How the Albrecht brothers, Germany's richest man, managed to expand retail at a small profit to seize the hegemony of Europe

Born into a family of miners, they took over a small grocery store from their mother as a child. Nowadays, "Aldi" is famous all over the world, but few people know the boss's honorific name. In recent years, the top of the European rich list has been a pair of German brothers named Carl Albrecht and Teo Albrecht, not only that, in the past 10 years, the brothers have soared in the ranking of the rich list of the Forbes in the United States, and the brothers' wealth in 2004 totaled 26.8 billion US dollars, followed by Bill Gates and Warren; After Buffett, he has been ranked third in the world's richest ranking for 3 consecutive years. Despite being the richest man in Europe, the brothers are not well known, and even in their native Germany, most people only know the famous cheap supermarket chain "Aldi", but do not know who the owner of Aldi is. Outside Germany, few people know the Albrecht brothers.

Originating "Poor People's Shop"

The owner of the "Aldi" store, short for the German Albrecht outlet, was born in a family of miners in Essen, took over a grocery store selling cheese from their mother after World War II, and for more than 50 years, the brothers have adhered to a simple and cheap business strategy, but the business has grown bigger and bigger. At that time, both in terms of area and product type, Aldi Supermarket could only be regarded as a small supermarket. Compared to other stores, the biggest feature of the Aldi chain is that it is cheap, even if converted into yuan, relative to the income level of today's Chinese. The prices of several daily consumer goods sold by the store all year round (converted into RMB) are as follows: 1 kg of flour 1 or 8 yuan, 1 liter of pure apple juice 3 or 5 yuan, 1 liter of boxed milk 3 yuan. Because of the cheap price, Aldi has been popular with German low-income families and foreign students from the beginning, but it is also because it is famous for its cheap price, which has produced a prejudice in many people's minds that cheap is not good. For a long time, Germans disdained to shop at the store as long as they had decent economic conditions, because walking on the street with Aldi's shopping bags was humiliating.

Until the 90s, under the premise of keeping it cheap, Aldi constantly adjusted the structure and grade of goods, and gradually changed the image in the minds of Germans. Long-term low prices and mid-range quality have become the main factors that attract housewives to shop here. Nowadays, shopping at Aldi is no longer a loss of face, and there are many people who drive Mercedes and BMW to Aldi to shop. According to statistics, 95% of workers, about 85% of employees and civil servants in Germany regularly go shopping in Aldi. In the past year, as many companies have shrunk in sales and profits due to the economic downturn, Aldi has increased its customers by 20% and sales by 10%.

Aldi now has more than 6,000 stores in 12 countries outside Germany, including the United States, and is rapidly expanding at the rate of opening at least one new store a week. No wonder Forbes lamented that if the Ah brothers were not all over 80 years old, they might surpass Gates to become the richest man in the world in a few years.

Embedding new concepts into cheap goods is also good goods cheap, although Aldi is the foundation of his life, but for decades, Aldi has been able to expand rapidly in European and American countries with extremely picky customers and fierce competition, and won a large number of customers, relying on not just cheap. In addition to the company sending its own people for testing, Aldi also hires a third-party inspection agency to test the quality of goods, once the sampling is unqualified, the supplier will not only lose a large customer, but also have to pay a huge compensation.

Due to Aldi's high and stable demand, once selected as its designated supplier, the manufacturer's life will be better. There is a saying in the supplier circle: competing for Aldi's long-term supply contract is as difficult as qualifying for the German Bundesliga, and being abandoned by Aldi is worse than being betrayed by his wife.

In order to reduce the cost and price of goods, Aldi conducts global procurement and looks for the cheapest products at comprehensive cost around the world, but there are also many products in the store that are processed by manufacturers using their own brands. In order to ensure the quality of products, Aldi often entrusts famous brand manufacturers in similar products to supply, so that there are many products on Aldi's shelves that are not famous brands but are made by famous brand product manufacturers. This approach can not only significantly reduce the price of products, but also maintain the independence of Aldi's independent pricing, while successfully avoiding the resistance of competitors to sell famous brand goods at low prices.

