Aldi

In: Business and Management

Submitted By simon21
Words 642
Pages 3
Privately held by brothers Theo and Karl Albrecht, Aldi Group is Germany's leading grocery store chain and a top competitor in the global retail food industry. Cited by some as Europe's largest retailer, the chain has found success by going against virtually every standard of supermarketing, from its legendary reticence to the "Spartan atmosphere" of its stores. By the early 1990s the company operated an estimated 3,000 stores under the Aldi, Hofer, and Combi names in Germany, the Netherlands, Belgium, Denmark, Austria, the United States, France, and the United Kingdom.

Established in 1913 in Germany, Aldi operates what are known in the grocery business as "limited-assortment" stores or "hard discounters." Aldi has taken this retail concept, which features low overhead and scanty selection, to its leanest, meanest extreme. Unlike the vast majority of supermarket chains, which are continuously increasing their product offerings and selling space, Aldi holds selection at its stores to about 500 items. The bulk of these items are packaged grocery or dry goods. All other grocery formats carry at least ten times Aldi's typical 500-item lineup. Up to 95 percent of Aldi's offerings are sold under private or packer labels, and some of these products are made expressly for the chain. A 1993 examination of the limited-assortment niche noted that successful discounters (like Aldi) work closely with manufacturers to design products that are cheaper to transport, stock, and sell than name-brand goods. National brands are sometimes offered, but many industry observers speculate that Aldi only stocks them to highlight its own discounts.

By limiting consumer choice, Aldi saves money in several ways. Aldi stores are correspondingly small--usually 8,000 to 15,000 square feet--compared to the 50,000 to 125,000 square feet typically utilized by competitors with larger catalogs of…...

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