Albrecht Discount, otherwise known as Aldi, is an international discount chain supermarket. Its first few branches were located in Germany alone. However, due to the company’s rapid growth and development, the company executives have agreed to go international and open new stores in other countries. The objective of this paper is to outline different management aspects of Aldi such as their history, marketing strategies, business structure, product ranges, customer service and some recommendations for the management.
A Brief History of Albrecht Discount
Aldi is a widely known discount chain supermarket in Germany. The first Aldi store opened way back before the First World War, somewhere around the year 1913. Karl and Theo Albrecht’s mother opened a miniature supermarket within the suburban area of Essen. That miniature supermarket then became their family’s primary source of income. Seven years passed and Karl Albrecht was born. Another two years passed and his younger brother, Theo Albrecht was born.
Theo worked as one of the store merchandisers while his brother worked on something else. By 1946, Karl and Theo took over the growing business from their mother and after a year or so; they decided to open up a new store in a nearby location. The two stores’ sales skyrocketed and by 1950, Kart and Theo already own 13 stores across the Ruhr Valley. In 1960, the two brothers were allegedly caught in a dispute due to a certain conflict of idea. That same year, they already own some 300 shops with annual revenue of 90 Million Deutsch Mark. This was the very reason why the Albrecht brothers decided to split the company into North and South Aldi. Since then, the company sales and size continued to increase
One of the company’s unique marketing strategies is that they do not rely on advertisement to market their products (Steinhoff 2). It indeed sounds ironic because advertising through newspapers, television ads, and radio stations is by far the best and most efficient way to market corporate and range products. The Albrecht brothers literally view advertisements as unnecessary expenses. Instead of adding up costs, they decided to make their rebate system more efficient. They automatically subtract the 3% maximum rebate rate before every sale. That way, their customers won’t have to utilize rebate stamps and fall in long lines anymore. One of the priorities of the Albrecht Brothers during their early days of building the company was reducing the size of their stores as much as possible.
Aldi is divided into Aldi North and Aldi South. The two Aldis are financially and constitutionally independent from each other. Aldi North has branches all over North Germany while Aldi South has stores all over Southern Germany. Aldi North and South’s business structure is practically decentralized. They both have several regional branches and distribution centers. The regional branches are basically the larger branches located in a certain region. Distribution centers on the other hand are responsible for the transportation of different merchandises to the stores. The individual stores, regardless of their size can then be considered as the most basic unit of Aldi’s business structure.
Being a discount chain supermarket, Aldi offers a wide range of products to its customers. Toiletries, beverages, household items, snacks, consumer electronics, computers, electrical appliances, small home appliances, flowers, gifts, toys and apparels constitute most of the items that consumers can avail at Aldi stores.
The Aldi management always promises to its customers that Aldi stores will always be the best choice to buy food and other retailed products. The company implements a low-price policy and an efficient rebate policy (Wallop 1-3). The management promised to keep the prices of the merchandises at Aldi stores as low as possible and they seem to have been eager to fulfill such promise.
Below is a list of things that Aldi Management could consider to further increase their sales, revenues, and profits.
2. Larger Store Size
3. Availability of Fresh Products
4. The Use of Carts
5. More Merchandisers and Sales Clerks
Aldi is one of the oldest companies in Germany and it has benefited from tremendous growth in the past years. It’s a company with a unique business structure and marketing strategy. Nevertheless, it still managed to grow and develop into a retail giant. However, the company could use some improvements in terms of their advertising practices, the size of their stores, availability of fresh products, the use of store carts and the number of employees.
Steinhoff, J., Hein, H., & Lorbach, I. Hinter Den Kulissen Des Discounters. Germany: Stern. 2010.
Wallop, H. Aldi Pledges to open a new store every week. London: The telegraph. 2008.