Q&A: Does Aldi Franchise in the UK?
In recent years, Aldi has exploded into the supermarket sector, using its low prices to entice customers away from industry leaders like Sainsbury’s and Tesco. We look at whether there is an Aldi franchise model and how you can get involved with the brand.
Supermarkets are a staple in every town and city, frequently visited by thousands of shoppers. But it’s no secret that the grocery store market has had a shake-up in the past few years. As so-called ‘discount stores’ have made an entrance, the sales of the four ‘big’ supermarkets, Sainsbury’s, Tesco, Asda and Morrisons, have declined. Aldi and Lidl are arguably the most dominant discount stores, and here we’ll take a look at the first of the two. So, does Aldi franchise?
Aldi has won over many shoppers with its interesting product range and attractive prices. Today, the brand has more than 10,000 stores in 20 countries, and enjoys sales of over £10 billion. Before we look at the franchise models, let’s find out more about how this success came about.
History of Aldi
Aldi’s story began in 1913, when Anna Albrecht opened the Karl Albrecht Spiritousen and Lebensmittel grocery store in Schonnebreck, a low-income suburb of Essen, Germany. After World War II came to an end, Anna’s sons, Karl and Theo, took over their mother’s store and transformed it into a ‘discount store’. They founded Albrecht KG in 1948 and, after seeing success, went on to open four more stores in the local area.
The family were famous for their thrifty ways. Obsessed with saving where possible, Theo was said to recycle used pencil stubs, wear old, worn suits and abstain from any form of luxury – even after becoming prosperous.
The brothers devised a simple business plan with their thrift-conscious ideology in mind: keep prices incredibly low by only stocking non-perishable items and removing slow-sellers from shelves. To build their brand slowly but surely and avoid shelling out on expensive overheads, the brothers decided to concentrate on developing a chain of small stores.
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The business’ popularity spread quickly through word of mouth, so Theo and Karl could keep costs down by not paying for advertising. By 1950, they operated 13 stores in Germany’s Ruhr Valley. In 1954, keen to spearhead innovation, the Albrechts made retail history by opening Germany’s first self-service store.
By 1960, the entrepreneurial brothers owned 300 stores with an annual turnover in the millions. In this year, they split the chain into two separate groups after disagreeing on whether they should sell cigarettes. Theo headed Albrecht-Diskont Nord, which sold cigarettes, whilst Karl became the CEO of Albrecht-Diskont Süd, which did not.
In 1962, the brothers were still working together despite their earlier disagreement. They decided to rename the groups Aldi Nord and Aldi Süd, taking ‘Aldi’ from the first two letters of Albrecht and Diskont. Aldi Nord managed stores in North Germany, while Aldi Süd took over stores in the South. The boarder between was known as the ‘Aldi Equator’. The two businesses became legally and financially separate in 1966 – there were 200 Aldi Süd stores in Germany at this time.
Did you know? There are over 10,000 Aldi stores across the world.
An international expansion mission began in 1967 when Aldi Süd took over Hofer, an Austrian grocery chain, and Aldi Nord followed suit and expanded to Belgium in 1973. In 1976, Aldi expanded into the US, opening its first store in Iowa. Now, Aldi has more than 1,600 stores across 35 states and employs over 25,000 people.
In 1979, a trust headed by Aldi Nord’s Theo bought the discount chain Trader Joe’s, which operates from 475 locations in the US.
Aldi came to the UK in 1990, opening its first store in Birmingham. The brand now has over 620 stores in the UK and opens a new store almost every week! In 1993, however, the brothers retired as CEOs and the control of Aldi Nord was passed on to the Markus Foundation and Aldi Süd to the Siepmann Foundation.
Does Aldi franchise?
Aldi is a privately-owned company and there is no information to suggest that there is an Aldi franchise model.
