Aldi: A German Retailing Icon



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Aldi is the common brand of two leading global discount super-market chains with over 10,000 stores in 18 countries. Founded by Karl and Theo Albrecht in 1946, the two brothers built an empire focusing on the indispensable and avoiding the unnecessary. Aldi dominates in Germany, with surveys showing that 87% of Germans shop at Aldi. Aldi is taking market share in the UK, Netherlands, France, etc. Aldi opened its first store in the United States in 1976, and now has 1,600 stores total with aggressive expansion plans (~100 stores per year) throughout the US. I’ve always been intrigued with Aldi because of its small discount super market model. They also sell their own private label brands (similar to what Kirkland is to Costco) that have been gaining traction with US consumers. At the same time Aldi's prices consistently undercut Wal-Mart's prices. It's a fascinating business.

Here is an informative case study from 2005 on the history of the company (H/T to @FatTailCapital for finding it). Aldi Case Study (IESE)

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A great article on how discount grocers like Aldi (above) continue to take share (H/T @HillfieldCap)

A decade ago, discount grocers had a limited impact in most markets. These players, which primarily offered cheaper prices for a narrower range of products, typically took 10% to 20% of market share around the edges. Today, discounters are evolving from stripped-down, no-frills stores to become a genuine alternative for many consumers—and a major factor in the grocery industry. As a result, they may soon claim up to half of the total share in many markets.

How Discounters Are Remaking the Grocery Industry