Striving for Customer Benefit: The Case of Aldi

Abstract

Aldi opened one of its first hard discount grocery stores in Germany in 1962. During the same year, Sam Walton inaugurated his first Wal-Mart in the United States. In spite of similarities, such as the attention towards low prices, the two companies were about to follow quite different strategies: while Wal-Mart focused on opening stores in rural communities and small towns, tapping into new markets as a sensible geographic expansion, Aldi much more thoroughly competed on price. The genuine discount business model did not start with Wal-Mart, but with Aldi—the latter being, beyond doubt, the pioneer among hard discounters in the retail industry. Hard discounters, also called limited-line stores, focus on selling a high volume of a limited and flat product range, concentrating on essentials and simplification, as well as on cost and price leadership.