Aldi is a supermarket in Germany and in most parts of the European Union.

Aldi
shops are also in Australia and the United States. Most German towns and villages have at
least one Aldi shop. There are about 4,100 stores in Germany, and 7,600 worldwide. The
name of the shop stands for ALbrecht-DIscount.

HISTORY

The company was started in 1913 as a family grocery business in Essen. In 1946,
brothers Karl Albrecht (born 1920) and Theo Albrecht (1922-2010) took over the business
from their mother. Theo had been held by the US in a prisoner of war camp. They started the
idea of discount shops in Germany. They decided to have a limited range of goods and sell
them at a discount price. In 1960, the company was split into Aldi Nord (Aldi North) under
the control of Theo, and Aldi Süd (Aldi South) under the control of Karl. The brothers
became billionaires. Karl Albrecht took control of Aldi Sud. The 94-year-old grocery king
owns Aldi Süd which has 4,800 stores in nine countries. He is valued at $25 billion but
doesn't like cameras ranked by Forbes as the richest man in Germany. And also ranked 36th
in the world and third in Germany, Theo Albrecht Jr and his family inherited supermarket
chain Aldi Nord and Trader Joe's when their father (pictured) died. Their net worth is valued
at $19.3 billion by Forbes.

THE DIFFERENCE BETWEEN ALDI NORTH AND ALDI SÜD

Brothers Theo and Karl Albrecht took over the store from their father in 1945. A
decade later, there were 100 branches of what was known as Albrecht Diskont supermarket, a
name that would eventually become the far snappier 'Aldi',

All was going swimmingly until 1960 when the brothers fell out reportedly over cigarettes.
One wanted to sell them, the other didn't. The solution? Split the company in two.

Theo ran the stores in northern Germany under the name Aldi Nord. Karl ran Aldi Sud in the
country's south. The Aldi equator divided the company.

The Aldi name is on all stores but there are subtle differences.
North of the line, Aldi stores were often more basic and sport blue and red signs. In the south,
stores can be snazzier and have yellow and blue signs.

And the brothers didn't just divvy up Germany, they divided up the world.

When you shop at an Aldi in Australia, UK or China you're actually shopping at Aldi Sud.
Snap up a special buy in France, Denmark or Poland and you're a customer of Aldi Nord.

The logos of Aldi Sud (left) and Aldi Nord (right).

The retailer has become renowned for operating an “The motto remains “offering high-
quality groceries at every day low prices.”” policy that ignores multi-buy offers such as buy
one get one free. The company also focuses on own-brand products. Aldi wants you to not
only save money on your grocery bill, but also feel really, truly good about what you’re
buying—which is why they’ve taken matters into their own hands to distribute over 90
percent of their products. These private yet affordable labels allow shoppers to stock their
kitchens with healthier, high-quality food items that won’t break the bank—and may even
encourage a new summer diet in the process.

