The Business Model of ALDI

ALDI is a global supermarket chain from Germany with several subsidiaries in eleven countries. It is mainly known for high product quality at a low price, and for its quick and easy shopping experience. Founded as a family business in 1946, ALDI was formally split into ALDI North and ALDI South in 1961 - this analysis will focus solely on ALDI South. ALDI revolutionized the supermarket industry with private labels and a warehouse-like product presentation style for a faster shopping process. As a result, they saved costs early on and were able to provide products at much lower prices. ALDI stores sell everything from eggs to alcohol to vacuum cleaners, but ALDI is currently also developing subsidiary brands such as Aldi Talk and Aldi Gaming to expand into other sectors. ALDI's success is mainly based on three core concepts: low operating costs, high profit margins through private brands and own article numbers for faster assortment changes and checkout processes. ALDI does not have the largest selection or the most exclusive shopping experience on the market, but by minimizing unnecessary mark-ups, it sells everyday products at significantly cheaper prices than its competitors. The ALDI business model has worked for over fifty years; they have been the second largest supermarket chain in Europe since 2020 and are on target to become the third largest supermarket chain in the US by the end of 2022.