As a large company with thousands of chain stores, Aldi has never had a public relations department and advertising department, and has never invested a penny in any advertising company in more than 50 years of development. The only way the company can introduce itself to the outside world is to publish weekly update notices that are available in stores for customers to pick up or clip in a local newspaper to distribute to customers, informing customers a week in advance of what special items will be available next week. Compared to large chains, Aldi stores have a pitiful variety of the same type of goods, generally only one or two options, and the price has remained the same for many years. The products supplied in each branch are basically the same, and even the shelf layout in the branches across the country is roughly the same, and many customers are familiar with the placement and price of the products in the store, thus cultivating a high sense of dependence and loyalty to Aldi's products.

In order to adapt to the fierce competition in the market and strive for more customers, Aldi also often organizes some other kinds of special goods, such as electrical appliances, textiles, etc., but does not continue to supply, just organizes a batch, sells a batch, and sells out, but the price is absolutely cheap. In particular, the computer sold by Aldi every year has been tested several times by relevant departments, and its performance price is much superior to that of brand-name products. Therefore, every day, at four or five o'clock in the morning, people will continue to rush to the entrance of Aldi to line up a spectacular long queue, and those who go late often have to wait until the next year. Due to the limited variety of goods and the large number of customers, Aldi's goods flow quickly and are therefore fresh, which is crucial for stores that mainly deal with daily necessities such as food.

Although the price is extremely low, due to the effective control of procurement costs, management costs and logistics costs, Aldi has successfully reduced the cost to the minimum, so Aldi's profit is not low. According to statistics, of all the retail enterprises in Germany, Aldi's profitability is now the strongest. The sales profit margin of general commercial enterprises in Germany is 0, 5%-1, 5%, but Aldi's sales profit margin is close to 5%. The higher sales profit margin shows that Aldi did not suffer losses while implementing the low-price strategy, but made a lot of profits, while its competitors sold at high prices but only had a small profit, and it was inevitable that there would be a crisis of survival in the bad years!

Today, there are more than 3,700 Aldi supermarkets in Germany and more than 2,600 in the rest of the world, with annual sales of 30 billion euros and annual pre-tax revenues of 1.5 billion euros. Aldi's business model has received more and more attention, and in Germany, many retail stores have begun to emulate and copy the Aldi model, and have become a strong competitor to Aldi. For more than 50 years, the Albrecht brothers have grown in business, but they have kept a low profile, which gives their legendary history a mysterious color. Although the brothers were already rich and rivaled, they lived a simple life, had neither a palace nor a mansion, and never appeared at celebrity gatherings. However, despite the brothers' low-key behavior, they still could not escape the fate of being kidnapped.

In 1971, Teo Albrecht was kidnapped by gangsters as he left the company and returned home. When the kidnappers caught this little old man in a crumpled chemical fiber suit and his unattractive appearance, he couldn't believe that this was a billionaire. After paying a record DM ransom, Te'o was free. It was from the amount of ransom that the Germans knew how much silver the brothers earned from cheap shops. Because the brothers have never accepted any interviews for decades and live an almost secluded life, even with the rapid development of online media, there is not a word about the brothers, and the media took their latest photos 15 years ago.

Now people only know that the older brother Carl is 82 years old and the younger brother Te'o is 80 years old. The Aldi supermarket chain is divided into two parts: Aldi North Company and Aldi South Company. Aldi supermarkets in the north and east of Germany are younger brothers, and older brothers in the south and west. Like the division of Germany, the two brothers divided the world, the English-speaking countries such as the United States and Britain and Austria as older brothers, and the rest of continental Europe and northern Europe as younger brothers. According to the list of the world's richest people published by Forbes magazine in 2004, Karl's personal net worth is more than 23 billion US dollars, ranking third, and Special Olympics' personal net worth is more than 18.1 billion US dollars, ranking 14th, and their total asset value reaches 41.1 billion US dollars. Now that the German and Western economies are sluggish, it is reasonable that Aldi, once disparaged as a "poor man's shop", is getting more and more prosperous. "The tighter people are on hand, the better our lives will be," the brothers' mother said when she handed over her small shop to them, but she would not have imagined that her wise quote about bargains would make her the richest man in Germany and even Europe.