ALDI keeps it cheap so shoppers can, too. How has discount food retailer ALDI Group become one of the world's biggest grocery chains, running more than 9,800 stores worldwide? By offering deeply discounted prices on about 1,400 popular food items (a typical grocery store has 30,000). ALDI (short for "Albrecht Discounts") buys cheap land mostly on city outskirts, builds cheap warehouses, employs a tiny staff, and carries mostly (95%) private-label items, displaying them on pallets rather than shelves. ALDI has some 1,200 stores in 30-plus US states, but Germany (where ALDI has about 4,300 stores) accounts for about two-thirds of sales. ALDI was co-founded by brothers Karl and the late Theo Albrecht.
ALDI is organized into two units: Essen-based Aldi North and Mülheim-based Aldi South. About 4,980 stores belong to Aldi North, while some 4,500 belong to Aldi South. Also, Aldi North owns the Trader Joe's chain (acquired in 1979) of some 375 stores in the US. Trader Joe's, based in California, operates independently.
ALDI operates stores about 15 countries in Europe, as well as in Australia and the US. The German discount supermarket chain entered the US market in 1976 and has grown to number more than 1,200 ALDI stores in 32 states. ALDI opened its first store in New Hampshire in 2012. Other growth markets include Florida and Texas.
ALDI stores rang up an estimated $73.3 billion worldwide in 2011. Roughly 10% -- some $7.3 billion -- was contributed by its US division, whose sales rose more than 13% vs. the prior year.
The global financial crisis sent shoppers flocking to ALDI stores in Europe and the US, and they keep coming back. Still, in Germany, where discount grocery shopping is especially popular, ALDI's market share is being eroded by rivals, including compatriot Lidl & Schwarz, which has emulated its low-cost operating methods while offering brand-name products. In response, ALDI has tinkered with its private-label strategy to begin offering more branded items from consumer goods makers such as Procter & Gamble and Unilever. The company has also begun offering more fresh produce. Since improving product selection, the company also has semiweekly promotions to attract more middle-class shoppers to its stores in Germany. ALDI intends to repeat this move in its US and UK markets as the company continues to expand. In the US, ALDI plans to build 80 new stores in 2012. Houston, a growth market for the chain, will be the site of an additional 30 ALDI stores by mid-2015. ALDI is also growing rapidly in Australia, where it has about 270 outlets. The international limited-assortment grocery chain is also mulling over a move into the New Zealand market. – less