ALDI

Aldi
Private
Industry Retail
Founded June 23, 1913 (June 23, 1913)
July 10, 1946 (split in two parts in 1960, renamed to Aldi Nord and Aldi Süd in 1962)[1]
Founders Karl Albrecht
Theo Albrecht
Headquarters Essen, Germany (Aldi Nord)
Mülheim an der Ruhr, Germany (Aldi Süd)
Number of locations
 9,600
Area served
 Europe
United States
Australia
Key people
 Matthew Barnes (CEO, UK Operations)[2]
Products Food, beverage, toilet paper, sanitary articles
Revenue Increase €53 billion (2010)[3]
Website www.aldi.com

Aldi is a leading global discount supermarket chain with almost 10,000 stores in 18 countries, and an estimated turnover of more than €50bn.[1][4][5] Based in Germany, the chain was founded by brothers Karl and Theo Albrecht in 1946 when they took over their mother's store in Essen which had been in operation since 1913; it is one of the world's largest privately owned companies.[1]

The brothers built up a chain of stores until, by 1960, they owned 300 shops, and split the operation into two separate groups, that later became Aldi Nord, headquartered in Essen; and Aldi Süd, headquartered in Mülheim an der Ruhr.[6][7] The two operate independently, each within specific areas.

In 1962, they introduced the name Aldi (a syllabic abbreviation for Albrecht Diskont),[8] which is pronounced [ˈaldiː]. In Germany Aldi Nord and Aldi Süd have been financially and legally separate since 1966, although both divisions' names may appear (as if they were a single enterprise) with certain store brands or when negotiating with contractor companies. The formal business name is Aldi Einkauf GmbH & Compagnie, oHG.

The individual groups were originally owned and managed by the brothers. Karl Albrecht (d. 2014) retained ownership of Aldi Süd, and with a personal wealth of €17.2 billion, making him the richest man in Germany, while the co-owners of Aldi Nord, Berthold and Theo Albrecht Jr., close behind at €16 billion. Dieter Schwarz, owner of Lidl and Kaufland came in third, with a fortune of €11.5 billion.[9]

Aldi's German operations consist of Aldi Nord's 35 individual regional companies with about 2,500 stores in western, northern, and Eastern Germany, and Aldi Süd's 32 regional companies with 1,600 stores in western and southern Germany.

Internationally, Aldi Nord operates in Denmark, France, the Benelux countries, the Iberian Peninsula, and Poland, while Aldi Süd operates in Ireland, United Kingdom, Hungary, Switzerland, Australia, Austria and Slovenia (Aldi Süd operates as Hofer within the latter two countries mentioned). Both Aldi Nord and Aldi Süd also operate in the United States; Aldi Nord is owner of the Trader Joe's chain, while Aldi Süd operates as "Aldi".

In December 2002, a survey conducted by the German market research institute Forsa found 95% of blue-collar workers, 88% of white-collar workers, 84% of public servants, and 80% of self-employed Germans shop at Aldi.[10] One of Aldi's direct competitors internationally is Lidl.

History

Albrecht grocery store in Essen-Schonnebeck (1958)
Aldi's original store in Essen, still in operation

The earliest roots of the company trace back to 1913, when the mother of Karl and Theo Albrecht opened a small store in a suburb of Essen. Their father was employed as a miner and later as a baker’s assistant. Karl Albrecht was born in 1920, Theo Albrecht in 1922. Theo Albrecht completed an apprenticeship in his mother’s store, while Karl Albrecht worked in a delicatessen.

Karl Albrecht took over a food shop formerly run by F. W. Judt who already advertised that they were the "cheapest food source". Karl Albrecht served in the German Army during World War II. In 1946, the brothers took over their mother’s business and soon opened another retail outlet nearby. By 1950, the Albrecht brothers owned 13 stores in the Ruhr Valley.

The brothers' idea, which was new at the time, was to subtract the legal maximum rebate of 3% before sale. The market leaders at the time, which often were co-operatives, required their customers to collect rebate stamps, and to send them at regular intervals to reclaim their money. The Albrecht brothers also rigorously removed merchandise that did not sell from their shelves, cutting costs by neither advertising nor selling fresh produce, and keeping the size of their retail outlets small.