Geographic distribution

Country Name Aldi group Since Outlets

Aldi Nord 1946 2,400

Germany Aldi Süd 1946 1,790

Australia Aldi Süd 2001 311

Austria Hofer Süd 1968 430

Belgium Aldi Nord 1976 380

Denmark Aldi Nord 1977 244

France Aldi Nord 1988 680

Hungary Aldi Süd 2008 75

Ireland Aldi Süd 1998 105

Luxembourg Aldi Nord 1990 12

 Netherlands Aldi Nord 1973 406

Poland Aldi Nord 2008 100

Portugal Aldi Nord 2006 36

Slovenia Hofer Süd 2005 71

Spain Aldi Nord 2002 250

Switzerland Aldi Suisse Süd 2005 130

United Kingdom Aldi Süd 1990 550

Aldi Süd 1976 1,200

United States Trader Joe's Nord 1979 399

total number of Aldi Nord stores 4,805

total number of Aldi Süd stores 4,430

combined total of Aldi stores 9,235

Competitive Advantage
The German-based grocery chain has a reputation for low prices to go with its non-traditional
model of doing business. Competitive pricing is a key methodology for Aldi. Aldi can offer quality items
at low costs as it purchases in incredible volume. The reality that Aldi purchases such extensive amounts
of these items permit extraordinary use for arranging the most ideal costs with its providers. This is
called economies of scale. From the 25-cent returnable deposit on shopping carts, the bring-your-own-
bag policy and focus on private labels, Aldi has been a hit globally. Aldi keeps costs low by limiting the
bulk of its merchandise to its private-label brands, keeping its selection limited, limiting store hours and
keeping the stores small. Aldi’s approach to smaller retail spaces with fewer choices and lower prices is
forcing competitors to respond.
Major competitors for the brand includes other retail outlets like:
1. Lidl
2. Wallmart
3. Netto
4. BI-LO
5. Kwiksave
6. Save-A-Lot
7. Penny-Market
For example:
 ALDI vs Walmart
Walmart, even though is the world’s largest brick-and-mortar retailer, faces a strong
competition from ALDI which provides similar quality of goods at a 30% cheaper rate than
Walmart. Nevertheless, Aldi stock very less products when compared to Walmart.
 Aldi vs Lidl
Following Aldi’s success in Germany, a new competitor with similar USP (Unique Selling
Propotion) started its operation in 1977 under the name Lidl. Both the companies now own
over 10,000 stores worldwide and are well known for their thrifty practices and less price.
The only difference between the two lies in their selection of brands. While Aldi relies on its
private-labeled brands and doesn’t actually entertain other imported and big brands, Lidl sells
its own brands, imported brands and other non-own brands at competitive prices.

Why is ALDI so cheap?

ALDI has maintained its discount supermarket reputation by providing products at up
to 50% discount as compared to competitors. The products at ALDI are even cheaper (around
30%) to those at Walmart.

But how can ALDI afford to be so cheap?

The answer lies in ALDI’s business model. The company focuses on a no-frills
shopping experience and limits its inventory to a lean selection of private-label items. 90% of
the products sold are from its own brand line. Moreover, the company sources most of its
products from the local vendors.

ALDI Business Model

ALDI business model is built upon 3 core values which are still central to the strategic
direction and decision-making principles today. These three values are:

 Consistency
Unlike other supermarkets, ALDI doesn’t entertain seasonal discount coupons and is more
focused on providing products at a cheaper price 24×7. Moreover, the company is consistent
in dealing with their employees, customers, and store. Consistency leads to reliability and has
positioned the brand as an everyday discount supermarket.
 Simplicity
ALDI focuses on a no-frills shopping experience characterised by simplicity, efficiency, and
clarity.
 Responsibility
The company values its employees, customers, and other parties it deals with. It pays its
employees well enough to increase their efficiency, focuses more on customer satisfaction
and less on marketing, and sources most of its products locally.
The Real Reason Why Everything at Aldi Is So Cheap
Aldi, a German-based grocery store, has been quietly taking over the supermarket industry,
which is no small feat with formidable adversaries like Walmart and Costco. Still, Aldi has a
very different tactic when it comes to attracting customers, and it has nothing to do with
selling in bulk or rolling back prices. Aldi offers some of the lowest prices in town even
though they’re not the biggest chain ordering the highest volume. This is why everything at
Aldi is so cheap, including an unusual media tactic and why their shelf space is different than
most grocery stores:
1. They don’t rely on brand name products
Visiting Aldi is a little bit like visiting a foreign country. Instead of Oreos, you get Benton’s
sandwich cookies. Instead of Tostitos, you’ll want to grab a bag of Clancy’s tortilla chips for
$1.29. First-time shoppers are surprised to find that 90% of the merchandise in Aldi is private
label. That’s the biggest reason everything is offered so cheaply. It’s a takes a little getting
used to, but once you realize how much money you can save by skipping national brands, you
come to truly appreciate Casa Mamita salsa in all its off-brand glory.
2. They have a smaller selection
An Aldi supermarket stocks about 900 products compared to a traditional
supermarket’s 50,000. Stocking fewer items is cheaper for so many reasons. First, the store
size is much smaller. A smaller retail space means the rent and utilities are cheaper.
With fewer items to stock, employees can work shorter shifts. And while some people balk at
the idea of only having one choice for mustard, it turns out that the psychology works out in
their favor. People who have fewer choices report a greater level of happiness with what they
chose than those faced with 350 different salad dressings
3. They don’t have bags
Want to bag your groceries at Aldi? You’ll have to pay for it. The store doesn’t offer free
bags, which encourages customers to bring their own. This also helps to keep Aldi
environmentally friendly.
4. You rent your shopping cart
Experienced Aldi shoppers always remember to bring their quarters! At Aldi, you “rent” your
shopping cart for a quarter and only get it back when you return the cart. This incentivizes
people to return their carts rather than leave them in the parking lot, negating the position of
shopping cart wrangler.

5. They have reduced hours

Sure, it’s convenient that you can run to your local grocery store at 3 AM. But you’re paying
a premium for that privilege. Aldi typically opens later and closes earlier than other
grocery stores, which saves them money on operational costs. Those savings are then
passed on to you.