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Aldi

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Title: Aldi  
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Subject: The World's Billionaires, Lidl, Trader Joe's, List of supermarket chains in Belgium, List of supermarket chains in Denmark
Collection: 1913 Establishments in Germany, Arts and Crafts Retailers, Companies Based in North Rhine-Westphalia, Companies Established in 1913, Discount Stores, Discount Stores of the United States, German Brands, No Frills, Privately Held Companies of Germany, Retail Companies of the United Kingdom, Supermarkets of Australia, Supermarkets of Belgium, Supermarkets of Denmark, Supermarkets of France, Supermarkets of Germany, Supermarkets of Poland, Supermarkets of Portugal, Supermarkets of Slovenia, Supermarkets of Spain, Supermarkets of Switzerland, Supermarkets of the Netherlands, Supermarkets of the United Kingdom, Supermarkets of the United States
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Aldi

Aldi
Private
Industry Retail
Founded 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, household essentials
Revenue Increase 53 billion (2010)[3]
Website www.aldi.com

Aldi (stylized as 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 father'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 in German. 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 house 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 brothers Karl Albrecht and Theo Albrecht. 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, 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.

Contents

  • History 1
  • Business organization 2
    • Germany 2.1
    • Internationally 2.2
    • Geographic distribution 2.3
  • Expansion plans 3
  • Business practices 4
    • In-store layout 4.1
    • Advertising policy 4.2
  • Reputation 5
  • Subsidiaries and joint ventures 6
    • Aldi Talk 6.1
    • Aldi Liquor 6.2
    • Diskont 6.3
  • Criticism 7
  • References 8
  • External links 9

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 house 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 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

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]

Though already in the central and eastern portions of the US, Aldi Süd announced in early 2015 that it hopes to expand into the already highly competitive Southern California market where Aldi Nord's Trader Joes also resides.[23]

Geographic distribution

Country Name Aldi group Since Outlets
 Germany Aldi Nord 1961[8] 2,400[8]
Aldi Süd 1962[24] 1,850[24]
 Australia Aldi Süd 2001 374
 Austria Hofer Süd 1968 430[24]
 Belgium Aldi Nord 1973 440
 Denmark Aldi Nord 1977 220
 France Aldi Nord 1988 900
 Hungary Aldi Süd 2008 100 [25]
 Ireland Aldi Süd 1999 111
 Luxembourg Aldi Nord 1990 12
 Netherlands Aldi Nord 1975 490
 Poland Aldi Nord 2008 90
 Portugal Aldi Nord 2006 40
 Slovenia Hofer Süd 2005 80
 Spain Aldi Nord 2002 250 [26]
  Switzerland Aldi Suisse Süd 2005 180[24]
 United Kingdom Aldi UK Süd 1990 580[27][28]
 United States Aldi Süd 1976 1,400[29]
Trader Joe's Nord 1979 418[30]
total number of Aldi Nord stores 4,842
total number of Trader Joe's stores 418
total number of Aldi Süd stores 5,110
combined total of Aldi stores 10,370

Expansion plans

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.[31]

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, Aldi accepts Discover Card at some locations and is currently testing the viability of accepting all major credit cards.[32] Aldi has accepted Visa/MasterCard without surcharge throughout the United Kingdom from October 2014, which had previously been accepted only in Scotland,[33] and throughout Germany from September 2015.[34][35][36]

Another practice at Aldi stores in Europe, Australia, and the United States is requiring a coin, or an Aldi-issued reusable token, to use a shopping cart. When the coin or token is inserted, the cart is unlocked from the other carts. When the cart is returned, the customer is refunded their coin, effectively costing the customer only the time to return the cart. This is a common practice in some European supermarkets. Likewise when Aldi opened its stores in Australia, coin deposit for carts was already commonplace especially in low socioeconomic areas to counter theft and subsequent repurposing of trolleys by customers.

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 bar code scanners. Aldi's, on many of its in-house brands will place, if feasible, multiple bar codes on products to speed the check out process.

Branded products carried include HARIBO in Germany, 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.[37]

Aldi is the largest wine retailer in Germany[38] 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[39]) 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 adds are listed on the Australian Web Site.[40]


Reputation

Originally, Aldi shops were often ridiculed as being cheap shops selling low-quality goods, whose customers could not afford to shop elsewhere.[41]

In the United Kingdom, Aldi has won Supermarket of the Year two years in a row (2012/13),[42] and in 2013, Aldi won the Grocer of the Year Award.[43] 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 [44]

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.[45][46]

In Ireland, Aldi has been accused of "lack of corporate responsibility" to their farmer suppliers by the Irish Farmers' Association (IFA).[47]

Subsidiaries and joint ventures

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.[48]

Aldi Liquor

Aldi has a liquor website serving the east coast of Australia.[49] The site launched in mid-2013, and was a world-first move into online retailing for Aldi.[50]

The Aldi Liquor website has been shortlisted for a 2014 ORIA award for "Best New Online Retailer".[51]

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.[52] 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 2004, German Aldi stores sold garden furniture made of


p

  • Official website
  • Aldi Australia, halal products

External links

  1. ^ a b c
  2. ^
  3. ^ "Obituary: Theo Albrecht."
  4. ^
  5. ^ a b
  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. ^ a b c 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. ^ a b
  11. ^
  12. ^
  13. ^
  14. ^
  15. ^
  16. ^
  17. ^
  18. ^
  19. ^
  20. ^ http://www.ft.com/fastft/260632/half-of-uk-shoppers-visited-lidl-aldi-over-xmas
  21. ^
  22. ^ http://www.abc.net.au/7.30/stories/s238058.htm
  23. ^ http://www.myfoxla.com/story/29298998/aldi-to-open-45-stores-in-southern-california-by-2016
  24. ^ a b c d
  25. ^
  26. ^
  27. ^
  28. ^
  29. ^ ALDI Honored with Retailer of the Year and Product of the Year Wins. 12 February 2014.
  30. ^
  31. ^
  32. ^
  33. ^
  34. ^
  35. ^
  36. ^
  37. ^
  38. ^
  39. ^ A list of no-name brands and the major brand companies behind them for Germany. Aldi relies on re-labeled major brand products.
  40. ^ https://www.aldi.com.au/en/about-aldi/tv-commercials/
  41. ^
  42. ^
  43. ^
  44. ^
  45. ^
  46. ^
  47. ^
  48. ^
  49. ^
  50. ^
  51. ^
  52. ^
  53. ^
  54. ^
  55. ^
  56. ^
  57. ^ "Aldi Frozen Ready Meals 100% Horsemeat". Sky News. 8 February 2013
  58. ^
  59. ^
  60. ^

References

In January 2014, following a mislabelling of turkey meat as halal, Aldi apologised and said, "Aldi does not label any products as halal-certified".[58] Subsequently in May 2015, Muslims were reported to be upset with Aldi when it sold pork products, labelled as halal.[59][60]

In 2013, Aldi Germany was caught up in the horse meat contamination scandal along with Tesco and others.[56] 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.[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.[55]

[54] certificate, which promotes sustainable forestry.FSC Within days Aldi announced that all of the timber used in its products would bear the [53]

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