When the brothers split the company in 1960 over a dispute whether they should sell cigarettes,[11] they owned 300 shops with a cash flow of DM90 million yearly. In 1962, they introduced the name Aldi—short for Albrecht-Diskont. Aldi Nord and Aldi Süd have been financially and legally separate since 1966, although both divisions' names may appear (as if they were a single enterprise) with certain store brands or when negotiating with contractor companies.

Aldi started to expand internationally in 1967, when Aldi Süd acquired the grocery chain Hofer in Austria,[12] Aldi Nord opened its first stores abroad in the Netherlands in 1973,[13] other countries followed. After German reunification and the fall of the Iron Curtain Aldi experienced a rapid expansion. The brothers retired as CEOs in 1993; control of the company was placed in the hands of a private family foundation, the Siepmann Foundation, which safeguards the common interests of the members of the Albrecht family.[5]

Business organization

Germany

Aldi in Germany

The Aldi Nord group currently consists of 35 independent regional branches with approximately 2,500 stores. Aldi Süd is made up of 31 companies with 1,600 stores. The border between their territories is commonly known as ″Aldi-Äquator″ (literally: Aldi equator)[14][15] and runs from the Rhine via Mülheim an der Ruhr, Wermelskirchen, Marburg, Siegen, and Gießen east to just north of Fulda.

The former East Germany is served by Aldi Nord, except for one Aldi Süd in Sonneberg, Thuringia, whose regional office is in Bavaria. The regional branches are organised as limited partnerships with a regional manager for each branch who reports directly to the head office in Essen (Aldi Nord) or Mülheim an der Ruhr (Aldi Süd).

Internationally

Aldi stores worldwide: Aldi Nord in blue, Aldi Süd in orange

The Aldi group operates over 8,000 stores worldwide. A store opens roughly every week in Britain alone.[16]

Aldi Nord is responsible for its stores in Belgium, the Netherlands, Luxembourg, France, Poland, Spain, Denmark, and Portugal, and also operates the Trader Joe's supermarket chain in the United States. Aldi Süd's responsibilities are in the United States (operating under the Aldi name), Austria and Slovenia (as Hofer), United Kingdom, Ireland, Australia, and Switzerland. Aldi Süd's first Switzerland store opened in 2005, while it has operated in Hungary since 2007. Aldi Süd had invested an estimated €800m ($1bn; £670m) in Greece from November 2008 until pulling out on 31 December 2010.[17]

While Aldi Nord has renamed its Dutch and Belgian subsidiaries Combi and Lansa to the Aldi Markt/Aldi Marché brand, Aldi Süd tries to maintain a regional appearance, branding its stores Aldi Süd in Germany, Aldi Suisse in Switzerland, and Hofer in Austria and Slovenia.[18]

Aldi UK Market Share from Kantar Worldpanel
An Aldi in Bethlehem, PA, USA

In October 2013, Aldi opened the 300th store in the United Kingdom.[19] Since launching in the United Kingdom, in Stechford, Birmingham, on April 5, 1990, Aldi has grown consistently, and today has over 550 stores.

While it is still a small player in the United Kingdom, with a grocery share of less than 3.6%, its importance, along with that of continental no-frills competitor Lidl is growing, with half of shoppers in the United Kingdom visiting Lidl or Aldi over Christmas.[20] Aldi has opened stores in affluent locations, including Knutsford & Bury St Edmunds.[21]

In much of Australia, Aldi filled a void in the discount supermarket business that arose when the discount grocery chain Franklins went out of business. Aldi opened its first store in Sydney, 2001.[22]

Aldi Süd expanded to the United States in 1976 under the Aldi banner, having expanded throughout the Eastern and Midwestern U.S., mostly through organic expansion, though it did buy Bottom Dollar Food in late 2014 from Delhaize Group.[23] Aldi Süd announced in early 2015 that it hopes to expand into the already highly competitive Southern California market where Aldi Nord's Trader Joe's is based.[24]

