Aldi is a hard discount supermarket chain based in Germany. It is actually two companies but is commonly referred to as one. The brand name "Aldi" is an acronym standing for "Albrecht Discount." Historically, Aldi is said to have been Germany's first real discount supermarket. Its spartan stores with low prices on a limited range of goods can now be found in more than a dozen countries.

History

The company was founded in 1946 by the brothers Karl and Theo Paul Albrecht in Essen. Back then, it comprised only one small food shop. In the year 1961, the then-Aldi chain of supermarket stores split into two companies (each belonging to one of the brothers) over a dispute whether to sell cigarettes and other tobacco products at the checkout. Thus today, Aldi consists of Aldi Nord (Aldi North) (where tobacco sales were deemed to be acceptable) and Aldi SГјd (Aldi South) (where they were not; however Aldi SГјd began selling tobacco products in 2003). The chains initially covered the respective different regions of the then-West Germany. The companies have since expanded internationally, into other European and North American markets. In principle, the two firms share nothing but the name and a similar corporate identity; however, they describe their relationship as a "friendly alliance" and there appear to be agreements between the two insofar that they do not compete directly with each other and (except for Germany) never both operate in the same countries.

Regions where Aldi operates

Aldi Nord operates in

• Northern Germany
• Belgium
• Denmark
• France
• Luxembourg
• The Netherlands
• Portugal (coming soon)
• Spain

Aldi SГјd operates in

• Southern Germany
• Australia
• Austria (where it operates under the name Hofer)
• Ireland
• Slovenia (where it operates under the name Hofer) (coming soon)
• Switzerland (coming soon).
• United Kingdom
• USA

What one finds in an Aldi store

Aldi specializes in food, beverages and drinks, sanitary articles and other inexpensive household items, as well as (occasionally) discount clothes, plus weekly special offers on more expensive products such as electric appliances or computers. Aldi is the largest wine retailer in Germany. Aldi mainly sells exclusively produced, custom-branded products. Although Aldi emphasizes low prices, reports from a German consumer watchdog suggest that this does not negatively impact the quality of Aldi products.

Low price philosophy

Aldi's "strictly no frills" approach is evident for instance in that typically Aldi stores do not decorate aisles — or even fill shelves for that matter: Pallets of the products on offer are commonly simply parked alongside the aisles, and customers picking up products will gradually empty them. When all items on a pallet have been sold, it is replaced. Long queues at the checkout counter are also relatively common, reflecting Aldi's minimal staffing levels, as well as the competitive situation in Aldi's native Germany, where long supermarket checkout lines are part of daily life. However, due to the efficient checkout system, a long queue does not necessarily translate into longer waiting times than in other supermarkets.

These and other cost-cutting strategies save Aldi money and arguably the general price level in Aldi stores — as compared to more "upmarket" supermarkets — appears to show that at least some or most of these savings are passed on to consumer. Aldi has successfully carved its own (actually rather large) niche with this approach: While shoppers may not normally like shopping in a bland or industrial-looking (and possibly congested) store, such utter lack of frills has become part of the accepted norm with Aldi, and consumers appear to be willing to accept it because of the "incredibly low prices" they expect to get in exchange. ("Top quality at incredibly low prices" is an Aldi marketing slogan.)

Aldi also profited from the introduction of the euro in Germany and other countries. Consumers believed that many merchants had used the currency changeover as a cover to increase prices, often substantially; this was later confirmed by independent studies. In contrast to other supermarkets, Aldi prominently listed "before and after" prices on posters in stores for months after the introduction, and generally rounded its euro prices down. As a result, Aldi earned a great deal of customer goodwill.

Advertising policy

Aldi has a policy in Germany of not advertising, apart from a weekly list of special prices called Aldi informiert (Aldi informs) that is distributed in stores, by direct mail, and sometimes printed in local newspapers. It claims this is a cost savings that can be passed on to consumers. However, in the USA, Aldi advertises regularly via weekly newspaper inserts and Aldi television commercials have begun airing on the TBS network, and in the UK print and television ads appeared in mid-2005. Aldi do not have publicly listed telephones in stores to minimize the time checkouts are unutilised.

