Wednesday, August 4, 2010

What Makes the Aldi Discount Empire Tick

The death of Aldi co-founder Theo Albrecht marked the end of an era for Germany's largest discounter. The company has found success as it expands into foreign markets, including other European countries and the United States, but what does the future hold for the ultra-secretive grocery chain?

An old file in the public records office of the western German town of Essen contains two entries on Karl and Theo Albrecht, the billionaire founders of the Aldi discount grocery empire. According to one entry dated the end of January 1997, Karl purchased eight cemetery plots in a graveyard in the city's Bredeney district for 69,984 deutsche marks (€35,782) for himself and his family. Two months later, his brother followed suit and paid 65,912 marks (€33,700) for 14 plots in the same cemetery.

Nothing happened after that for a long time. Weeds sprouted on the land and the cemetery administration sent the Albrechts a reminder to take care of their plots. Finally, an Aldi truck appeared loaded with yew trees, rhododendrons and cypresses to adorn the site. The clan had simply waited until its own company had a discount on plants.
That sums up the Albrechts, that sums up Aldi. Theo and his brother Karl, who is two years older, laid the cornerstone for what became their discount empire in 1948 when they took over their mother's small grocery store. In 1961, they changed the name to Albrecht's Discount -- or "Aldi" for short. Within decades, they had built a retail chain worth billions, one which permanently changed the way food retailing was done in both Germany and across the globe.

On Wednesday of last week, the story of the most eccentric, secretive and mysterious pair of siblings in Germany post-war economic history came to an end with the death of Theo.

Theo was one of the richest men in the world, with a personal fortune estimated by Forbes magazine at $16.7 billion recently. Yet he would use outdated envelopes bearing the old four-digit German postcode for his correspondence, and simply had his staff replace the number with the new five-digit code.

To read more: http://www.spiegel.de/international/business/0,1518,709937,00.html

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