Geographic distribution

Country Name Aldi group Since Outlets
 Germany* Aldi Nord 1961[8] 2,400[8]
Aldi Süd 1962[25] 1,850[25]
 Australia Aldi Süd 2001 402[26]
 Austria* Hofer Süd 1968 430[25]
 Belgium* Aldi Nord 1973 440
 Denmark* Aldi Nord 1977 220
 France* Aldi Marché Nord 1988 900
 Hungary* Aldi Süd 2008 100 [27]
 Ireland* Aldi Süd 1999 111
 Luxembourg* Aldi Nord 1990 12
 Netherlands* Aldi Nord 1975 490
 Poland* Aldi Nord 2008 90
 Portugal* Aldi Nord 2006 52
 Slovenia* Hofer Süd 2005 80
 Spain* Aldi Nord 2002 266 [28]
  Switzerland Aldi Suisse Süd 2005 180[25]
 United Kingdom* Aldi UK Süd 1990 580[29][30]
 United States Aldi Süd 1976 1,400[31]
Trader Joe's Nord 1979 418[32]
total number of Aldi Nord stores 4,854
total number of Trader Joe's stores 418
total number of Aldi Süd stores 5,105
combined total of Aldi stores 10,377

Asterisks (*) indicate some European country as a member of the European Union

Business practices

Some Aldi practices are common in German supermarkets but largely unique to Aldi in other countries. These include the system of metal gates and turnstiles forcing customers to exit through the checkout, and charging customers for shopping bags. Until 2004, Aldi stores accepted only cash (since then, German stores have accepted domestic Girocard debit cards). Debit cards also are accepted in the United States, the United Kingdom, Austria, Belgium, Denmark, France, Portugal, Spain, the Netherlands, Switzerland, Ireland, Australia, Slovenia, and Hungary. Electronic Benefit Transfer cards are also accepted in the United States.[33]

Outside of the United States and France, Aldi generally does not accept credit cards, though Aldi Australia accepts MasterCard and Visa for a 0.5% surcharge and Aldi Ireland accepts Visa/MasterCard with no surcharge. In the United States, as of February, 2016, Aldi accepts all four major credit cards, and from the beginnings all credit cards "Carte Bleue" (Visa, American Express or MasterCard) in France due to the banking system in France where debit cards don't exist ; prior to this, Aldi only accepted debit cards. Aldi has accepted Visa/MasterCard without surcharge throughout the United Kingdom from October 2014, which had previously been accepted only in Scotland,[34] and throughout Germany from September 2015.[35][36][37]

In-store layout

Aldi Nord interior
The inside of an Aldi store in Hungary

Aldi specialises in staple items, such as food, beverages, toilet paper, sanitary articles, and other inexpensive household items. Many of its products are own brands, with the number of other brands usually limited to a maximum of two for a given item. This increases sales for each article, and lets Aldi shops be smaller than stores with more brand choice. This practice let Aldi avoid price tags, even before the introduction of barcode scanners. On many of its own brands, if feasible, Aldi will place multiple barcodes on products to speed the check out process.

Branded products carried include HARIBO in Germany, Knoppers in Belgium and France, Marmite and Branston Pickle in the United Kingdom; and Vegemite and Milo in Australia. In the United States, major brand-name products, such as Oscar Mayer bacon, sometimes are offered as a 'special purchase': name-brand items that Aldi has received at a special price from the vendor and can offer for a reduced price. Unlike most shops, Aldi does not accept manufacturers' coupons, although some USA stores successfully experimented with store coupons (e.g. $10 off a $25 purchase).

In addition to its standard assortment, Aldi has weekly special offers, some of them on more expensive products such as electronics, tools, appliances, or computers, usually from Medion. Discount items can include clothing, toys, flowers, and gifts. Specials have strict limits on quantities, and are for one week. Aldi's early computer offers in Germany (such as a Commodore 64 back in 1987) resulted in those products selling out in a few hours.[38]

Aldi is the largest wine retailer in Germany[39] Some Australian stores now sell alcoholic beverages. Some USA stores also sell alcoholic beverages (mainly beer and wine) where permitted by local state laws.

Aldi mainly sells exclusively produced, custom-branded products (often identical to and produced by major brands[40]) with brand names including Grandessa and Fit & Active. USA, Australian, and UK Aldi stores also feature bargain-priced, gourmet foods imported from Germany.

Aldi's gift certificates must be paid for in cash.

