Fortunes 2020: Beate Heister & Karl Albrecht Jr., heirs, Aldi Süd

The scions of the Aldi founders preside over a supermarket empire with annual turnover in excess of $80 billion.

The scions of the Aldi founders preside over a supermarket empire with annual turnover in excess of $80 billion.


At the head of a retail multinational with over 8,000 points of sale is the brother-and-sister team of Beate Heister (pictured) and Karl Albrecht Jr., siblings who keep a low profile while furthering the fortunes of their Essen-headquartered supermarket empire.

More than 8,000 stores in a baker’s dozen of countries, uninterrupted growth and a strategy of keeping product prices and operating costs to an absolute minimum, Aldi ─ aka ALbrecht DIskont  ─ has reigned supreme in the lucrative German low-cost supermarket sector for decades.

Established in the years following the Second World War in a broken Germany mired in recession, where rationing and food shortages were commonplace, Aldi is today the leader of the 'limited-brand' supermarket sector. How did it get from there to here?

It was in Essen in 1946 that Théo and Karl Albrecht took over the running of the family grocery store and, in the years to come, transformed Aldi into a license to print money.

Their revolutionary business model was born of post-war austerity ─ they only kept non-perishable items and stocked their shelves with whatever sold the most while removing slow-sellers altogether. This allowed the brothers to keep prices below those of a traditional supermarket.

If you discount it, they will come
The formula proved an immediate hit. By mercilessly culling underperforming items, the amount of products that could be sold at a low, low price continued to grow ─ and the clientele grew too; by 1955, as the German economic miracle took hold, the brothers had 100 stores throughout the land.

"In recent years, the chain has tried to get away from its reputation as a hard-discounter pure and simple"

Although Aldi pioneered the own-brand product ─ anathema to name-brand addicted western shoppers until the end of the 20th century, but now a common sight on store shelves the world over  ─ the company began sprinkling in a number of strategic ‘big name’ products, such as Coca-Cola, in 2012. Yet this did not mean that suddenly Aldi stocked a plethora of products – you will not find eight kinds of olive oil here.   

Shoppers in the UK are aware of store advertising jingles and supermarket slogans such as ‘pocket the difference’ or ‘every little helps’, but they but would be hard-pressed to recall an Aldi equivalent. That’s because Aldi spend next to nothing on advertising, preferring to let their low prices speak for themselves.  

Smoking or non-smoking?
At the beginning of the 1960 the supermarket chain split into two: Aldi Nord and Aldi Süd. The origin of the split was a disagreement between the founders over whether to sell cigarettes in their stores. So, somewhat confusingly, there are now two Aldis.

Aldi ‘north’, as the name suggests, covers northern Germany, but also stores in Scandinavia, France and the low countries, and was originally run by Théo Albrecht, while Aldi ‘south’ with Karl senior in charge initially, had the south of the country and, subsequently, Austria and Switzerland in addition to the UK and Ireland, to name but a few.

In recent years, the chain has tried to get away from its reputation as a hard-discounter pure and simple. The issue that has dogged Aldi and its low-cost German rival Lidl alike, is that, despite all their success, they have never been one-stop shops, people usually have an Aldi shopping list, usually containing essential, everyday items and another for a ‘traditional’ supermarket indulgences. The solution? Offer a more ‘glamorous’ experience, with the emphasis on locally produced, organic, fresh produce – a dash of Whole Foods in a world of Walmart.

The Aldi recipe for success has evolved alongside the tastes of shoppers and it’s clear that, in the era of coronavirus, where people are watching what they spend more than ever, we are all Aldi shoppers now - and that bodes well for Heister and Albrecht Jr.    

 

Read the full Special Report: Fortunes 2020

Covid ravaged the world economy in 2020, but as our Fortunes rankings prove, it is an ill wind that blows nobody any good.
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