In the UK we may think it’s something new, but Aldi is the grand-daddy of the German supermarket system, and back home it comes in two varieties.
Germans do supermarkets in a different way to the rest of the world. The American way is to do it bigger, brasher, better and on the bypass, but German supermarkets are small-to-medium, pragmatic, and they have a tradition of squeezing themselves into downtown (although they too are beginning to get the American bug). The pioneer of the German approach is Aldi, for whom presentation just means boxes on pallets on the floor, and marketing is something that other people waste their money on. And whereas the American-style supermarket chains pride themselves on providing groaning shelves of everything under the sun, Aldi is selective based on what’s available, what’s good and what’s cheap. American-style is reliable and comprehensive; Aldi-style is often a surprise.
The Aldi concept has only come to our attention in recent years, and it has been followed across the Channel by Lidl and more recently Netto, all three of which also make a virtue out of being matter-of-fact. But actually Aldi has existed since 1913, when the first Albrecht Discount store was opened in Essen, while Lidl only really started in the 1970s.
The brothers had a disagreement in 1960 over whether to sell cigarettes at the till
Brothers Karl and Theo Albrecht (now retired, but still Germany’s richest men) developed their mother’s business in the industrial Ruhr region just after the end of the war, when money was very tight. They kept their shops as small as possible, were ruthless with merchandise that didn’t sell, and refused to spend any money on conventional advertising and brand promotion – all polices still fundamentally adhered to, at least in Germany.
Expansion was rapid, but then the brothers had a disagreement in 1960 over whether to sell cigarettes at the till, and the group split into Aldi Nord and Aldi Süd, divided by the Aldi equator. Their logos are a bit different, and they’ve also expanded in different directions, but some of the product lines are shared and they’ve remained respectful of each other’s territory. So while Aldi Nord has moved into northern and eastern Europe, Aldi Süd has spread its wings and crossed the water to Britain, the USA and Australia. In these territories it has felt the need to do advertising promotion, but the original policy of no advertising still applies in Germany, where grocery prices are around 15-20 percent lower than in the rest of Europe.
The recession has definitely helped Aldi’s (and Lidl’s) sales figures in the UK. In general, market surveys have demonstrated that they are substantially cheaper than the traditional big supermarkets, but there has also been much soul searching as customers who feel that the likes of Waitrose and M&S match their social status, have to re-adjust their shopping habits to reflect harsher economic realities. Whereas once they might have dressed up for going to Waitrose, now they dress down for Aldi, and hope they won’t be recognized.