Aldi Explained

Type:Private
Industry:Retail
Foundation:
(split in two parts in 1960, renamed to Aldi Nord and Aldi Süd in 1962)[1]
Founders:Karl and Theo Albrecht
Location:Essen, Germany (Aldi Nord)
Mülheim, Germany (Aldi Süd)
Locations:12,596 (2022)
Area Served:United States
Australia
China
Revenue:Aldi Nord: €27 billion (2022)[2]
Aldi Süd: €76 billion (2022)[3]
Num Employees:Aldi Nord: 72,811 (2022)[4]
Aldi Süd: 201,361 (2022)[5]
Subsid:Trader Joe's (Aldi Nord)
Hofer (Aldi Süd)
Winn-Dixie (Aldi Süd)
Harveys Supermarkets (Aldi Süd)

Aldi (stylised as ALDI[6]) is the common company brand name of two German multinational family-owned discount supermarket chains operating over 12,000 stores in 18 countries.[7] [8] The chain was founded by brothers Karl and Theo Albrecht in 1946, when they took over their mother's store in Essen. The business was split into two separate groups in 1960, that later became Aldi Nord, headquartered in Essen, and Aldi Süd, headquartered in neighbouring Mülheim.[9] [10]

In 1962, they introduced the name Aldi (a syllabic abbreviation for Albrecht Diskont),[11] which is pronounced pronounced as /de/. 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 of Aldi Nord is Aldi Einkauf GmbH & Co., while the formal business name of Aldi Süd is ALDI SÜD Dienstleistungs-SE & Co. Each company is owned and operated independently, but they do have contractual business with one another.[12]

Aldi's German operations consist of Aldi Nord's 35 individual regional companies with about 2,200 stores in western, northern, and eastern Germany, and Aldi Süd's 32 regional companies with 2,000 stores in western and southern Germany.[13] Internationally, Aldi Nord operates in Belgium, Netherlands, France, Luxembourg, Poland, Portugal and Spain, while Aldi Süd operates in Australia, Austria, China, Hungary, Ireland, Italy, Slovenia, Switzerland, United Kingdom and United States. In Austria and Slovenia, Aldi operates stores under the Hofer brand. Aldi Nord also owns the Trader Joe's grocery chain in the United States which operates separately from the group.[14] [15] Aldi Süd owns the Winn-Dixie and Harveys supermarket chains in the southern United States.

Aldi is the chief competitor of the similar German discount chain Lidl in several markets.[16]

History

Karl and Theo Albrecht's mother opened a small store in a suburb of Essen, Germany, in 1913. Their father was employed as a miner and later as a baker's assistant. Karl and Theo were born in 1920 and 1922 respectively.[17] 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 and later served in the German Army during World War II. In 1945, 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.[18]

The brothers' idea 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. By 1960, there were 300 stores in Germany.

Split

The brothers split the company in 1960, over a dispute about whether they should sell cigarettes.[19] Karl believed they would attract shoplifters while his brother, Theo, did not. This led to Theo running Aldi Nord, and Karl running Aldi Süd. At the time, they jointly owned 300 shops. In 1962, they introduced the name Aldi—short for Albrecht-Diskont, which translates into English as "Albrecht Discount".[20] Aldi Nord and Aldi Süd have been financially and legally separate since 1966.[21]

The individual groups were originally owned and managed jointly by the brothers.[22] After the death of Theo's son Berthold, Aldi Nord continues to be controlled by the Albrecht family through its Markus, Lukas and Jakobus foundations, which hold a combined 80.5 per cent of the company's issued capital.[23]

International expansion

Aldi started to expand internationally in 1967, when Aldi Süd acquired the grocery chain Hofer in Austria;[24] Aldi Nord opened its first stores abroad in the Netherlands in 1973,[25] and other countries followed. In 1976, Aldi Süd opened its first store in the United States in Iowa, and, in 1979, Aldi Nord acquired Trader Joe's. 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 companies was placed in the hands of private family foundations, the Siepmann Foundation (Aldi Süd) and the Markus, Jakobus and Lukas Foundation (Aldi Nord, Trader Joe's).