Checkout system

Aldi's checkout procedure is highly standardized, with checkout operators sitting down in swivel chairs, passing products through a two-sided barcode scanner. Products have very long barcodes covering several sides of the packaging to speed this procedure. Cashiers save additional time by preparing the most likely amount of change while the customer is still searching for money in his/her wallet.

Aldi was, however, a latecomer to barcode scanners, and many stores only added them in 2004; previously, cashiers would manually enter a three-digit code for each item from memory (Aldi Nord) or the price (Aldi SГјd). An advantage of this was that the cashiers could already type in the prices of all the articles on the conveyer belt even if the customers were blocking the process by not putting the articles quickly enough back into their shopping cart.

Once products have been scanned, they are put directly in the shopping cart, which has a special dock on the counter for this purpose. This is why Aldi stores in Germany insist that customers use a cart; the customer is expected to bag groceries at a separate bench. Many, if not most customers, however, ignore this rule, not least because it would force them to join the queue to leave the store even if they hadn't purchased anything. Aldi generally does not offer hand baskets. However, in Australia select stores do have hand baskets available.

Shopping cart theft is minimized through the use of a small deposit for each cart ($2 in Australia, €1 in Germany, 25¢ in the USA, £1 in the UK), refundable on return of the cart.

Reputation

In West Germany, before about 1990, Aldi shops were often ridiculed as being cheap shops selling poor-quality goods. Aldi's customers were alleged to be only poor people who couldn't afford to shop elsewhere. Being held in such low esteem by many did not seem to dent Aldi's profits however. After German reunification, many German middle class families had to cut down their spending and Aldi's popularity and public acceptance grew. Many individual consumers "discovered" that the poor reputation of Aldi's products was apparently undeserved. This shift in public perception was boosted by a series of cookbooks that only used Aldi ingredients, which led to the emergence of a kind of Aldi fandom into the German mainstream.

In countries such as the UK, where the level of service and presentation of mainstream supermarkets is arguably higher than in Aldi's native Germany, Aldi's public reputation does not appear to have improved in a similar way. Despite this, and the strong price competition between such British retailers on precisely the basic goods Aldi sells, the firm apparently remains profitable.

Business practices

Many Aldi practices are common in German supermarkets but largely unique to Aldi in markets such as the U.S. and Britain. These include the shopping-cart deposit, the system of metal gates and turnstiles forcing customers to exit through the checkout, the practice of charging for shopping bags, and the fact that Aldi until recently only accepted cash (since 2004, German stores have begun to accept the Maestro debit card). Like most German retailers, Aldi does not accept credit cards. Aldi does accept Mastercard, Bankcard and Visa in Australia for an additional 1% surcharge.

Aldi stores worldwide are approximately the same size. The company's stores in Germany are similar in size to those of competing supermarkets, and they can often be found in shopping centres or elsewhere where retail units of this size are common. However in other countries, such as Britain, France, and the U.S., Aldi stores are far smaller than those countries' typical supermarkets or hypermarkets (the latter of which are almost unknown in Germany), and tend to be free-standing, purpose-built structures.

Aldi stores often have fairly limited opening hours, such as were restricted by law (until 6:30 p.m. weeknights and 2 p.m. Saturdays) in Germany until these laws were relaxed somewhat in 1996. Some (but by no means all) of its German outlets, particularly those in shopping centres, now stay open until the revised legal closing time of 8 p.m.; on the other hand, some Aldi stores in the U.S. close around 7 p.m. weeknights and all day Sunday, in contrast to the late or 24-hour opening times of many U.S. supermarkets. Aldi's U.S. stores are the only ones to offer customer toilets. British stores only open 0900-1900 Monday to Saturday and 1000-1600 on Sunday.

In Germany Aldi is occasionally jokingly called Feinkost Albrecht (approximate translation: Albrecht Deli).

Recently the similar Lidl chain has grown faster than Aldi; its major difference in business practice is that it stocks a few name brands.

External links

• http://www.aldi.de Aldi Germany

(with links to all Aldi's international websites)

• http://www.aldifoods.com (Aldi USA)
• http://www.aldi.co.uk (Aldi UK)
• http://www.aldi.com.au (Aldi Australia)
• Yahoo! - ALDI Group Company Profileda:ALDI

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