Aldi

For similarly named settlements, see Aldie

ALDI

File:Aldi-Nord Logo.svgFile:Aldi-sued-logo.svg
Company type	Discount Supermarket Chain
Industry	Retail (Grocery)
Founded	1913/1946
Headquarters	Essen, Germany (Aldi Nord) Mülheim an der Ruhr, Germany (Aldi Süd) Batavia, IL USA OPERATIONS
Key people	Theo Albrecht, Aldi Nord Karl Albrecht, Aldi Süd
Products	Mainly own branded, few larger brands
Revenue	US$ 58 billion (2008) according to Delotte
Website	www.aldi.com

, short for "ALbrecht DIscount", is a discount supermarket chain based in Germany. The chain is made up of two separate groups, ALDI Nord (North - operating as ALDI MARKT) and ALDI Süd (South - operating as ALDI SÜD), which operate independently from each other within specific market boundaries. The individual groups were originally owned and managed by brothers Karl Albrecht and Theo Albrecht; both have since retired. However, they are still Germany's richest men, earning an estimated €1.5 billion per year. Aldi's German operations currently consist of Aldi Nord's 35 individual regional companies with about 2,500 stores in Northern and Eastern Germany, and Aldi Süd's 31 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 countries including the United States, Ireland, the United Kingdom, Hungary, Greece, Switzerland, Austria, Slovenia (operating as Hofer in Austria and Slovenia) and Australia. According to a survey conducted in 2002 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. Aldi's main competitor, nationally and internationally, is Lidl.

History

Albrecht storefront in Essen, 1958

First Aldi store in Essen, Germany

File:AldiSouthStore.jpg

A modern Aldi Store in Bruchsal, Germany

Earliest roots of the company trace back to 1913, when the mother of Karl Albrecht 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 in 1922. Theo completed an apprenticeship in his mother’s store, while Karl worked in a delicatessen. Karl Albrecht took over a food shop formerly run by F. W. Judt who already advertised to be the "cheapest food source". Karl Albrecht also served in the German Army during World War II. After the end of World War II, the brothers took over their mother’s business (1946) and soon opened another retail outlet in the vicinity. By 1950, the Albrecht brothers already 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 claim their money back. The Albrecht brothers also rigorously removed merchandise that did not sell from their shelves, and cut costs by not advertising, not selling fresh produce, and keeping the size of their retail outlets as small as possible.

When the two brothers split the company in 1960 over a dispute whether they should sell cigarettes at the till or not, they owned 300 shops with a cash flow of DM 90 million per year. In 1962, they introduced the Aldi brand name. Both groups are financially and legally separate since 1966, though they describe their relationship as a "friendly relation"; they will also occasionally appear as if they were a single enterprise, for example with certain house brands, or when negotiating with contractor companies. Aldi expanded internationally in the 1970s and 1980s, the number of outlets skyrocketing, especially after German reunification and the fall of the Iron Curtain. The brothers retired as CEOs in 1993 and gave most of their wealth to foundations.

National business organization

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 runs from the Rhine via Mülheim an der Ruhr, Wermelskirchen, Marburg, Siegen and Gießen eastwards up to slightly north of Fulda. Former East Germany is completely served by Aldi Nord, save for a single Aldi Süd store in Sonneberg, Thuringia that is associated with a Bavarian regional office. 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). The regional distribution centres are usually located away from urban areas, but always near an autobahn to facilitate transporting the merchandise to the individual stores. Aldi Nord, for example, has distribution centres in Bargteheide, Barleben, Beucha, Beverstedt, Datteln, Essen, Greven, Hann. Münden, Hemmoor, Hesel, Herten, Horst, Hoyerswerda, Jarmen, Lehrte, Lingen, Minden, Nortorf, Radevormwald, Rinteln, Salzgitter, Scharbeutz, Schloß Holte, Schwelm, Werl and Weyhe. The coffee roaster of Aldi Nord is also located in Weyhe.

Internationally

The Aldi group operates about 8,078 individual stores worldwide. A new store opens every week in Britain alone.

Aldi Nord is responsible for the markets in Belgium, the Netherlands, Luxembourg, France, Spain, Portugal and Denmark. Aldi Süd caters to the markets of the United States, Austria, the United Kingdom, Ireland, Australia, Switzerland and Slovenia. Aldi Süd currently is expanding in Switzerland, where the first stores opened in 2005. Hungary, Greece and Poland are on the short list of countries for further expansion, where the first stores opened in 2007.