Acquisition of Winn-Dixie and Harveys

On August 16, 2023, ALDI Süd entered into a definitive agreement to acquire Winn-Dixie and Harveys Supermarket, including approximately 400 stores across Alabama, Florida, Georgia, Louisiana, and Mississippi.[26] On March 7, 2024, Aldi Süd closed the Southeastern Grocers acquisition and announced it would open 800 new US stores by the end of 2028, with some being Winn-Dixie and Harveys stores converted to the Aldi format.[27]

Business organization

Germany

The Aldi Nord group currently consists of 35 independent regional branches with approximately 2,500 stores. Aldi Süd is made up of 24 companies with 2,000 stores. The border between their territories is commonly known as ″Aldi-Äquator″ (literally: Aldi equator)[28] [29] 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

The Aldi group operates over 12,000 stores worldwide. Aldi Nord is responsible for its stores in Northern Germany, Belgium, France, Luxembourg, the Netherlands, Poland, Portugal, and Spain. Aldi Nord also owns the Trader Joe's grocery chain in the United States which operates separately from the group.[14] Aldi Süd's responsibilities are for Southern Germany, Australia, China, Ireland, United Kingdom, United States and through Austrian subsidiary Hofer AG in Austria, Hungary, Italy, Slovenia and Switzerland.[30] In Austria and Slovenia Aldi Süd operates their stores under the Hofer brand. Aldi Süd's first Switzerland store opened in 2005, and 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.[31]

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.[32] Aldi launched in Great Britain, on 5 April 1990, when it opened its first store there in Stechford, Birmingham, using the wholly owned English registered company of Aldi Stores Limited. In October 2013, Aldi opened the 300th store in Great Britain.[33] By 2017, Aldi had over 600 stores there and was opening them at a rate of more than one a week.[34] In January 2022, Aldi launched its Shop&Go concept in Greenwich, London.[35] In September 2022 it was confirmed that Aldi had overtaken Morrisons to become Britain's 4th largest supermarket with a 9.3% market share.[36] In September 2023, Aldi opened its 1000th location in the UK and shared its plan to open another 500 as a long-term goal.[37]

Aldi entered the Irish market in 1999. In March 2022, its 150th store in Ireland opened in Cahersiveen (County Kerry).[38]

Aldi opened its first Australian store in Sydney in 2001, and has grown rapidly since, maintaining a 12.6% market share as of early 2016.[39] [40] It has still yet to open any stores in the state of Tasmania or in Northern Australia in major cities such as Hobart or Darwin.[41] Financial website Canstar rated Australia's supermarkets based on the feedback of 2,897 consumers who had visited one in the past month with Aldi coming out on top.[42] By August 2019, there were 540 Aldi stores in Australia; Aldi had approximately 11 percent share of the Australian grocery market in the previous year.[43] [44]

Aldi Süd expanded to the United States under the Aldi banner, having expanded throughout the Eastern and Midwestern US[45] Aldi Süd revealed expansion plans in 2015, and expanded into the Southern California market, where Aldi Nord's Trader Joe's is based.[46] Reports in August 2019, stated that the company was in the process of using a $3.4 billion investment in order to expand to 2,500 stores in the country by year end 2022; it was also investing an extra $1.6 billion to renovate 1,300 of its US stores.[47] By February 2020, there were over 1,900 Aldi stores in 36 states. Groceries ordered on-line could be delivered to homes in the areas covered by 95 percent of stores in the US; this service was provided in conjunction with Instacart.[48] In February 2021, Aldi said that it is planning to open 100 new stores in 2021, in the United States (Arizona, California, Florida and the Northeast region).[49]

Aldi Süd opened its first 10 stores in Italy on 1 March 2018.[50] In the first year of operation, 51 outlets were opened. By October 2019, there were 66 stores in northern Italy.[51] At that time, the company was planning to open 80 new stores in the country as well as a distribution centre in Landriano.[52]

In mid-2019, Aldi Süd opened two small, upscale, stores in Shanghai. Two more were opened in late-2019.[53] [54] This is the first of a planned one hundred such locations in the city.[55]

In December 2020, Aldi bought 545 supermarkets and three warehouses of Leader Price and another 2 Casino supermarkets in France for €717 million from Casino Group.[56] The transaction is part of Aldi's plan to catch up with Lidl in France.[57]