Advertising policy

Aldi has a policy in Germany of not advertising, apart from a weekly newsletter of special prices called "Aldi informs" that is distributed in stores and by direct mail, and often printed in local newspapers. It claims this is a cost saving that can be passed on to consumers. In Germany, Aldi has never used an external advertising agency.[10]

In the United States, it advertises in newspapers and on television, as well as print ads distributed in stores, and via the Internet.

In the United Kingdom, print and television ads have appeared since May 2005.

In Australia Television Advertising is common and the current ads are listed on the Australian Web Site.[41]

Reputation

Originally, Aldi shops were often ridiculed as being cheap shops selling low-quality goods, whose customers could not afford to shop elsewhere.[42]

In the United Kingdom, Aldi has won Supermarket of the Year two years in a row (2012/13),[43] and in 2013, Aldi won the Grocer of the Year Award.[44] However, in February 2015, Aldi narrowly lost to Waitrose for the title of Supermarket of the Year 2015. In April 2015, Aldi overtook Waitrose to become the United Kingdom’s sixth-largest supermarket chain.[45]

In the United States, due to the relatively low staffing of Aldi locations compared to other supermarket chains, Aldi has a reputation of starting employees out at significantly higher than minimum wage, unusual among American supermarkets.[46][47]

In Ireland, Aldi has been accused of a "lack of corporate responsibility" to their farmer suppliers by the Irish Farmers' Association.[48]

Subsidiaries and joint ventures

Aldi Talk

Main article: Aldi Talk

Aldi has a mobile virtual network operator in Germany, Belgium and the Netherlands, called Aldi Talk. Aldi also operates a similar network in Australia using Telstra's 3G network, called Aldimobile.[49]

Aldi Liquor

Aldi has a liquor website serving the east coast of Australia.[50] The site launched in mid-2013, and was a world-first move into online retailing for Aldi.[51]

The Aldi Liquor website has been shortlisted for a 2014 ORIA award for "Best New Online Retailer".[52]

Diskont

In Austria through its subsidiary Hofer, Aldi has a joint venture with the local petrol retailer Free Energy (FE) Trading GmbH, to create some no frills petrol stations called Diskont.[53] The 66 stations are on or nearby the stores, providing self-serve unleaded or diesel fuel by card-operated pumps. These have been in operation since 2009.

Criticism

In May 2004, German Aldi stores sold garden furniture made of Indonesian Meranti wood. Because it was not able to show that it was sourced legally (70% of Indonesian timber is illegally logged), environmental organisations pressured Aldi to stop selling the furniture.[54] Within days Aldi announced that all of the timber used in its products would bear the FSC certificate, which promotes sustainable forestry.[55]

In 2008, Aldi UK demolished a historic coaching inn in Burpham, having previously agreed not to until planning consent had been received.[56] Aldi were later found to breach the planning conditions that had been imposed on them [57]

In 2010, over 200 Aldi store managers in the United States filed charges over unfair labour practices, claiming they were illegally classified as exempt from overtime pay, receiving a fixed salary regardless of the actual number of hours worked. The plaintiffs claimed that instead of managing, most of the time was spent stocking shelves, cleaning spills and serving customers. Aldi store managers are not responsible for hiring, firing or promoting employees.[58] In 2011 the lawsuit was settled under a confidential agreement and the complaint was dismissed with prejudice.[59]

In January 2013, Aldi Germany was caught up in the horse meat contamination scandal along with Tesco and others.[60] On 8 February 2013, the store group admitted that some of its frozen lasagne and spaghetti bolognese products contained 30%–100% horse meat rather than the advertised beef and that it had terminated its relationship with the supplier responsible for the adulterated product.[61]

In January 2014, following a mislabelling of turkey meat as halal, Aldi apologised and said, "Aldi does not label any products as halal-certified".[62] In May 2015, Aldi apologised again after it sold pork products labelled as halal.[63][64]

