Dive Brief:

• Southeastern Grocers has agreed to sell 23 Bi-Lo and Harveys Supermarket stores to a pair of buyers, continuing an effort to reduce its store count, according to an email from PJ Solomon, the chain’s financial advisor on the transactions.
• The grocer plans to sell 20 Bi-Lo stores to Alex Lee, the North Carolina-based owner of Lowes Foods and Merchants Distributors. In addition, B&T Foods is acquiring two Bi-Lo locations and a single Harveys store from Southeastern.
• ​The transfer to Alex Lee and B&T Foods of the affected grocery stores, which according to The Post and Courier of Charleston, South Carolina, are located in South Carolina and Georgia, will begin in September and should be completed in November. Alex Lee will convert five of the Bi-Lo locations into Lowes stores and put the KJ’s IGA name on the remaining locations, the newspaper reported.

Dive Insight:

Southeastern Grocers’ decision to reduce its dwindling fleet of supermarkets by 23 more stores is the latest step in an effort to refashion itself into a leaner, more agile supermarket operator. 

The company announced in June that it planned to exit the Bi-Lo banner, and kicked off that initiative by announcing the sale of 46 stores carrying the brand to Food Lion and revealing that it was exploring the possible sale of the remaining Bi-Lo locations. Southeastern Grocers also said at the time that it was selling 16 Harveys stores.

In a suggestion that it is stepping up its drive to reduce its portfolio, Southeastern expects the latest stores it is selling to entirely transition to their new owners within two months. By comparison, when the company announced the previous sale, it said the stores it was parting with would remain under their current brands until the end of 2020.

Southeastern’s divestiture of another group of stores could help the grocer focus more heavily on its prized Winn-Dixie chain, which has languished in years past as the company navigated financial turmoil that included a bankruptcy filing in 2018. The company closed 94 stores in the run-up to its bankruptcy filing, then shuttered another 22 stores, including seven Winn-Dixie locations, eight months after emerging from its financial reorganization.

Even as it has acted to eliminate the Bi-Lo brand and scale back the Harveys banner, Southeastern has taken steps to expand Winn-Dixie's footprint by agreeing to convert eight former Lucky's Market and Earth Fare stores to the retail brand.

Winn-Dixie, a Florida staple for decades that has struggled to keep pace with Publix, represents Southeastern’s best chance to steady itself in the highly competitive markets where it does business, according to analysts. The company, which also owns the Hispanic-focused Fresco y Más banner, has recently put money into refreshing the Winn-Dixie fleet with new branding, service departments and other enhancements, and launched a new advertising campaign.

As Southeastern slims down, other grocers are beefing up their store base by buying up the divested properties. The more than three dozen locations Food Lion acquired helps bolster the chain in markets where it's already popular. And in this latest deal, Alex Lee will nearly double the size of its KJ's Market banner, which it took on when it acquired W. Lee Flowers & Co last year.