Aldi Einkauf GmbH
OHG
Eckenbergstrasse 16
Essen, 45307
Germany
Telephone: (+49) 201 85 93 0
Fax: (+49) 201 85 93 31 9
Web site: http://www.aldi.com
Private Company
Founded: 1948
NAICS: 445110 Supermarkets and Other Grocery
(except Convenience) Stores
■■■
Aldi Einkauf GmbH Sc Co. OHG (also known as Aldi
Group) is Germany’s leading grocery store chain and a
top competitor in the global retail food industry. One of
the world’s largest privately owned supermarket chains,
Aldi has found success by going against virtually every
standard of supermarketing, garnering attention in
particular for management’s legendary reluctance to
communicate with the media and the no-frills
atmosphere of its stores. By 2016 the chain had nearly
10,000 stores located in 18 different countries. In the
U.S. market, it had more than 1,500 stores in 32 states.
The company also owned the Trader Joe’s chain, which
had 457 stores. Aldi said it planned to expand to nearly
2,000 stores in the United States by 2018.
Aldi operates what are known in the grocery busi-
ness as “limited-assortment” stores or “hard discount-
ers,” terms that refer to deeper discounts than those of-
fered at traditional low-cost retailers. Aldi has taken this
18 INTERNATIONA!. DIRECTORY OF COMPANY HISTORIES, VOLUME 180
Co.
retail concept, which features low overhead and a very
limited selection, to its leanest, meanest extreme. Unlike
the vast majority of supermarket chains, which are
continuously increasing their product offerings and sell-
ing space, Aldi holds selection at its stores to a range of
about 700 to 1,000 items. In contrast, so-called big-box
supermarkets typically carry tens of thousands of
products. More than 90 percent of the stock carried at
Aldi is from its own exclusive brands. In the 2010s, Aldi
responded to customer demand by adding more fresh
produce to its assortment, including organic fruits and
vegetables.
ORIGINS
The first Albrecht Discount store was opened in Essen,
Germany, in 1948, by two brothers whose mother had
also owned a small grocery shop. The Albrecht brothers,
who had spent time in an Allied prisoner-of-war camp,
understood that their customers in war-ravaged
Germany could purchase only the essentials and at the
lowest possible price. The emphasis on reducing costs
began as a necessity and developed into a hardcore
company philosophy. The company refined its strategy
and built up significant reserves in the postwar German
grocery market.
By 1958 the Albrechts had opened 300 stores, with
revenues exceeding 100 million deutsche marks. Aldi
quietly expanded into other areas of Europe, growing
steadily throughout the 1960s. In 1962 the brothers
opened their first store with the Aldi name, derived
from “Albrecht” and “discount.” During the early 1960s,
the company consisted of two primary divisions, with

COMPANY PERSPECTIVES
Simply smarter shopping.
Karl operating stores in southern Germany under the
ALDI-Siid name, and Theo managing the northern
stores under ALDI-Nord. The divisions were closely
linked, however, and for the ensuing decades the broth-
ers cooperated in the operation of what Deutsche Welle
described in 2005 as “a complex web of private trusts
and holding companies.”
The company made a big impact in Belgium, where
analysts estimated the chain had 260 stores and $1 bil-
lion sales by 1992. The private company also garnered
approximately 5 percent of the grocery business in the
Netherlands in the early 1990s. In addition, Aldi set up
about 130 outlets in Austria and another 110 in
Denmark. While Aldi established its presence in a
number of neighboring countries in the latter half of the
20th century', its home country remained its primary
market. By the late 1980s, Aldi operated about 50
separate companies, which in turn oversaw over 2,000
stores in what was then West Germany. Estimated sales
ot DEM 17 billion to DEM 20 billion ($9.3 billion to
$11 billion) ranked the chain as that country’s top food
retailer at that time, with about 13 percent of the
grocery market.