Whilst Aldi Nord has long renamed its Dutch and Belgian subsidiaries Combi and Lansa to the ALDI Markt/Aldi Marché brand, Aldi Süd tries to keep a regional appearance. Therefore, Aldi Süd explicitly brands its outlets as Aldi Süd in Germany, Aldi Suisse in Switzerland and Hofer in Austria and Slovenia.

Geographic distribution

File:Aldiaequator.png

Distribution of Aldi within Germany (the so-called Aldi-equator)

A map of the countries in Europe where Aldi operates, red: Aldi Süd, dark blue: Aldi Nord

Country	Name	Aldi group	Since	Outlets
Germany	Aldi	Nord	1946	2,400
	Aldi	Süd	1946	1,720
Australia	Aldi	Süd	2001	200
Austria	Hofer	Süd	1968	410
Belgium	Aldi	Nord	ca. 1973	380
Denmark	Aldi	Nord	1977	244
France	Aldi	Nord	1988	680
Greece	Aldi	Süd	2008	15
Hungary	Aldi	Süd	April 2008	50
Ireland	Aldi	Süd	1998	61
Luxembourg	Aldi	Nord	ca. 1990	12
Netherlands	Aldi	Nord	ca. 1975	406
Poland	Aldi	Nord	2008	22
Portugal	Aldi	Nord	June 2006	13
Romania	Aldi	—	2007	—
Slovenia	Hofer	Süd	December 2005	40
Spain	Aldi	Nord	2002	130
Switzerland	Aldi Suisse	Süd	2005	70
United Kingdom	Aldi	Süd	1989	382
USA	Aldi	Süd	1976	1000
total number of Aldi Nord stores				4,287
total number of Aldi Süd stores				3,923
total number of all Aldi stores				8,210

Business practice

Many Aldi practices are common in German supermarkets but largely unique to Aldi in markets such as the U.S. These include the system of metal gates and turnstiles forcing customers to exit through the checkout, the practice of charging for shopping bags, and the fact that Aldi until recently accepted only cash (since 2004, German stores accept domestic Maestro debit cards). Debit cards are also accepted in the USA, the UK, Austria, Belgium, Denmark, France, Spain, the Netherlands, Switzerland, Ireland, Australia and Slovenia.

Aldi generally does not accept credit cards, though Aldi Australia accepts MasterCard and Visa for an additional 1% surcharge. Aldi does now accept credit cards free of charge in both Wales and Scotland in the UK, however these are currently only being accepted as a trial. Credit cards are not accepted in England and Denmark.

Another practice at Aldi stores that is uncommon in the U.S., although ubiquitous in Europe and many parts of Canada, is requiring a coin, or a reusable coin-sized token which may be purchased from Aldi, to use a shopping trolley. When the coin or token is inserted, the trolley is unlocked from the other trolleys. When the cart is returned, the customer is refunded his or her coin, so in effect this costs the customer nothing.

Some Aldi stores have limited opening hours (eg. until 18:30 on week nights and 16:00 Saturdays), such as were restricted by law in Germany until these laws were relaxed in 1996 and 2004. Nearly all of its German outlets, particularly those near shopping centres, now stay open until 20:00 on six days a week. The recent abolition of the national law on closure times and consequent liberalisation to a free-for-all six day week schedule in most states of Germany has had little effect on Aldi so far. On the other hand, Aldi stores in the U.S. generally open between 9 A.M. and 10 A.M. closing between 8 P.M. (20:00) weeknights, 7 P.M. (19:00) Saturdays, and 5:00 P.M. (17:00) on Sundays. Stores in the UK close at 19:00 on weeknights, earlier on Saturday, and, until recently, most remained closed on Sunday (Aldi stores in England and Wales, like most other supermarkets, now open on Sundays between 10:00 and 16:00 while stores in Scotland where Sunday trading laws are more relaxed open for similar hours as any other day). Aldi stores in Australia generally open from 09:00 to 19:00 weekdays and open both Saturday and Sunday until 17:00/18:00.

