Save-A-Lot Ltd., the U.S. discount grocer owned by private equity firm Onex Corp., is exploring a sale of all or part of itself, as it grapples with increased competition and a swelling debt load, people familiar with the matter said on Monday.

Save-A-Lot has hired investment bank PJ Solomon to explore a potential deal, said the sources. The move comes as German discounters Lidl and Aldi are putting pressure on Save-A-Lot by expanding across the country, and big box rivals such as Walmart cut prices.

If a deal cannot be inked, Save-A-Lot will also consider options for reducing its debt pile, the people said.

The sources asked not to be identified because the matter is confidential. PJ Solomon declined to comment. Save-A-Lot and Onex did not immediately respond to requests for comment.

St. Ann-based Save-A-Lot has about 1,230 stores and is the second largest "hard" discount grocer in the United States after Aldi, according to credit ratings agency Moody's Investors Service Inc. The so-called hard discount segment covers no-frills grocery stores with limited staffing and product assortment in low-income communities.

Save-A-Lot has a $728 million term loan due in 2023 and a revolving credit line of $250 million, according to Moody's.

The chain's profits have faltered in recent quarters as retailers including Walmart, Target and Costco, which also have grocery departments, put more items on sale to win customers, according to Moody's.

Onex bought Save-A-Lot from U.S. supermarket operator Supervalu Inc. in a $1.4 billion deal in 2016.

In a sign of investor concern over Save-A-Lot's ability to honor its debts, its term loan was trading between 50 and 60 cents on the dollar on Friday, according to financial information provider Refinitiv's Loan Pricing Corp.

In 2017, Save-A-Lot appointed Kenneth McGrath, a former Lidl executive, as chief executive. Lidl acquired 27 Best Market stores on Long Island late last year.

Save-A-Lot, which traces its roots as a discount grocery to Cahokia 40 years ago, moved from its Earth City headquarters to a 162,000-square-foot space in the repurposed Northwest Plaza shopping mall last month.

The move, and associated tax abatement for the company, became a political flashpoint between the St. Louis County Council and St. Louis County Executive Steve Stenger, who moved many St. Louis County offices there under a 20-year lease and has received at least $365,000 in campaign contributions from Northwest Plaza redevelopers David and Robert Glarner.

The council questioned the process for selecting the new proposed 500-employee headquarters, which was led by the St. Louis Economic Development Partnership.

The local property tax abatement and sales tax break on new equipment purchases for Save-A-Lot’s move — amounting to about $577,000 over 15 years — was ultimately taken up by the city of St. Ann after the county council balked.

About a month after moving into its new headquarters, Save-A-Lot laid off about 80 employees.

The Post-Dispatch contributed to this report.