Discount grocery giant Aldi has inked a deal to acquire about 400 Winn-Dixie and Harveys Supermarket locations in Alabama, Florida, Georgia, Louisiana and Mississippi. The acquisition will close in the first half of 2024.

Under the agreement, Aldi will acquire all the outstanding shares of Southeastern Grocers, the parent company of the two grocery chains, for cash. Aldi, which is the U.S. arm of a German supermarket giant, did not disclose the purchase price.

Simultaneously, Southeastern Grocers is selling its Fresco y Más operations — 28 stores and four pharmacies — to investor Fresco Retail Group.

“The time was right to build on our growth momentum,” Aldi CEO Jason Hart said in a statement, adding that the company plans to add another 120 Aldi locations this year to end 2023 with more than 2,400 stores nationwide.

After the sale is concluded, Aldi says it will evaluate the locations to determine which ones to convert to the Aldi brand and format. Stores not converted will continue to operate as Winn-Dixie and Harveys.

Grocery sales have proven resilient recently, up 2.3% in July compared to the same month a year ago, according to the Census Bureau. Food inflation is a major component of the sales growth, however, with food prices up 4.9% in July year-over-year.

Late last year, a larger consolidation was announced with the proposed $24.6B merger of Kroger and Albertsons, which would occur at the beginning of 2024 if approved by the Federal Trade Commission. A recent lawsuit against the deal was dismissed.

Kroger is the largest grocery-specific chain by sales, according to Supermarket News, while Albertsons is second, though non-grocery food sellers such as Walmart and Amazon sell more. The Kroger-Albertsons deal would result in ownership of more than 5,000 stores under one umbrella.

Physical grocery stores saw a challenge from online sales during the height of the pandemic, but that has receded in more recent quarters as online grocery sales stalled. Online grocery sales totaled $7.2B in July, down 7% compared to the same month last year, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey conducted in late July.