Aldi Franchising in the UK

10/04/2019 13:00 | International franchises

aldi franchising uk

Supermarkets are a staple in every town and city and, due to their essentiality, will always be in demand.

The Market

Up until 2014, the UK supermarket industry operated under a three-tier system, with Waitrose and Marks & Spencer being a more high-end choice, Morrisons and Asda catering to a more cost-conscious customer, and Tesco and Sainsburys providing for everyone in between. But the emergence of the German chains, Aldi and Lidl, disrupted this system. Despite both brands entering the UK market in the 1990s, they didnt start to have a powerful influence in the sector until much later. Their arrival sparked a fourth discount tier. By providing a basic offering and stocking fewer product lines, they started to take custom from the supermarkets in the middle of the market. Asda and Morrisons were no longer the cheapest options and Tesco and Sainsburys went from being reasonably priced to seeming overpriced.

There was a clear connection between the fact that the two discounters started to rapidly expand whilst customers and the economy were recovering from the financial crisis in 2008. Years without wage increases resulted in a vast number of people becoming enticed by the discount supermarkets low prices.

Aldi and Lidls combined market share has doubled from under 6 percent in 2012 to over 13 percent today, while the big four (Tesco, Sainsburys, Asda, Morrisons), whilst still dominating the market, have loosened their grip, with their combined market share now being 69 percent instead of a more impressive 76 percent.

Therefore, starting a discount supermarket franchise could be a lucrative supermarket franchise opportunity with great area for growth. Or you could opt to own a smaller grocery store, particularly if you are setting up a franchise in a small town where people have no desire to travel far and wide to get their weekly shop or a few bits.

If you choose to start a supermarket franchise such as a SPAR, you can feel secure under business support, training and development, an established brand, a trusted customer base and a world class distribution service.

Aldi

Aldi is a brand of two German discount supermarket chains with over 10,000 stores in 20 countries, with sales of over £10 billion.

History of Aldi

Aldis story began in 1913 when Frau 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, Annas sons, Karl and Theo, took over their mothers store and transformed it into the first discount store in the world. They founded Albrecht KG in 1948 and, after seeing success, went on to open four more stores in the local area not long after.

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 abstained from any form of luxury even after becoming prosperous.

The brothers devised a simple business plan that kept in line with their thrift-conscious ideology: keeping prices incredibly low by only stocking non-perishable items and removing slow-sellers from shelves.

To avoid shelling out on expensive overheads and to build their brand slowly but surely, the brothers decided to concentrate on developing a chain of small stores.

The business popularity spread through word of mouth. Theo and Karl kept costs down by avoiding paying for advertising. By 1950, they owned 13 stores in Germanys Ruhr Valley.

In 1954, keen to spearhead innovation, the Albrechts made retail history by opening Germanys first self-service store.

By 1960, the entrepreneurial brothers owned 300 stores with an annual turnover in the millions. The same 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 Sd, which did not.

In 1962, the brothers were still working together regardless of their earlier disagreement. They decided to rename the groups Aldi Nord and Aldi Sd, with Aldi being taken from the first two letters of Albrecht and Diskont.

Aldi Nord managed stores in North Germany, while Aldi Sd 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 Sd stores in Germany at this time.
Aldi started its international expansion mission in 1967 when Aldi Sd took over Hofer, an Austrian grocery chain, and Aldi Nord followed suit and expanded to Belgium in 1973.

In 1976, Aldi expanded to the US, opening its first store in Iowa. With its American headquarters in Batavia, Illinois, Aldi boasts more than 1,600 stores across 35 states and employs over 25,000 people.

In 1979, a trust headed by Aldi Nords Theo bought the discount chain Trader Joes, 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 the brothers retired as CEOs and the control of Aldi Sd was passed on to Siepmann Foundation and Aldi Nord to Markus Foundation.

Aldis Business Model

  • Consistency. Aldi doesnt offer seasonal discount options and focuses on providing cheaper products all year round. The business is also consistent when dealing with the store, customers and employees.
  • Simplicity. Aldi provides a no-frills shopping experience characterised by simplicity and efficiency. The company doesnt own huge stores and sell numerous products. All the products it does sell are in their original shipping containers, which saves time for employees. Also, Aldi avoids selling products that the big brands sell, as the company believes that they make customers pay for their marketing expenses. Therefore, 90 percent of the products on its shelves are from its own brand line and the company partners with local vendors to sell private brands at lower prices but similar quality. This also allows the company to negotiate prices, cut out middlemen and cut back on marketing costs.
  • Responsibility. Aldi values its employees, customers and other parties. It pays employees generously enough to increase their efficiency, focuses more on customer satisfaction instead of marketing and sources the majority of its products locally.

Is Aldi a Franchise?

Aldi is a privately-owned company, there is no information online to suggest that Aldi is a franchise.

Aldi Franchise Opportunities

As Aldi isnt a franchise, unfortunately there arent any franchise opportunities. However, take a look at Point Franchises UK Franchise Directory to take a look at some of the best franchises at the moment.

Aldi Franchise Cost

There isnt any information about what an Aldi franchise would cost.

Other recent articles
Did you enjoy this article? Please rate this article
Average rating (4.5/5) based on 2 vote(s)

0 Comments

post a comment

Characters remaining: 250