MYSTERIOUS MANAGEMENT
The Aldi Group’s executives have long been regarded as
reticent and secretive, and the chain’s policy of evading
the press is widely known. This aspect of the company’s
reputation is attributed to its founders and owners,
Theo and Karl Albrecht. A June 1992 Supermarket News
story reported that the Albrecht brothers had not been
seen in public “for many years.” Some of their reclusive-
ness has been attributed to the 1971 kidnapping of
Theo Albrecht. He was held by his abductors for over
two weeks and then released after the payment of a $4
million ransom. While few details are known about the
Albrechts, Deutsche Welle reported in 2005 that Karl Al-
brecht retired in the 1980s, while Theo was still work-
ing at that time. While Theo died in 2010 and Karl
died in 2014, the management has continued with
much of the founders’s general philosophy.
In a characteristically brief 1989 phone interview,
Aldi’s U.K. managing director Trevor Coats responded
to queries about the company’s low profile. He told
Suzanne Bidlake of Marketing that “we’re not being
INTERNATIONAL DIRECTORY OF COMPANY HISTORIES, VOLUME 180
Aldi Einkauf GmbH & Co. OHG
mysterious at all. It’s just that we’re one of the largest
retailers in Europe and we don’t want to discuss our
business with the media.” In fact, the company’s policy
of secrecy—which is sometimes broken by “unnamed
sources close to the company”—appears to be a key part
of its competitive strategy. Jim Baska, the president and
CEO of Associated Wholesale Grocers, operators of a
U.S. limited-assortment chain, told Richard Turcsik of
Supermarket News that “it’s when limited-assortment
stores are ignored that they proliferate and become
ubiquitous in the market. If they’re taken seriously by
the competition, limited-assortment stores won’t grow or
be a threat in any given market.” Marcia Berss of Forbes
concurred, noting in her 1993 coverage of the chain,
“Why let competitors in on a good thing?”
KEY FOREIGN MARKETS
The 1970s and 1980s were marked by Aldi’s initial at-
tempts to establish itself in three key international
markets: the United States, the United Kingdom, and
France. Aldi established its U.S. arm in 1976, when
limited-assortment stores were first gaining a foothold.
At that time, other national retailers in the country,
including the Great Atlantic and Pacific Tea Company
(A&P), Kroger Company, Jewel Food Stores, and
Dominick’s Finer Foods, were experimenting with the
format. All of those companies eventually abandoned
the concept.
Aldi’s first U.S. outlets were launched in rural areas
of the Midwest and its first store was in Iowa. A
warehouse was established in Batavia, Illinois, and this
city remained the company’s U.S. headquarters as of
2016. Less than a decade after opening its first store in
the United States, Aldi had nearly 150 stores in Illinois,
Indiana, Iowa, Kansas, Missouri, and Wisconsin. New
distribution hubs were installed in Kansas, Iowa, and
Missouri, and warehouses in Indiana and Ohio were
completed by the end of the decade. By 1989 U.S. sales
estimates ranged from $515 million to $780 million.
The company increased the pace of U.S. expansion
in the late 1980s and early 1990s, expanding from its
base in the Midwest to the East Coast. Analysts
estimated that Aldi’s U.S. operations increased from
about 200 stores in 1990 to nearly 400 in 1993, a year
in which the grocery chain registered sales of ap-
proximately $1.2 billion.
U.K. ISSUES
Aldi made its first foray into the British market in 1989.
At the time, some observers surmised that the chain was
well prepared to exploit that country’s high-margin
grocery industry, especially in light of the general
19
Aldi Einkauf GmbH & Co. OHG
KEY DATES
1948: Theo and Karl Albrecht open their first
grocery store in Essen, Germany.
1962: The Albrecht brothers open their first store
bearing the Aldi name.
1971: Theo Albrecht is kidnapped and held captive
for over two weeks.
1976: The first Aldi store in the United States
opens.
1989: The Albrecht brothers open their first Aldi
store in the United Kingdom.
2006: An Albrecht family trust buys Trader Joe’s, a
specialty grocery chain in the United States.
2010: Theo Albrecht dies.
2013: Horse meat scandal rocks European grocery
stores, including Aldi.
2013: Karl Albrecht dies.