In-store layout

ALDI Nord interior

Aldi specializes in staple items such as food, beverages, toilet roll, sanitary articles and other inexpensive household items. Many of its products are own-brand labeled, with the number of outside brands being very limited, usually no more than two different brands for one kind of product and often only one. This increases the numbers of sales for each article and also allows Aldi stores to be smaller than supermarkets which cover the same range of products but with more diversity. Also it allowed Aldi to avoid the use of price tags even before the introduction of bar code scanners (see below).

Some brand name products are carried in certain markets however, for example HARIBO sweets in Germany, Marmite and Branston Pickle in the UK or Vegemite and Milo in Australia. In the US, major brand name products such as Oscar Mayer Bacon, are occasionally offered as 'special purchase items'. This is strictly limited to very strong brands, though, and usually the result of the patronage not favoring Aldi's house-brand substitute over the brand product. Unlike most other stores, Aldi does not accept manufacturers' coupons.

In addition to its standard assortment, Aldi also has weekly special offers, some of them on more expensive products such as electronics, appliances or computers, usually from Medion. Although not always available, but regularly put up for sale are clothing, toys, flowers, gifts. Specials are only available in strictly limited quantities and for a limited time frame (one week). In the past some of Aldi's early computer offers were so popular in Germany that all available items sold in only a few hours. These computer products included in 1987, a Commodore 64 home computer pack.

Aldi is the largest wine retailer in Germany. Aldi mainly sells exclusively produced, custom-branded products (often identical to and produced by major brands) with brand names including "Grandessa" and "Be Active". American Aldi stores also feature bargain-priced, gourmet foods imported from Germany. This is also the case in Australia and the UK.

In the USA, Aldi Nord CEO Theo Albrecht started a family trust that owns the Trader Joe's chain of specialty grocery stores, which is separate from both Aldi corporations. It is not Theo but his brother Karl Albrecht's Aldi South that conducts Aldi's operations in the USA.

Low price policy

File:Aldi-Markt Kamen.jpg

Aldi Nord in Kamen, Germany

ALDI Süd in Trier, Germany

ALDI in Conder, Australian Capital Territory

Aldi in Beeston, Leeds, UK

Aldi's "strictly no frills" approach is evident for instance in that Aldi stores do not decorate aisles — or even fill shelves for that matter: pallets of the products on offer are parked alongside the aisles, and customers picking up products will gradually empty them. When all items on a pallet have been sold, it is replaced. Long lines at the checkout counter are also common, reflecting Aldi's minimal staffing levels, as well as the competitive situation in Aldi's native Germany, where long supermarket till queues are generally accepted as part of daily life. However, due to the efficient checkout system, a long queue does not necessarily translate into longer waiting times than in other supermarkets. In Ireland and Great Britain, Aldi operates the one past the belt system. Each time there is a trolley and a customer beyond the conveyor belt, another till is systematically opened, until all tills are open.

These and other cost-cutting strategies save Aldi money and the general price level in Aldi stores shows that most of these savings are passed directly on to consumers. Aldi has carved its own niche with this approach; while some shoppers may not like shopping in a bland or industrial-looking (and possibly congested) store, such lack of frills has become part of the accepted norm with Aldi, somewhat similar to Wal-Mart's style of parking pallets on floors with pre-prepared displays. ("Top quality at incredibly low prices", "smarter shopping" and "Spend a little, live a lot" are Aldi's marketing slogans.)

Aldi also profited from the introduction of the euro in Germany and other countries. Consumers believed that many merchants had used the currency changeover as a cover to increase prices, often substantially; which in some cases has been upheld by independent studies. In contrast to other supermarkets, Aldi prominently listed "before and after" prices on posters in stores for months after the introduction, and generally rounded its euro prices down. As a result, Aldi earned a great deal of customer respect.

The charge imposed by credit card acquirers on payments means that most Aldi stores do not accept credit cards, unlike their main rivals. Aldi stores in Australia and in the US accept credit cards, but sometimes with a fee. Aldi does now accept credit cards free of charge in both Wales and Scotland in the UK, however these are currently only being accepted as a trial. Credit cards are not accepted in England as of yet.

