Discount Retail Chain Aldi Denmark (German family owned) has decided to withdraw from the Danish market and entered into an agreement with Scandinavian discount retail chain REMA 1000 Denmark, which will buy 114 of Aldi Denmark's 188 stores. Aldi will close or sell the other stores consecutively during 2023.
The decision to leave the Danish market, which has a discounter market share of 46%, has been made as part of Aldi Nord Group of Companies' transformation strategy in order to focus efforts on the other eight more successful European markets, where Aldi is experiencing strong growth, creating better results and seeing long-term potential. Recently Aldi mentioned to prepare another acquisition in Poland (see also our blog Poland: Aldi wants to have 500 - 600 stores in Poland within 5 years [discountretailconsulting.com]) after its most recent acquisition of LeaderPrice in 2020 in France.
The European discount chain Aldi Nord has therefore entered into a conditional agreement with Rema 1000 Denmark, which is part of Reitan Retail (privately owned Norwegian conglomerate retail company operating across 8 Nordic and Baltic countries, with discount format Rema 1000 format, seven-eleven convenience stores and UNO-X gas stations), for the transfer of 114 Danish Aldi stores. The transaction is subject to the approval of the Danish competition authorities.
"Aldi opened in Denmark in 1977 as the first discount grocery chain in Denmark and served as a huge inspiration for our owner, Odd Reitan, when he opened the first Rema 1000s in Trondhjem in 1979. So, it is with equal parts humility and pride that we now we can carry on the flag. The acquisition gives us the opportunity to establish more Rema 1000 stores with independent Rema merchants in local communities where we are not present today, with high quality products at low prices. We look forward to to welcome our new colleagues to the Rema community," says Henrik Burkal, CEO of discounter Rema 1000 Denmark.
Around 1,600 of Aldi Denmark's approx. 2,800 employees will be transfered to discounter Rema 1000 as part of the transaction, which includes the employees in the 114 stores and at the logistics center in Kolding as well as the truck drivers from Aldi's three Danish logistics centers. The other main discounters present in Denmark, Lidl and Netto (part of the Danish Salling Group) or perhaps market entry newcomer non-food discounter Action will be the most obvious candidates to take over the rest of the 74 Aldi stores.
The logistics for the stores will be integrated into Rema 1000's existing logistics, and the three Aldi logistics centers will be closed down in their current mode of operation. The employees in Kolding will be offered employment at Rema 1000's current warehouses in Vejle and Horsens.
The sale of additional Aldi stores to players other than Rema 1000 will result in an increased number of employees being able to secure employment. Aldi Denmark will offer measures to ensure re-employment for employees who will not be covered by the transfer of activities. Rema 1000 will offer a job exchange for Aldi employees who do not transfer to Rema 1000 as part of the transaction.
"After a careful review of the activities in all markets, Aldi Nord has made a difficult but necessary strategic decision to leave the Danish market. It is a regrettable decision for many of our loyal and skilled employees, who form the backbone of Aldi's Danish business, and we will do our utmost to ensure them the best imaginable future," says Finn Tang, CEO of Aldi Denmark.
The 114 Aldi stores covered by the transaction will remain open until the transition to Rema 1000 Denmark, which is subject to the approval of the Danish competition authorities. Subject to the outcome of the approval process, Rema 1000 expects to convert and reopen the majority of Aldi stores under the Rema 1000 brand. A number of Aldi stores not covered by the transaction with Rema 1000 will remain open and are expected to be sold to other players. The remaining stores will be closed at the end of January 2023, and the head office functions in Denmark will be wound up during the year.
The parties have agreed not to publish the purchase price or other conditions in the agreement, but will certainly be published soon in the annual report of Reitan Retail 2022.
It is not the first time that a large international discounter had to leave the Scandinavian market place, in 2008 Lidl left Norway, as it could not beat the local discounters which have a market share of more than 40%.
About ALDI Denmark
Aldi Denmark opened its first store in 1977 as the first discount chain in Denmark. Today there are 188 Aldi stores and three logistics centers with around 2,800 employees. Aldi's basic idea is to offer a carefully selected range of quality everyday goods at the lowest possible price. Aldi Denmark is part of the Aldi Nord Group of Companies, which is present in nine European countries and employs more than 86,000 employees.
About REMA 1000 Denmark
Rema 1000 opened its first two stores in Denmark in 1994. Today, the discount chain has 363 stores across the country, all of which are run according to a franchise model under the management of local, independent merchants. Rema 1000 employs more than 16,000 colleagues in Denmark. Rema 1000 Denmark is part of the Nordic and Baltic retail group Reitan Retail.
See here for more: Presse | REMA 1000
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