Private Label

Karl Albrecht, Discount Chain Aldi Co-founder, Dies

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Karl Hans Albrecht, co-founder of the Aldi supermarket chain, passed away at the age of 94 last Wednesday in Essen, Germany, though it was not reported to the press until July 21, the day of the funeral. Having amassed a fortune said to be equivalent to almost $26 billion, he was ranked as the richest man in Germany and No. 24 on the world’s billionaire list by Forbes magazine.

Along with his brother Theo, who died in 2010 at age 88 with a net worth of $18.8 billion, he returned to hometown Essen after the conclusion of World War II. There he found the small family grocery store run by his mother still standing despite more than 200 bombing raids on the industrial city by Britain’s Royal Air Force.

Albrecht-obit-master180The brothers worked together to build the deep-discount retailing business from next to nothing in 1946 to more than 300 shops throughout most of West Germany by 1960. Thereafter the company was split into two divisions, with Karl running Aldi South and Theo heading up Aldi North.

The company today operates more than 9,600 outlets globally, including approximately1,700 units in the USA (including Aldi North’s 418 Trader Joe’s locations). Aldi’s no-frills, limited assortment stores typically carry no more than 2,000 items (primarily private labels), compared to up to 45,000 stock keep units found in many conventional supermarkets.

Aldi’s retail empire includes operations in the United Kingdom (where along with fellow German discount chain Lidl it has shaken up the domestic retail establishment), as well as Australia and 13 other countries.

Karl Aldi stepped down from day-to-day leadership of the company in 1994, but remained on its advisory board until 2002. Ten years later Aldi South reportedly was ringing up approximately EUR 15 billion ($20 billion) in annual sales.

While the advent of deep discounters such as Aldi has taken a toll on the market shares of household name brands in favor of private labels, frozen food producers supplying the chain have benefitted nicely from doing business with Aldi.

“Margins may be small, but volumes are large,” a pizza supplier told “We conduct business with an open book, and Aldi always assures a win-win-win result the producer, seller and buyer.”