2016: Aldi plans expansion into Southern
California.
economic downturn that hit the United Kingdom in the
late 1980s. Others noted that Aldi was bigger than any
of the country’s indigenous chains, had more buying
power, enjoyed lower overhead costs, had deep pockets,
and was not answerable to shareholders. Nonetheless,
some analysts questioned the chain’s prospects for suc-
cess there. Fiona Gilmore correctly predicted in Suzanne
Bidlake’s 1987 Marketing piece that Aldi would have a
tough time appealing to British shoppers accustomed to
posh supermarkets and national brands. It was rumored
that Aldi had hoped to open 200 outlets from 1989 to
1994, but the company fell short of that mark by
almost 100 stores.
In order to survive in the United Kingdom, Aldi
made a dramatic deviation from its own-label policy.
Marketing reported in 1990 that a “source close to the
secretive company revealed ... that Aldi has ‘come to the
conclusion that the UK market, and the discount
market in particular, is very brand sensitive.’ Thus ‘they
will have to stock predominantly national brands.’” Aldi
also found its adaptation to Britain’s competitive market
conditions hindered by Kwik Save, a fierce soft-discount
competitor. Kwik Save helped head off Aldi’s expansion
in the early 1990s by acquiring 100 stores. This
maneuver made the efforts of the German firm to secure
a healthy base for growth considerably more difficult.
Undaunted, Aldi continued to adapt to market
conditions outside of its home country. In 1991 the
20 INTERNATIONAL DIRECTORY OF COMPANY MTSTOd t e v vni t t x j e ion
chain forged an agreement with Britains Gateway Food-
markets Ltd. to establish outlets on the latter’s sites. The
partners hoped that their cooperation would be mutu-
ally beneficial—Aldi’s exceptionally low prices would at-
tract new customers to Gateway’s stores, which could
then fill in the gaps left by the discounter’s scanty
selection. Both rivals and analysts, however, claimed that
the cooperative venture was just another sign of the two
chains’ inherent weaknesses in the face of market
pressures.
ISSUES IN FRANCE
Expansion in France was difficult as well, hampered by
heavy price competition from entrenched rivals like
Leclerc and Intermarche. David Shriver, an analyst with
County NatWest (London) told Mark Tosh of
Supermarket News that “to create a real differential in
terms of price, Aldi has had to lower gross margins [in
France] even more than it has had to in the U.K.” As a
result, Aldi only had an estimated 37 stores there by
1992.
Setbacks in Great Britain and France fueled skepti-
cism about Aldi’s invulnerability. Some attributed the
chain’s German success to historically restrictive market
conditions that did not necessarily exist in other
countries. Others surmised that economic recovery
would spell the demise of limited assortment chains
forced to “cannibalize” each others market share. For its
part, Aldi turned its attentions to Eastern Europe. In the
former East Germany it built distribution centers and
stores. In late 2005, Aldi announced an expansion into
Poland, with plans to build an Aldi store in every Polish
city with a population of at least 20,000.
Aldi entered the 21st century as Germany’s top
chain of grocery stores, with 40 percent of the market.
The Aldi family of companies had taken its founders to
the top of Germany’s list of wealthiest individuals.
Deutsche Welle reported that, in 2005, Forbes estimated
Karl’s fortune at $18.5 billion and Theo’s at $15.5
billion. A 2004 Business Week article reported an
estimated sales growth of 8 percent per year for Aldi
beginning in 1998. In that article, Jack Ewing reported
Aldi’s plans to open 40 new stores per year in the
United States until 2010, when the total number of
U.S. stores would reach approximately 1,000.
In the United States and elsewhere, Aldi solidified
its reputation as a fearless competitor, building new
stores in areas with multiple competing retail outlets. In
a 2005 Europe Intelligence Wire article, company officials
declared that they actually preferred to enter a market
where their competitors had “warmed up” consumers.
Even the discount retail giant Wal-Mart did not

intimidate Aldi, which had opened new stores in the
vicinity of Wal-Mart Supercenters and even, in some
cases, in the same complex.