References

  1. 1 2 3 Thomas Rudolph (1 Oct 2011). Diversity in European Marketing: Text and Cases. Springer Science & Business Media. p. 141.
  2. ↑ "Joint chiefs take over at Aldi UK". Thegrocer.co.uk. Retrieved 29 January 2014.
  3. ↑ "Obituary: Theo Albrecht."
  4. ↑ "Working for Alsi". aldi.
  5. 1 2 Stefan Wagstyl (21 July 2014). "Karl Albrecht, Aldi co-founder, 1920-2014". The Financial Times.
  6. ↑ "Impressum" ALDI Nord. Retrieved on 14 February 2011. "ALDI Einkauf GmbH & Co. oHG Eckenbergstraße 16 45307 Essen."
  7. ↑ "Impressum." Aldi Süd. Retrieved on 14 February 2011. "Burgstraße 37 45476 Mülheim an der Ruhr Amtsgericht Duisburg HRA 8577."
  8. 1 2 3 http://www.aldi-nord.de/aldi_ueber_uns_814.html Retrieved on 22 February 2014.
  9. ↑ Aldi dynasty continue to lead German rich list.Published: 10 October 11, 15:32 CET
  10. 1 2 Steinhoff, Jürgen; Helga Hein; Ingrid Lorbach (16 December 2002). "Hinter den Kulissen des Discounters". Stern (in German). Retrieved 4 August 2010.
  11. ↑ Graham Ruddick (7 Dec 2012). "Billionaire Aldi heir Berthold Albrecht dies at 58". the Telegraph.
  12. ↑ "ALDI Süd - About ALDI Süd(German)".
  13. ↑ "ALDI Nord - About us(German)".
  14. ↑ Hielscher, Henryk (28 July 2014). "Sieben Leitsätze : Der Aldi-Äquator trennt das Land" (in German). Wirtschaftswoche. Retrieved 1 January 2015.
  15. ↑ Wilkes, Christoph; Wilkes, Johannes (2012). Der Aldi-Äquator: 4 Jungs, 20 Filialen, 660 Kilometer [The Aldi equator: 4 guys, 20 stores, 660 kilometer] (in German). Fischer Taschenbuch Verlag. ISBN 978-3-596-19471-1.
  16. ↑ Wallop, Harry (30 June 2008). "Aldi pledges to open a new store every week". London: The Telegraph. Retrieved 18 February 2012.
  17. ↑ "Aldi quits Greece" (in German). www.german-retail-blog.com. 23 July 2010. Retrieved 18 February 2012.
  18. ↑ Hofer. "Hofer - Start". Retrieved 29 October 2014.
  19. ↑ Yeomans, Jon. "Aldi, Lidl and Waitrose seize share as market polarises". Thegrocer.co.uk. Retrieved 29 January 2014.
  20. ↑ http://www.ft.com/fastft/260632/half-of-uk-shoppers-visited-lidl-aldi-over-xmas
  21. ↑ "BBC News – Graduate jobs: The hunters and the hunted". Bbc.co.uk. 6 July 2010. Retrieved 29 January 2014.
  22. ↑ http://www.abc.net.au/7.30/stories/s238058.htm
  23. ↑ http://www.marketwatch.com/story/delhaize-group-to-sell-66-bottom-dollar-food-store-locations-2014-11-05?reflink=MW_news_stmp
  24. ↑ http://www.myfoxla.com/story/29298998/aldi-to-open-45-stores-in-southern-california-by-2016
  25. 1 2 3 4 "Aldi Süd Facts and Figures". Archived from the original on 22 December 2008. Retrieved 6 December 2008.
  26. ↑ ALDI. "Find your Local ALDI Store - ALDI Australia". storelocator.aldi.com.au. Retrieved 2016-03-28.
  27. ↑ "Aldi stores in Hungary".
  28. ↑ "Los Supermercados Aldi más próximos". Retrieved 7 April 2016.
  29. ↑ Food and Drink (29 October 2013). "How Aldi won the class war – and became the fastest-growing supermarket in Britain". London: Telegraph. Retrieved 7 December 2014.
  30. ↑ "Aldi Stores UK (AldiUK) on Twitter". Twitter.com. Retrieved 7 December 2014.
  31. ↑ ALDI Honored with Retailer of the Year and Product of the Year Wins. 12 February 2014.
  32. ↑ "Where in the dickens you can find a Trader Joe's?" (PDF). Trader Joe's. April 2014. Retrieved 13 May 2014.
  33. ↑ "ALDI US - FAQs". Retrieved 21 March 2015.
  34. ↑ "Aldi: Credit and Bank Cards now accepted". Retrieved 14 November 2014.
