The German chain Aldi opened its first Australian store in Sydney in 2001 and by 2004 had 54 stores across the eastern states. Aldi claimed that its proposition of ‘smarter shopping’ was supported by having no artificial colours in any produce, a high proportion of local produce and everyday low prices rather than fluctuating ‘specials’.
Aldi was founded by brothers Karl and Theo Albrecht in 1946 when they took over their mother’s store in Essen, Germany. The store had been in operation since 1913. By 1954 the brothers had 50 stores in Germany.
Since 1960 there have been two separate companies, now named Aldi Nord and Aldi Sud, each one having initially been controlled by one of the Albrecht brothers. The name itself, a combination of Albrecht and discount, dates from 1962.
Unlike other chains at the time which offered discount coupons, the Albrecht operation built the discount into its everyday prices. From the beginning, the range the stores stocked was limited, with only the best-selling items being retained.
The first stores outside Germany were in Austria and the Netherlands in the late 1960s and early 1970s respectively. Today there are more than 10,000 stores serving millions of people across three continents.
In Australia, Aldi’s launch coincided with the demise of the grocery discounter Franklins. The first stores were in the Sydney suburbs of Marrickville and Bankstown. Initially, the stores did not advertise and relied on word-of-mouth to gain traction in the market. Instead of a wide range of national brands, the chain focused on home brands and low prices.
The first Melbourne stores opened in 2003 at West Heidelberg and Cherside Park. At first confined to the eastern states, Aldi expanded into South Australia and Western Australia in 2016. By 2017 it claimed 10 per cent of the Australian grocery spend.
While still renowned for its weird special buys (which range from electrical appliances to camping gear to novelty garden lamps) Aldi has made its stores a little more customer friendly in recent years. The chain has even won awards for its house-brand wines. In July 2018 Roy Morgan research revealed Aldi as Australia’s most trusted brand, despite its German ownership.
The success of the chain has caused Coles and Woolworths to re-think their business model and has led to an increased emphasis on their house brand products.