Advertising policy

Aldi has a policy in Germany of not advertising, apart from a weekly newsletter of special prices called Aldi informiert (Aldi informs is a literal translation but "Aldi News" is a closer approximation in English) that is distributed in stores, by direct mail, and often printed in local newspapers. It claims this is a cost saving that can be passed on to consumers. However, in the USA, Aldi advertises regularly via weekly newspaper inserts and television commercials (In some areas). In the UK, print and television ads have appeared since mid-2005. In Germany, all advertising isn't done in-house, but it is generally believed that Aldi has never spent any money for an external advertising agency at all. This is not the case in the U.S., however. There, John-Low Advertising of Chicago, IL currently handles agency-of-record duties. Aldi does not have publicly listed telephones in stores to minimise the time tills are unused.

In Australia, during the period immediately after store openings, Aldi used two page colour advertising particularly in local suburban give-away newspapers. They have also delivered the full colour leaflet used in store to householders' letterboxes in store localities.

With the more recent success of supposedly upmarket rivals such as Marks and Spencer marketing the quality of their produce, the UK advertising by Neil Armstrong, for Aldi now consists of a large amount of reference to products sold at Aldi that have won awards in group tests from the likes of Woman's Own or Good Housekeeping magazines, in an effort to underline the quality of the food.

Checkout system

Aldi in Bethlehem, PA, using an exterior design common in U.S. Market Aldi stores.

Aldi's checkout procedure is highly standardised, with checkout operators sitting down in swivel chairs, passing products through a two-sided barcode scanner. Some products have 4 or 5 separate barcodes. Products have very long barcodes covering several sides of the packaging to speed this procedure. Products can sometimes be scanned twice because of the prevalence of barcodes on products. To counter this Aldi has a 2 second delay, meaning the same barcode can't be scanned twice in under 2 seconds. A worker must scan 1050 items per productive hour, as the cashiers switch the till to standby between each customer effectively 'stopping the clock' then starting it again when the next customer approaches. In Ireland, workers target 1200 items per hour, if they are working on the main till.

Aldi was, however, a latecomer to bar code scanners, and many stores only added them in 2004; previously, cashier clerks would manually enter a three-digit code for each item from memory (Aldi North) or the actual price (Aldi South) this practice still exists to an extent in the UK. With staff needing to memorise around 100 fruit and veg product numbers ranging from 1 to 100.An advantage of this was that the cashiers could already type in the prices of all the articles on the conveyor belt even if the customers were blocking the process by not putting the articles quickly enough back into their shopping cart.

Once products have been scanned, they are put directly in the shopping cart, which has a special dock on the counter for this purpose. This is why Aldi stores in Germany insist that customers use a trolley - the customer is expected to bag groceries away from the cash-desk. In most countries, Aldi does not offer hand baskets. In Denmark, hand baskets are available in all Aldi stores and in Australia they are offered in some stores. In the UK, smaller trolleys were withdrawn even though large half-empty trolleys can create unnecessary congestion.

In many countries, including most of Europe, the US, and Australia, Aldi does not provide free plastic shopping bags. Instead the customer can purchase various types of plastic/reusable bags at the checkout to cart the goods out of the store. Aldi encourages customers to bring their own bags. Many US and Australian customers use empty boxes directly from the pallets in the store for packaging their groceries.

Reputation

ALDI in Hjørring, Denmark

Originally Aldi stores were often ridiculed as being cheap shops selling low-quality goods, and that Aldi's customers were all poor people who couldn't afford to shop elsewhere. It was sometimes joked that "Food stamps are the official currency of Aldi." However, being held in such low esteem by many did not seem to dent Aldi's profits. Gradually many German consumers discovered that the poor reputation of Aldi's products was either undeserved or economically justifiable. This shift in public perception was boosted by actions like a series of cookbooks that only used Aldi ingredients, which led to the emergence of a kind of Aldi fandom into parts of the German mainstream. This can be seen by books like Aldidente with recipes containing only ingredients found at Aldi (which was later sold as a special at Aldi), as well as the German language newsgroup de.alt.fan.aldi.

In the UK, while it is still a small player with a grocery market share of less than 3%, its importance along with that of continental no frills competitor Lidl is growing. Also, Aldi is aggressively recruiting management staff at top UK universities.

In the United States, like most US supermarkets, Aldi stores in many American states accept public assistance debit-style cards as payment. In addition, Aldi, along with its main competitor in the United States, Save-A-Lot, and Price Rite are among the few businesses to have actually benefited from high gas prices due to the inexpensive prices on groceries.

