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Living Case- Aldi

CASE STUDY 8 •
Aldi in Australia
C1
Case study
Aldi in Australia
By Ingrid Bonn, Graduate School of Management, Griffith University
Background
In 1948, the brothers Theo and Karl Albrecht opened
the grocery store ‘Albrecht Discounts’ (Aldi) in Essen
(Ruhr Valley), Germany. The store had a simple
layout and offered a restricted number of products at
a low price. The company grew rapidly, owning 13
stores in 1950 and about 300 stores in 1961 across
Germany.
In 1961, Theo and Karl divided the company into
Aldi North (run by Theo) and Aldi South (run by
Karl). The reasons for this division, according to
Dieter Brandes, a former managing director of Aldi in
Schleswig-Holstein, Germany, were different views
about how to develop the business. However, the
brothers regularly exchanged information about a
range of issues such as performance and cost figures,
current and potential suppliers and they also conducted
joint negotiations with suppliers.
1
In 2003,
Theo and Karl stepped down as CEOs. Theo’s son,
Theo Albrecht Jr, now runs Aldi North, and Juergen
Kroll and Norbert Podschlapp run Aldi South.
By the end of 2003, Aldi had become one of the
world’s biggest global food retailers with over 7000
stores worldwide and estimated annual turnover of
36.2 billion euro.
2
Aldi’s main market is Germany,
which accounts for about two-thirds of sales and where
Aldi has a 40 per cent share of the grocery market.
3
Today, Aldi still operates in two divisions. Aldi
North, based in Essen, manages operations in northern
Germany, Belgium, Denmark, France, Luxembourg,
Netherlands and Spain. Aldi South, based in Muelheim,
manages operations in southern Germany, Austria,
Great Britain, Ireland, Switzerland, USA and Australia.
4
In Australia, the first Aldi store opened in Sydney in
January 2001. The company came with $750 million in
paid-up capital and plans to invest profits in further
growth.
5
This all-cash approach to expansion keeps...