The A-Z of the Aldi boom

The Australian - The Deal - - Front Page -

Brand­ing Eli Green­blat A is for the Al­brecht broth­ers, Karl and Theo, who founded the Ger­man global re­tail chain in 1946 when they took over their mother’s small shop in Essen. Aldi has 10,000 stores in 18 coun­tries, ar­riv­ing in Aus­tralia in 2001. B is for Berthold Al­brecht, one of Ger­many’s wealth­i­est men and the son of Aldi co-founder Theo. The Al­brecht fam­ily has al­ways been ul­tra-se­cre­tive and when Berthold died in 2012 at the age of 58 his death was kept se­cret for a month. C is for ci­garettes. It was an ar­gu­ment over whether Aldi should sell ci­garettes that led to the split of Aldi by the two found­ing broth­ers, each tak­ing dif­fer­ent parts of Ger­many, and the world. The com­pany was split into Aldi Nord and Aldi Süd. d is for dis­counts. Aldi prices can be as much as 50 per cent off the price at main­stream su­per­mar­kets, espe­cially when com­par­ing its pri­vate la­bel range. E is for Essen. Aldi’s birth­place is a city in North Rhine-West­phalia, Ger­many. F is for fru­gal­ity. Aldi stores are no­to­ri­ously fru­gal when it comes to lay­out and the cost of run­ning them. It’s a fru­gal­ity that stems from the broth­ers’ wartime ex­pe­ri­ences. g is for Ger­man fru­gal­ity. H is for home com­put­ers. Aldi sold com­put­ers in the 1980s, such as the Com­modore 64, which proved in­cred­i­bly pop­u­lar, sell­ing out in hours. I is for in­fants. Aldi’s rep­u­ta­tion for cheap and high-qual­ity in­fant prod­ucts, from nap­pies to for­mula to cloth­ing, is what first hooks many shop­pers. J is for Trader Joe’s, the spe­cialty gro­cery store based in Cal­i­for­nia with al­most 500 stores that is owned by the Theo Al­brecht branch of the Aldi fam­ily. K is for kid­nap. In 1971 Theo Al­brecht was kid­napped by a lawyer with gam­bling debts. The ran­som was set at seven mil­lion deutschmarks. Theo, who was held for 17 days, tried upon his re­lease to claim the ran­som pay­ment as a taxd­e­ductible busi­ness ex­pense. L Aldiis for is liquor.the big­gest wine re­tailer in Ger­many. M is for mid­dle aisle, where all the magic hap­pens, with one-off spe­cials and gen­eral mer­chan­dise, from camp­ing gear, tools and toys to 3D print­ers and trees, dish­wash­ers and couches. N is for North Sea. Among the many sto­ries and myths about the fam­ily is that Karl and Theo owned a re­mote is­land in the North Sea where they played golf, col­lected an­tique type­writ­ers and grew or­chids. O is for out­ma­noeu­vre. Aldi is al­ways seek­ing to one-up the big play­ers and the in­de­pen­dent chains through its low prices and ar­ray of gen­eral mer­chan­dise on sale. P is for Pet­care. Aldi is push­ing out in all re­tail di­rec­tions in­clud­ing pet care prod­ucts.

Q is for quirky in­ven­tory. Think fold­able wheel­chairs, video night-vi­sion de­vices and a model hu­man skele­ton. R is for re­tail. Aldi is es­ti­mated to have a 10 per cent slice of the re­tail gro­cery sec­tor across the east coast, and with its ex­pan­sion this year into South Aus­tralia and Western Aus­tralia that pen­e­tra­tion into Aus­tralia’s $90 bil­lion su­per­mar­ket sec­tor is tipped to grow. S is for South Aus­tralia, whose su­per­mar­ket sec­tor has tra­di­tion­ally had a strong in­de­pen­dent gro­cery in­dus­try, which now faces a big chal­lenge from Aldi. T is for tax. In 2015 Wes­farm­ers chief ex­ec­u­tive Richard Goy­der sug­gested Aldi might not be pay­ing its fair share of tax in Aus­tralia, hence com­pet­ing un­fairly with Wes­farm­ers’ own su­per­mar­ket chain Coles. Aldi re­leased its most re­cent earn­ings re­sults show­ing an av­er­age in­come tax rate paid of more than 30 per cent. U is for UK, one of Aldi’s most suc­cess­ful mar­kets where it has just about 600 stores and is the na­tion’s sixth-largest su­per­mar­ket chain by mar­ket share. V is for vis­ual. Aldi stores look bar­gain base­ment com­pared to the hun­dreds of mil­lions of dol­lars spent by Coles and Wool­worths on up­grad­ing and re­fur­bish­ing their stores. It’s part of the ap­peal: if the store looks cheap the prices must also be cheap. W is for Win­ter ski gear. Aldi is now the big­gest re­tailer of ski gear in Aus­tralia and its win­ter sale is a huge draw­card for shop­pers, some of whom wouldn’t nor­mally be seen dead in an Aldi. They flock to the sales, of­ten try­ing on clothes in the mid­dle of the store and lung­ing after gloves, gog­gles and jack­ets.

X is for Xmas – a big time for the dis­counter which of­fers the full sweep of Christ­mas food, presents, wrap­ping and trim to gain sales in this cru­cial re­tail time teo of the year. . Y is for Yoda. De­spite its heavy fo­cus on pri­vate la­bel – around 90 per cent of its prod­ucts are home brand – Aldi also doesn’t shy away from sell­ing top brands, such as

Star Wars prod­ucts for the re­lease of The Force Awak­ens. Z is for zom­bies. Crit­ics say Aldi shop­pers are like cult mem­bers who slav­ishly fol­low, pump up and pro­mote Aldi to any­one who will lis­ten.


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