acquisition of 66 Bottom Dollar stores. According to a report at the time in Supermarket News, 30 of those stores were planned to reopen under the Aldi banner while the rest were planned to be sold or subleased.

The deal for Winn-Dixie is bigger, with Aldi gaining 400 Winn-Dixie and Harveys Supermarket stores.

The Winn-Dixie stores that become Aldi locations will likely be made to fit Aldi’s smaller footprint, Greider and Livingston both said.

Greider said the two Orlando Lucky’s stores Aldi took over after that chain closed in Central Florida were downsized.

“Historically, Aldi has been very focused on maintaining their exact prototype,” Greider said. “I would be surprised if they convert a Winn-Dixie to an Aldi and don’t convert the size to match the typical Aldi prototype.”