Opening Day at Bribie Island, Queensland

In many areas of Australia, Aldi filled a void in the discount supermarket business that arose when the popular discount grocery chain Franklins ceased trading in 2002, except in New South Wales. For example in Queensland Aldi aims to have 50 stores across the state by the end of 2008 in areas with a population of about 20,000 residents. On 17 December 2008, Aldi opened its 200th Australian store, with those 200 located in Victoria, New South Wales and Queensland.

Criticism

In April 2000 Aldi UK paid damages to a shop manager they had fired for being HIV-positive. Aldi reached an out-of-court settlement with Mark Hedley, former manager of the Aldi supermarket in Seaham, County Durham, shortly before an employment tribunal hearing. Mr Hedley complained of discrimination after he was asked to leave because bosses said other staff felt uncomfortable around him. It is thought the damages paid to Mr Hedley ran to six figures.

In 2004, Aldi sold garden furniture from Indonesian Meranti wood in Germany. Because it was not able to show that it was sourced legally (70% of Indonesian timber is logged illegally), environmental organisations put pressure on Aldi to withdraw the wood from the market. After a few days Aldi bowed to the public pressure and declared in the future it would only sell wood with the FSC certificate, which promotes sustainable forestry.

Aldi Talk

On 7 December 2005, based on their well known brand, Aldi (both North and South) in Germany introduced a low-cost pay-as-you-go mobile phone rate Aldi Talk, piggybacking on the e-plus network. They offered rates of 5c (now 3c) per minute/SMS to other Aldi Talk customers and 15c (now 13c) to landlines and other mobile phones. This offer at first was a two-week limited time offer, but has been available permanently on a "starter set", which has a SIM card and €10 worth of credit since early 2006..

Hofer in Austria offers a pay-as-you-go service called "yesss!" using Austria's Orange (ex One) Network.

Shop ALDI Smart

On March 26th, 2008, In the US, Aldi debuted new TV commercials and a new website called "Shop ALDI Smart". It even became a new corporate slogan replacing "Incredible Value Every Day!" However, the old slogan is still seen in most stores. It also talks about "The Double Back Guarantee." One of the new TV Ads includes Aldi shoppers singing a jingle in a broadway scene.

Aldi in Popular Culture

• "Aldisierung" (Aldisation) was named Word of the Year for 2005 in German-speaking Switzerland, following the company's decision to enter the Swiss market.
• In Germany Aldi is occasionally light-heartedly called Feinkost Albrecht (approximate translation: "Albrecht's Fine Foods" or " Albrecht Delicatessen").
• From its opening in Sydney in 2001, the Aldi Süd logo was slightly changed to remove the Süd part of the name: [1]
• Karl and Theo Albrecht's mother has been reported to say "Je schlechter es den Menschen geht, desto besser geht es uns" (The worse off the people are, the better off we are).
• Homestar Runner character Senor Cardgage is sometimes seen with what looks like an Aldi bag.
• The majority of American Aldi stores, a rapidly growing grocery venue, are designed by Narramore Associates^[2].
• In the UK During September 2008 Aldi have introduced a TV advertising campaign featuring popular TV chef Phil Vickery demonstrating dishes that can be produced from Aldi products.
• In April 2009 Aldi UK launched its 99p items offer to fight back against other supermarkets with 100s of items costing 99p or less. Aldi also claim in-store to save its customers £23 on average on a weekly shop.
• The Aldi store in Springdale, Arkansas has been featured on two episodes of The Learning Channel's 17 Kids and Counting (the Duggar family regularly shops at the store).

Expansion

Aldi Plan to open 25 new Supermarket store in N Texas by 2010

See also

• Trader Joe's -- A US speciality store chain bought by Theo Albrecht in 1978
• Save-A-Lot -- A US limited assortment, extreme value chain operating over 1,200 stores

External links

Company sites

• Aldi International (with links to all of Aldi's international websites)
• Aldi Careers (Aldi's US careers website)

Non-Aldi sites

• Yahoo! - ALDI Group Company Profile
• Unofficial ALDI - Medion Hardware Support Forum
• International ALDI archives - History of ALDI special buys
• Complete Aldi Price List Scan (May vary slightly over time and by location)
• Aldi Product Review Customer discussions about Aldi products. Focuses mainly on stores and products in the USA.
• Australian & New Zealand discussion forums for Aldi products.
• BENELUX discussion forums for Aldi products.