Aldi

Aldi, also stylized as ALDI, is a discount supermarket chain of German origin. The first store was opened in Essen by brothers Karl and Theo Albrecht in 1946, starting from an old family business, and since 1962 it has operated under the current brand (acronym for Albrecht-Diskont). It currently operates more than 10,000 stores in 18 countries, making it the leading group in the retail sector in Germany and one of the most important globally. The company has been divided since 1966 into two subsidiaries, Aldi Nord and Aldi Süd, which share the German and international markets.

History

First Aldi store in Essen.

The origins of the current company date back to 1913, when Anna Siepmann opened a small grocery store in Essen, Germany. Years later her sons Karl (1920-2014) and Theo Albrecht (1922-2010) worked with she. At the end of the Second World War, they took over the reins of the business, converted into "Albrecht Lebensmittel".

After the war, the Albrecht brothers expanded throughout the Ruhr area with a model that laid the foundation for today's discount stores. While the grocery stores of the time —mostly cooperatives— set normal prices and then applied discounts through coupons or special promotions, Albrecht stores made direct reductions in the price of all items, with fewer brands and more product rotation. In addition, they cut advertising expenses, the sale of fresh products and maintenance costs by renting small venues. This low-price model was successful: in 1950 they had 13 stores and a decade later they had exceeded the 300 stores throughout West Germany.

In 1962 the “Aldi” brand (acronym for Albrecht-Diskont) was established and the company was divided into two subsidiaries that divided up the market: Theo kept “Aldi Nord”, with headquarters in Essen and operating in northern Germany, while Karl kept "Aldi Süd", headquartered in Mülheim an der Ruhr and operating in the south of the country. The reasons for the separation are unknown, although the most widespread version is that the Albrecht brothers did not agree on the sale of cigarettes. Despite this division, legally established in 1966, Aldi Nord and Aldi Süd function de facto as the same company and barely there are differences, except in the offers that apply.

Legal separation has also occurred in international expansion. In 1967 Aldi Süd acquired a franchise store in Austria, while Aldi Nord waited until 1973 to open its first foreign location in the Netherlands. In Spain, the Aldi franchise legally belongs to Aldi Nord.

In November 1971 the founder of ALDI in Essen, Theo Albrecht, was kidnapped. After 17 days in captivity, he paid a ransom of 7 million German marks and was released. To this day, half of that money has not been found.

From 1973 the Aldi group came under the control of a private foundation, Siepmann-Stiftung, created by Karl Albrecht to safeguard family interests. Thanks to German reunification, Aldi became the leading retail company in Germany with more than 4,000 stores, mostly Aldi Nord. Similarly, brothers Karl and Theo retired in 1993 as the richest in the country.

Commercial policy

ALDI in Tomaszów Mazowiecki, Poland

Aldi is a discount supermarket that sells food, drugstore, perfumery and accessories. Most of the items are private label and many times you can only buy those references, at a lower price than in a traditional supermarket and with greater product rotation. There are also limited-duration offers, generally three days, in other segments such as household appliances, tools, clothing and leisure. One of its principles is to have a limited assortment of 900 basic quality products at as low a price as possible. The company was the first in Germany to introduce direct price reductions on all items.

As in other hard discount establishments such as Lidl or Día, spending on decoration and maintenance is reduced. Perishable items are usually sold packaged and without personal lines for butchers or fishmongers, as in a traditional hypermarket. Similarly, employees perform various functions to lower personnel costs.

Aldi's advertising policy varies by country and the reputation of private labels. In Germany, neither of the two subsidiaries carry out advertising campaigns, beyond announcing offers in the press or through their own catalogues, and they do not have a public relations department either. However, in other countries such as Spain, the United Kingdom and the United States, they do Aldi often advertises on television. In Australia, it even does comparative advertising with the slogan Like brands, only cheaper (in Spanish, "Similar to branded products, only cheaper").

Establishments

Map with the administrative division of Aldi in Germany.

Aldi Nord Aldi Süd

Aldi Nord Aldi Süd

Although all stores in Germany carry the Aldi brand, the company is administratively divided into two subsidiaries that share the market. "Aldi Nord" manages 35 regional divisions with more than 2,500 stores in the north, while "Aldi Süd" runs 31 divisions with 1,700 stores in the south. The border that delimits both areas is known as Aldi-Äquator (in Spanish, "Ecuador Aldi"). Each subsidiary has its own regional directors who report to the headquarters of Essen (Aldi Nord) and Mülheim (Aldi Sud), cities between which there are barely 11 kilometers of distance by road.

All of the territory of the former German Democratic Republic belongs to Aldi Nord, except for one store in Sonneberg (Thuringia) which is managed by the Bavarian division of Aldi Süd.

Similarly, international expansion follows the same pattern. Aldi Nord has the most markets in Western Europe and Poland, while Aldi Sud has the German-speaking countries (Austria and Switzerland), Eastern Europe, the United Kingdom and Australia. In total there are an estimated 8,000 stores. of the Aldi group outside of Germany.

In the United States, the two subsidiaries share the market with different brands. Aldi Süd has been operating there since 1976 and has more than 1,000 stores bearing its name, mostly spread across the East Coast. Instead, Aldi Nord entered in 1979 through the purchase of Trader Joe's, established nationwide, and has maintained the original brand.

In Spain, Aldi began its presence in 2002. Its headquarters for Spain are in Masquefa (Barcelona). In 2016, Aldi has more than 260 stores in Spain and 4 logistics platforms in Masquefa (Barcelona), Pinto (Madrid), San Isidro (Alicante) and Dos Hermanas (Seville).

Controversy

In 2013, Aldi supermarkets in the United Kingdom were involved in the horsemeat fraud that affected numerous multinationals in Europe. Specifically, the group acknowledged on February 8 that some packages of frozen lasagne and spaghetti bolognese supplied by the French processor Comigel contained between 30% and 100% horsemeat instead of the advertised veal, so they canceled their business relationship.

On the other hand, in Spain some agricultural organizations such as ASAJA and Unió de Pagesos have protested to Aldi and Lidl for the price they pay producers for the fruit at source, which they consider insufficient.