Aldi found it could effectively compete with Wal-
Mart by matching their rock-bottom prices and also by
offering shoppers a less crowded, more convenient
experience. In a 2005 article in the Minneapolis Star
Tribune, food-industry analyst Burt Flickinger III
pointed out that “A shopper can shop the entire Aldi in
12 to 20 minutes. ... Shoppers want the fast, deep-
discount shopping experience, as opposed to the long,
slow, tough-to-check-out experience at a Wal-Mart.”
Aldi also asserted its advantages over the warehouse-style
stores such as Costco, where most products are sold in
bulk. Aldi spokesman Jon Drummond, in the same
article, noted that at Aldi, “You don’t have to buy an
80-ounce package or buy 10 of something to save
money.”
TRADER JOE’S
In the United States, the no-frills Aldi chain became a
distant cousin to a rapidly expanding chain of specialty
grocery stores called Trader Joe’s, when that chain was
purchased by a family trust established by Theo
Albrecht. Trader Joe’s outlets shared with the Aldi stores
an emphasis on value, a limited selection, and an
abundance of private-label products. While Aldi focuses
on staple items, however, Trader Joe’s offered gourmet,
organic, and ethnic foods. As of 2006, there were 250
Trader Joe’s stores spread throughout more than 20 U.S.
states. Trader Joe’s distinctive approach, from the exotic
fare to the staff clothed in bright Hawaiian-style shirts
to the selection of inexpensive wines, made the chain
what Jack Ewing of Business Week described as “the hot-
test thing in U.S. retailing.” Aldi’s own distinctive ap-
proach certainly had less flair but was proving successful
nonetheless.
As it expanded internationally, Aldi also began to
diversify beyond its core supermarket business line. In
2005 it founded Aldi Talk, a mobile network operator
in Germany. The company later expanded into Belgium,
the Netherlands, and Australia. The prepaid SIM cards
for mobile phones produced by the company were sold
both online and through Aldi stores.
Aldi continued to expand during the recession of
2008—2009, adding stores in Hungary in 2008.
Afterwards it changed its focus on growing the number
of stores in each market, instead of launching stores in
additional countries. The company also continued to
expand its offerings, forming an Austrian petrol station
chain as part of a co-venture and creating an online
retailer of liquor operating in Australia.
INTERNATIONAL DIRECTORY OF COMPANY HISTORIES, VOLUME 180
Aldi Einkauf GmbH & Co. OHG
The worldwide economic recession that began in
2008 proved a boon for Aldi and similar discount stores
such as its competitor Lidl Dienstleistung GmbH &
Co. KG. A 2008 market study by TNS Worldpanel
showed that in the United Kingdom alone, Aldi saw its
sales grow by 20.7 percent in the first quarter of 2008.
In a June 2008 article in the Independent, Steve
Gotham, a project director at Allegra Strategies, said:
“Clearly the economic circumstances in the UK are
playing into the hands of the discounters. They are ap-
pealing to new customers and those new customers are
coming from more middle-class backgrounds.”
Industry observers expressed concerns that as the
economies in Europe and the United States recovered,
shoppers would step away from the discounters and
return to the higher-end shopping experiences of other
major chains. However, in many places that did not
happen. Aldi continued to take market share from other
stores in its key markets, including the United States,
where in many places it went head-to-head with
Walmart.
In 2011, with little fanfare, Aldi opened its first
store in New York City, in the outer borough neighbor-
hood of Rego Park, Queens. “They’re not only doing
the small format more rapidly, but they’re getting into
the urban areas more rapidly than either Wal-Mart
Express or the city Targets,” Craig Johnson, president of
the consulting firm Customer Growth Partners, told the
New York Times in a March 2011 article by Stephanie
Clifford. “Even though the company’s headquartered in
Germany, they’ve opened up a New York store quicker
than Wal-Mart has.”
Aldi announced plans to increase the rate of expan-
sion in the United States, intending to open 80 more
stores in 2011 and 2012. At the time, the company
received approximately $6.5 billion in revenue from the
U.S. market alone. “With the recession, the concept of
shame has gone out the window,” David Fuselier, an
investor in urban grocery stores, told the New York
Times. “People don’t really worry about going to a
discounter.”
