23 June 1913|
10 July 1946 (split in two parts in 1960, renamed to Aldi Nord and Aldi Süd in 1962)
Essen, Germany (Aldi Nord)|
Mülheim an der Ruhr, Germany (Aldi Süd)
Number of locations
|Matthew Barnes (CEO, UK Operations)|
|Products||Food; Beverage; Sanitary Articles; Household Goods.|
|Revenue||€53 billion (2010)|
Aldi (stylized as ALDI) is a leading global discount supermarket chain with over 10,000 stores in 18 countries, and an estimated turnover of more than €50 billion. 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.
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. The two operate independently, each within specific areas.
In 1962, they introduced the name Aldi (a syllabic abbreviation for Albrecht Diskont), 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.
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. One of Aldi's direct competitors internationally is Lidl.
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, 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, Aldi Nord opened its first stores abroad in the Netherlands in 1973, 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 companies was placed in the hands of private family foundations, the Siepmann Foundation (Aldi Süd) and the Markus Foundation (Aldi Nord, Trader Joe's).
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) 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).
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 markets 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.
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.
Aldi launched in the United Kingdom, on 5 April 1990, in Stechford, Birmingham. Aldi sales in the UK grew consistently. In October 2013, Aldi opened the 300th store in the United Kingdom. By 2016 Aldi had over 550 stores there.
It was still a small player in the United Kingdom, with a grocery share of less than 3.6%, but its importance, along with that of continental no-frills competitor Lidl was growing, with half of shoppers in the United Kingdom visiting Lidl or Aldi over Christmas that year. Aldi opened stores in affluent locations, including Knutsford and Bury St Edmunds.
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 and has grown rapidly since, maintaining a 12.6% market share as of early 2016.
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. Aldi Süd announced in early 2015 that it hoped to expand into the already highly competitive Southern California market, where Aldi Nord's Trader Joe's is based.
|United Kingdom*||Aldi UK||Süd||1990||620|
|total number of Aldi Nord stores||4,843|
|total number of Trader Joe's stores||418|
|total number of Aldi Süd stores||5,105|
|combined total of Aldi stores||10,366|
Asterisks (*) indicate the country is a member of the European Union
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. All 4 major credit cards are accepted in the United States as of 1 March 2016. Electronic Benefit Transfer cards are also accepted in the United States.
Outside of the United Kingdom, 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 and MasterCard with no surcharge. In the United States, as of February, 2016, Aldi accepts all four major credit cards (MasterCard, Visa, American Express and Discover Card), and from the beginning 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, and throughout Germany from September 2015.
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.
Aldi is the largest wine retailer in Germany. 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) 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.
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.
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 website.
Aldi US brands
- Fit & Active
- Little Journey
- Specially Selected
- Nature's Nectar
- Chef's Cupboard
- Friendly Farms
- Little Salad Bar
- Cattlemen's Ranch
- Baker's Corner
- Season's Choice
- Tuscan Garden
- Bake House Creations
- Appleton Farms
- Never Any!
- L'oven Fresh
- Sundae Shoppe
- Sea Queen
In the United Kingdom, Aldi has won Supermarket of the Year two years in a row (2012/13), and in 2013, Aldi won the Grocer of the Year Award. 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.
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.
In Ireland, Aldi has been accused of a "lack of corporate responsibility" to their farmer suppliers by the Irish Farmers' Association.
Subsidiaries and joint ventures
Aldi sells low cost liquor from its liquor stores. Up until March 2016, Aldi had a liquor 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 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. 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.
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. Within days Aldi announced that all of the timber used in its products would bear the FSC certificate, which promotes sustainable forestry.
In 2008, Aldi UK demolished a historic coaching inn in Burpham, having previously agreed not to until planning consent had been received. Aldi were later found to breach the planning conditions that had been imposed on them
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. In 2011 the lawsuit was settled under a confidential agreement and the complaint was dismissed with prejudice.
In January 2013, Aldi Germany was caught up in the horse meat contamination scandal along with Tesco and others. 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.
In January 2014, following a mislabelling of turkey meat as halal, Aldi apologised and said, "Aldi does not label any products as halal-certified". In May 2015, Aldi apologised again after it sold pork products labelled as halal.
Aldi UK ParkingEye Controversy
Aldi UK car parks are managed by ParkingEye who use an Automatic Number Plate Recognition (ANPR) system. Customers are charged £70 if they return to the car park within four hours or if they park for longer than 90 minutes. Customers can lodge an appeal with ParkingEye in the first instance and then with POPLA. Since the 2012 Supreme Court ruling in the ParkingEye Limited v Beavis appeal, ParkingEye have been making extensive use of the courts to enforce these parking charges. Failure to pay is classed as breach of a debt contract and is registered in credit rating assessments. Technical problems with the Automatic Number Plate Recognition (ANPR) system have led to charges being issued where shopping trips on separate days are mistakenly logged as being a long term stay at the car park for the entire intervening period. Even in such cases, Aldi maintains the position that it is down to the customer to negotiate the appeals process.
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