  35. ↑ "ALDI Nord website". Retrieved 8 October 2015.
  36. ↑ "ALDI Süd website". Retrieved 8 October 2015.
  37. ↑ "Press release: Aldi to take credit cards" (PDF). Retrieved 8 October 2015.
  38. ↑ "HCM: The Home Computer Museum". Retrieved 9 February 2007.
  39. ↑ "GERMANY: Aldi is the biggest wine retailer in Germany". Progressive Newsletter 79. Progressive Group International Newsletter. 20–26 March 2006. Retrieved 18 February 2012.
  40. ↑ A list of no-name brands and the major brand companies behind them for Germany. Aldi relies on re-labeled major brand products.
  41. ↑ https://www.aldi.com.au/en/about-aldi/tv-commercials/
  42. ↑ Waltraud Schwab (19 June 2010). "Arme Discounterkunden: Kasse dank Masse" (in German). Die Tageszeitung. Retrieved 18 February 2012.
  43. ↑ "Aldi wins Supermarket of the Year at Which? awards for second year in a row".
  44. ↑ "Aldi scoops Grocer of the Year Award at Grocer Golds".
  45. ↑ "Aldi overtakes Waitrose to become UK’s sixth-largest supermarket chain".
  46. ↑ "Working at Aldi – Reviews of Jobs at Aldi". Jobitorial.com. Retrieved 29 January 2014.
  47. ↑ "Aldi, Inc. Employer Wages, Hourly Wage Rate". PayScale. 3 January 2014. Retrieved 29 January 2014.
  48. ↑ "IFA hold protest outside Aldi's Letterkenny store over beef prices". 19 September 2014. Retrieved 19 September 2014.
  49. ↑ Sharma, Krishan (5 March 2013). "List of Aldi and Kogan's budget phone plans". BIT (Haymarket Media). Retrieved 9 March 2013.
  50. ↑ "ALDI LIquor". ALDI.com.au. Retrieved 2 July 2014.
  51. ↑ Speedy, Blair (22 June 2013). "Aldi goes online to brew a new battle". The Australian (News Limited). Retrieved 2 July 2014.
  52. ↑ Phillips, Campbell (18 June 2014). "Meet the Finalists of the StarTrack Online Retail Industry Awards 2014". Power Retail (Groundswell Media Pty Ltd). Retrieved 2 July 2014.
  53. ↑ "Diskont homepage". FE-Trading GmbH. Retrieved 2014-10-26.
  54. ↑ "Umwelt:Aldi auf dem Holzweg" (in German). Spiegel Online. 20 May 2004. Archived from the original on 7 December 2008. Retrieved 4 February 2007.
  55. ↑ "Protestaktionen bringen Discounter zum Umdenken" (in German). 26 May 2004. Archived from the original on 28 September 2007. Retrieved 4 February 2007.
  56. ↑ Report of the Borough Honorary Remembrancer for the Municipal Year 2006/07 PDF (2.19 MB),
    Roger Marjoribanks, Hon. Remembrancer, Borough of Guildford (Accessed 3 May 2009)
  57. ↑ "Guildford Aldi store served temporary stop notice after breaching planning conditions". Guildford Get Surrey. Retrieved 16 April 2016.
  58. ↑ Cho, Janet (20 January 2010). "Aldi grocery store employees accuse chain of violating federal wage laws". Cleveland.com. Retrieved 18 February 2012.
  59. ↑ https://ecf.ohnd.uscourts.gov/doc1/14115880895
  60. ↑ "Horsemeat found in beefburgers on sale in UK and Ireland". BBC News. 15 January 2013. Retrieved 17 January 2013.
  61. ↑ "Aldi Frozen Ready Meals 100% Horsemeat". Sky News. 8 February 2013
  62. ↑ "UK: Aldi apologises for mislabelled turkey crown". Eat-halal. 3 January 2014. Retrieved 9 September 2015.
  63. ↑ Smith, Jennifer (17 May 2015). "Muslim fury after Aldi is found selling ‘halal’ Indian-style snacks that contained forbidden pork". Daily Mail. Retrieved 9 September 2015.
  64. ↑ "Aldi apologises after black pudding is incorrectly labelled as halal-certified". The Telegraph. 18 May 2015. Retrieved 9 September 2015.

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