On 9 December 2022, Aldi Nord issued a press release stating that Aldi is withdrawing from Denmark[58] after 45 years of operations there. 114 of the chain's total of 188 stores will be taken over by Norwegian competitor Rema 1000.[59] [60] In August 2023, it was announced the Danish Competition and Consumer Authority had approved the Rema 1000 acquisition.[61]

Geographic distribution

CountryNameAldi groupSincedata-sort-type="number" Outlets
GermanyAldi NordNord19612,201[62]
Aldi SüdSüd1984[63] 2,011
AustraliaAldiSüd2001590
AustriaHoferHofer (Süd)1968541
BelgiumAldiNord1973453
ChinaALDI奥乐齐Süd201953
FranceAldiNord19881,321
HungaryAldiHofer (Süd)2008172
IrelandAldiSüd1999161
ItalyAldiHofer (Süd)2018177
LuxembourgAldiNord199017
NetherlandsAldiNord1975488
PolandAldiNord2008251
PortugalAldiNord2006122
SloveniaHoferHofer (Süd)200592
SpainAldiNord2002394
SwitzerlandAldi SuisseHofer (Süd)2005241
United KingdomAldiSüd19901,021
United StatesAldi Süd19762,338
Winn-DixieSüd2024546
Harvey’sSüd202425
Trader Joe'sNord1979587[64]
Total number of Aldi Nord stores5,435
Total number of Aldi Süd stores7,397
Combined total of Aldi stores12,832
Combined total of Aldi + Trader Joe's stores13,419

Business practices

On 9 August 2018, Aldi Nord announced plans to expand its product selection by offering more organic, fresh and easy-to-prepare meals. Aldi also aims to expand to about 2,500 stores in the United States by 2022.[65] [66] On 18 September 2018, Aldi announced its intent to offer grocery delivery in the United States. Aldi began testing grocery delivery in 2017 in select cities such as Atlanta, Georgia, and Chicago, Illinois.[67]

In-store layout

Aldi stores are noted as examples of so-called no-frills stores that often display a variety of items at discount prices, specializing 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.

Aldi mainly sells exclusively produced, custom-branded products (often very similar to and produced by major brands[68]) with brand names including Grandessa, Happy Farms, Millville, Simply Nature, and Fit & Active.

Branded products carried include Haribo in Germany, Knoppers in Belgium, France, and the United States, Marmite and Branston Pickle in Great Britain; and Vegemite and Milo in Australia. Unlike most shops, Aldi does not accept manufacturers' coupons, although some US stores successfully experimented with store coupons.

In addition to its standard assortment, Aldi has weekly special offers,[69] some of them on more expensive products such as electronics, tools, appliances, or computers. Discount items can include clothing, toys, flowers and gifts. Special offers have limits on quantities, and are for one week. Aldi's early computer offers in Germany, such as a Commodore 64 in 1987, resulted in those products selling out in a few hours.[70]

Aldi is the largest wine retailer in Germany.[71] Many Australian stores now sell alcoholic beverages. Some US stores also sell alcoholic beverages, mainly beer and wine, where permitted by local and state laws.In March 2019, Aldi Süd launched smaller-format stores in the UK called Aldi Local, with the first store in Balham, south London. The store has slightly fewer products than a regular Aldi, a preference for fresh products, two sizes of baskets rather than trolleys, and lacks the notable "middle aisle" of weekly offers.[72]

Aldi stores generally do not play music, though some stores in Scotland play Christmas music during December. Some have a PA system for announcements (not commercials), but most lack any audio system. In The Netherlands and Belgium, Aldi also sells A-brands.

In 2021, Aldi UK opened its first cashierless store in Greenwich.[73]

Advertising policy

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 and in Ireland, print and television ads have appeared since May 2005. And since 2016, Aldi began producing a series of Christmas adverts to rival John Lewis' featuring a carrot named Kevin. In 2024, Aldi partnered with British television channel Channel 4 to sponsor its food programming strands.[74]

In Australia, television advertising is common and the current ads are listed on the Australian website.[75]

In Belgium, print, radio and television ads started appearing in late 2017. These ads were based on the positive results of taste-tests where the chain pitted its own products against common name-brand products.