How to get involved with Aldi
If you’re desperate to get involved with Aldi, you could consider joining it as an employee. The supermarket chain has roles available in administration, recruitment, corporate logistics, global business coordination, quality control, customer service and more. Just head to Aldi’s careers site to browse your options.
The discount store market in the UK
Up until 2014, the UK supermarket industry operated under a three-tier system. Waitrose and Marks & Spencer were high-end choices, Morrisons and Asda catered to a more cost-conscious customer, and Tesco and Sainsbury’s provided for everyone in between.
But the emergence of German chains Aldi and Lidl disrupted the status quo, as their arrival sparked a fourth discount tier. By providing a basic offering and stocking fewer product lines, they started to take custom from the leading supermarkets. Asda and Morrisons were no longer the cheapest options and, for many, Tesco and Sainsbury’s went from being reasonably priced to seemingly overpriced.
There was a clear connection between the two discount stores’ rapid expansion and the financial crisis of 2008. Years without wage increases resulted in a vast number of people visiting the discount supermarkets.
In recent years, Aldi has experienced a 10.6 percent year-on-year rise in sales and now holds a market share of 8 percent. This places it as the fifth largest supermarket chain in the UK, behind Tesco, Sainsbury’s, Asda and Morrisons.
Similar franchise opportunities
As you can see, discount supermarkets have the potential to bring in a significant profit. Unfortunately, there’s no way to benefit from this as a franchisee, so let’s take a quick look at a few franchise opportunities in the wider grocery store sector. Some offer the chance to set up your own convenience store, while others are looking for existing shop owners who would like to convert their enterprise to a well-known brand.
If you’re hoping to join a hugely successful, world-renowned grocery store franchise, look no further than SPAR. The brand began in 1932 with one Dutch store. By championing “fresh food”, “fresh-looking stores” and “fresh ideas”, SPAR has become the world’s largest food retail chain, operating over 12,000 stores across 34 countries. In the UK alone, 50,000 friendly staff form the face of the brand, helping to generate a turnover of over £3 billion.
- How much you need to invest: SPAR hasn’t published details about its investment requirements, but you can find out by getting in touch with the franchise.
- What you get for your investment: Investors can benefit from the worldwide recognition and trust of the brand and extensive financial support. SPAR stands out from the competition as a result of its own range of essentials that boasts over 1,000 lines. If you are interested in joining SPAR, simply head to their website to get started.
2. One Stop
This subsidiary of Tesco operates more than 770 company-owned stores and 160 franchisee-owned stores across England, Wales and Scotland. Franchisees are not constrained to a specified list of supplies; as long as they purchase 95 percent of their stock from One Stop, they have the freedom to select their own local suppliers to make up the remaining five percent.
- How much you need to invest: One Stop is looking for established retailers who would like to convert their store into a One Stop franchise and are willing to pay up to £50,000 to make that happen.
- What you get for your investment: The chain will provide a store re-fit, refreshing the interior and exterior of the shop to reflect the One Stop brand in accordance with the existing store’s size, dimensions and features. Fill out the company’s online form to find out whether you fit the criteria and qualify for a free consultation.
3. Bargain Booze
This grocery store franchise currently operates a network of 700 company-owned branches and 350 units under a number of names, including BB, Select, Central and Wine Rack.
- How much you need to invest: Bargain Booze hasn't released its investment figures, but if you generate sales of more than £15,000 per week, the chain wants to hear from you.
- What you get for your investment: Bargain Booze is offering a three-year franchise agreement, but you may be able to renew it once the term is up.
Benefitting from changing consumer habits
Although you can’t start an Aldi franchise unit, there are plenty of ways to capitalise on changing consumer behaviours. Yes, shoppers are increasingly turning to discount stores, but we’re using smaller convenience stores far more often too. So, investing in one of these local store chains could prove to be a wise business move. To discover more convenience store franchises, click here.
To find out what other brands are offering franchise opportunities in the retail sector, browse our catalogue here.
Alice Tuffery, Point Franchise ©
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