More Talk Of Aldi Nord and Aldi Süd Merging
There are fresh rumours that the two Aldi entities – Nord and Süd – are close to a merger, ending a separation that has lasted over 60 years.
German business publication Manager Magazin said that “rough plans” to reunify the two Aldi operations have already been drawn up, while the ownership structure of an enlarged group is said to have been “clarified”.
Aldi split into two distinct groups in 1961 due to a difference in opinion between the founding brothers Theo and Karl Albrecht on whether to sell cigarettes. The discounter’s German operations are currently split between Aldi Nord and Aldi Süd. Internationally, Aldi Nord operates in Denmark, France, the Benelux countries, Portugal, Spain and Poland, while Aldi Süd operates in Ireland, Great Britain, Hungary, Italy, Austria, Slovenia, Switzerland, Australia, China, and the USA.
Whilst both use different branding, they follow a similar model and have been harmonising their ranges and product development in recent years.
The report by Manager Magazin stated that a joint holding company would be established, with both companies represented equally. Germany’s competition regulator is expected to give its blessing to a merger.
A combined Aldi would have more than 11,000 outlets across four continents and generate sales of around €120bn. Analysts noted that shoppers would benefit from even cheaper prices, given the combined buying power of an enlarged Aldi.
NAM Implications:
- The key issue for suppliers will be dealing with a €120bn Aldi with appropriate buying muscle.
- Aldi’s short-term gain will be the ability to grow share via even lower prices.
- However, the emergence of Retail Media means that retail rivals will gain significant extra revenue via RM and First-Party Data….
- …probably funding price cuts.
- Therefore Aldi will have to decide to introduce a loyalty scheme and add more brands…
- …in order to maintain trajectory.
- (Opportunity for branded suppliers to anticipate ‘the obvious’?)
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