In 2024, Aldi UK also partnered with Channel 4 to sponsor its food programming.[76]

Logos and branding

The two stores Nord and Süd have distinct logos with Nord displaying the entire 'A' for Aldi while Süd unveiled a logo in 1982 which displays only half. In 2006, Aldi Süd modified the logo slightly and then in March 2017, unveiled a new logo which removed the blue box line around the artistic 'A' and revealed a more rounded, 3D look for the logo as well as a new font for the word 'ALDI', further differentiating it from the Aldi Nord logo which had shared the same font for the brand until then.[77] [78]

Sustainability

Between 2012 and 2019, Aldi's UK operations became "carbon neutral", with investments in solar, green energy, energy efficiency and offsets reducing greenhouse gas emissions by 53 per cent per square meter of sales floor.[79] On 4 March 2020, Aldi announced that all its suppliers must utilize recyclable, reusable, or compostable packaging by 2025.[80] In January 2024, the company announced plans to eliminate plastic bags from its 2,300 US stores. Cloth bags would still be available for customer use. It also said it would aim to use natural refrigerants in its US stores by the end of 2035. Other grocery retailers were making similar moves at the time of the announcement.[81] [82]

Reputation

In the United Kingdom, Aldi has won Supermarket of the Year two years in a row (2012/13),[83] and in 2013, Aldi won the Grocer of the Year Award.[84] 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.[85]

In February 2017, Aldi overtook the Co-op to become the United Kingdom's fifth largest supermarket chain.[86] In May 2017, Aldi lost out to Marks & Spencer for the title of Supermarket of the Year 2017 (published by the magazine Which?).[87] According to research firm Kantar Worldpanel, nearly two-thirds of households within the UK now visit an Aldi or Lidl branch at least once every 12 weeks.[88]

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.[89] [90]

In Ireland, Aldi has been accused of a "lack of corporate responsibility" to their farmer suppliers by the Irish Farmers' Association.[91]

Aldi was named 2018 "Retailer of the Year" by Supermarket News.[92]

Australian trucking giant Scott's Refrigerated Logistics was plunged into receivership and liquidation on 3 March 2023 after going into voluntary administration that February. This sparked protests from the Transport Workers' Union who put the blame on Aldi Australia for increasing strains on the company[93] during the last few years of shortages and inflation.

Subsidiaries and joint ventures

Subsidiaries include the mobile network operator "Aldi Talk", the alcoholic drink brand "Aldi Alcohol", and petrol station retailer "Diskont". Multimedia products such as CD-R and DVD-R recordable media, boomboxes, DVD players, digital cameras, camcorders, and turntables are branded as "Tevion" and "Maginon".[94] [95] [96] [97]

Aldi Talk

See main article: Aldi Talk. Aldi has a mobile virtual network operator in Germany called Aldi Talk, also known as "MEDIONmobile" (Service provider is Medion).[98] Aldi also operates a similar network in Australia using Telstra's network, called "ALDImobile".[99] Aldimobile is also in Switzerland by Sunrise LLC. In Austria and Slovenia, Hofer stores serve as distributors for the brand HoT Hofer Telekom (Service provider is Ventocom).

Aldi Alcohol

Aldi sells low cost alcohol from its alcohol stores. Until March 2016, Aldi had an alcohol website serving the east coast of Australia. This has now been closed down, citing it wishes to focus on expanding the supermarket chain across Australia. In November 2019, Aldi announced same-day beer and wine delivery via a partnership with Instacart in the US.[100]

Diskont

In Austria through its subsidiary Hofer, Aldi has a joint venture with the local petrol retailer OMV Downstream GmbH, to create some no frills petrol stations called Diskont.[101] The 85 stations in Austria are on or near the stores, providing self-serve unleaded or diesel fuel by card-operated pumps. These have been in operation since 2009.

Aldi Insurance

Aldi launched Aldi Insurance in Australia in June 2024. The company provides home and contents insurance, car insurance and landlord’s insurance backed by Honey Insurance and RACQ Insurance.[102]

External links

Notes and References

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  4. Web site: Employees & Community. aldi-nord.de. 3 October 2023. 4 October 2023. https://web.archive.org/web/20231004231751/https://www.aldi-nord.de/en/sustainability-report/2022/key-figures-2022/employees-community.html. live.
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  97. https://www.libble.de/tevion-dv-23-hd/p/319947/ Tevion DV-23 HD Anleitung
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