HORSE MEAT SCANDAL
Aldi’s strategy was not without missteps, and one of the
biggest came in 2013 when it was discovered that nearly
100 percent of the beef products it sold from supplier
Comigel were not beef at all—they were other meats,
including horse meat. Other grocery stores in Europe
were also rocked by the scandal, which mainly involved
packaged frozen dinners. While eating horse meat is not
necessarily a health risk for most people, it is distasteful
to many in Europe and the United States and is
21
Aldi Einkauf GmbH & Co. OHG
prohibited by the Muslim and Jewish religions. In addi-
tion, health officials raised concerns that veterinary
drugs that are banned in food animals but used regularly
in horses might be found in the mislabeled meat. The
scandal caused Aldi and other grocery stores selling the
items tainted with horse meat to pull large numbers of
products off store shelves. Many consumers stopped eat-
ing meat from the stores accused of selling the products.
However, the long-term impact was not great because
often those consumers simply replaced the meat in their
carts with other items.
Aldi continued to maintain its large market share in
many countries even after the recession ended. In 2013
one study claimed half of the households in England
shopped at either that store or Lidl. A December 17,
2013, article by Steve Hawkes in the Telegraph reported
that a Kantar market research study had found 50.1
percent of English households had shopped at one of
the discount supermarket chains in the previous 12
weeks. A former executive at Tesco, a major U.K,
grocery chain, told the newspaper that the recession had
“turbo-charged” the discounters, drawing in new shop-
pers who did not leave even after the economy
recovered.
By 2015 Aldi was again considering expanding into
new markets for the first time since it added Hungary in
2008. Plans to add stores in Italy were announced in
May of that year. The company also began to aggres-
sively pursue expansion in the U.S. market, looking to
open 45 stores in Southern California with a planned
investment of S3 billion. In December 2015, the
company said its first California store would open in
2016 in Vista, near San Diego. The company also an-
nounced that in 2016 it would make its first foray into
online sales in the United Kingdom, initially offering
wine by the case for home delivery.
April D. Gasbarre
Updated Judy Galens; Lee Gjertsen
PRINCIPAL DIVISIONS
Aldi Sud; Aldi Nord.
PRINCIPAL COMPETITORS
Carrefour; Costco Wholesale Corporation; Lidl Dien-
stleistung GmbH & Co. KG; Wal-Mart Stores Inc.
22 INTERNATIONAL DIRECTORY OF COMPANY HISTORIE«; veil t im e isn
FURTHER READING
Albright, Mark. “A Cost Cutter Entering Market.” St.
Petersburg Times, August 23, 2006.
“Aldi Reverses Policy to Compete in the UK.” Marketing,
March 1, 1990.
Berss, Marcia. “Bag Your Own.” Forbes, February 1, 1993.
Bidlake, Suzanne. “Counter Revolution.” Marketing, July 6,
1989.
Clifford, Stephanie. “Where Wal-Mart Failed, Aldi Succeeds.”
New York Times, March 29, 2011.
Ewing, Jack. “The Next Wal-Mart?” Business Week, April 26,
2004.
“Germany’s ALDI to Push Prices Further Down in
Supermarkets.” Europe Intelligence Wire, December 11,
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Hawkes, Steve. “Half the Nation Is Shopping at Aldi or Lidl
for Bargains, New Survey Claims.” Telegraph (U.K.),
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10522663/Half-the-nation-is-shopping-at-Aldi-or-Lidl-for
-bargains-new-survey-claims.html.
Kowitt, Beth. “Inside the Secret World of Trader Joe’s." Fortune,
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Mitchell, Alan. “Aldi and Gateway Seal Site Deal in Move That
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Reinan, John. “Twin Cities Warming to Aldi.” Minneapolis Star
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cessed March 17, 2016. http://www.independent.co.uk/
news/business/news/lidl-and-aldi-see-sales-soar-amid-eco
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hrtp://www.bbc.com/news/business-21 379587.