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Aldi, the giant discount stores: concept and strategy of international expansion

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  1. Company Presentation
  2. Aldi or the concept of "hard discount"
  3. Exporting the concept
    1. Australia
    2. Switzerland
    3. France.
    4. USA
    5. Trader Joe's: Aldi's way of the diversification
  4. Conclusion

ALDI was founded in 1948 by the Albrecht brothers, Karl and Theo. The Aldi Group started a discount grocery chain, with over 8000 stores worldwide. The company has operations in Germany, Europe, America, and Australia. The headquarters are based in Essen, Germany.

With over 8,000 stores worldwide, the main backbone of the commercial operations of Aldi is Germany, where the company has a market share of 40%, which accounts for about two-thirds of its sales. The second largest market is the United States with 850 stores in over 27 states

The strategy of the company is to maintain prices at the lowest possible level by reducing the costs as much as possible: it locates and builds cheap warehouses, uses the minimum number of employees, its sales area offers the basic necessities (boxes cans, dairy, bakery, fresh produce ) products are sold through distributors, and the stock is reduced to an absolute minimum and replaced by linear pallets.

80% of Aldi's products are food products. The remaining 20% includes the "non-food" products such as: household products, hardware, and special offers around a particular theme. Aldi also sells services. IT is now offering services such as prepaid mobile phones, travel, ordering flowers online etc. However, the extent of services is more or less, depending on the country where Aldi is operating. In France, the supply of services in Aldi will be very limited while in the United States and Germany is at its maximum.

Today, the two brothers together have the third largest fortune in the world but are virtually unknown to the general public, even in their country.

? One group, two brands
Aldi operates under two separate brands: ALDI Nord (North Germany, Benelux, France and Denmark) and ALDI Süd (South Germany, Austria, Ireland, United States, Australia and United Kingdom). On the map below, we can easily see that Aldi has chosen its strategy of internationalization carefully; that is to say that the group has decided to establish itself in Western countries, especially ones that have a cultural affinity to it. Therefore, Aldi is not present in countries such as Japan.

Finally, emerging countries such as BRIC (Brazil, Russia, India and China) are far from seeing a brand like this type open operations, because the reason for the survival of hard discounters is their ability to be cheaper than competitors. However, in the countries mentioned, consumers are still discovering hypermarkets and their many services. It is only when the super and hypermarkets have become the reference in these countries that the hard discounters will address such countries.

As a "Privately Held company" that is not a quotée Company, Aldi is not required to disclose its results. However, according to Kloeters, the estimated annual sales are between $ 2.1 billion and $ 3.3 billion.

? Background
1913: creation of a grocery store owned by the Albrecht brothers' mother.

1950: Development of 13 grocery stores.

1960: Strategic Separation of Aldi Süd and Aldi Nord stores with 300: CA € 4M

Tags: 'Aldi', 'Trader Joe', 'Hard Discount stores'

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