Germany: Aldi performance
Updated: Oct 19, 2020
How is the discounter Aldi doing in Germany according to its recently published 2018 balance sheets? Some figures are impressive. The comparison of the two sister companies Aldi Nord and Aldi Süd brings the following result.
The turnover at Aldi Süd Germany with 1,900 stores was €14.7 billion (US$17.3 Bn), so €7.74 mio (US$9.1 mio)per store per year, at Aldi Nord Germany with 2,212 stores at €11.8 billion (US$13.4 Bn), so €5.4 mio (US$6.4 mio) per store.
The sqm sales productivity is top at Aldi Süd and is almost €8,000 (US$9,400) at Aldi Nord this is more moderate at around €5,000 (US$5,900).
The personnel costs ratio is relatively similar. And the investments are not that different either. While Aldi Süd invested €363.4 mio (US$427.2 mio), Aldi Nord invested €344.1 mio (US$404.5 mio including the ANIKo facelifts). In the end the net income of Aldi Nord Germany was a loss of €45 million (US$52.9 mio, so -0.4%), the net results after taxes at Aldi Süd Germany was a profit of €157.8 million (US$ 185.5 mio, so +1.2%).
Discounter Aldi benefits from its real estate business and some foreign subsidiaries
Aldi Nord's operational business is in a serious crisis. In Germany and abroad (Belgium, Denmark, France, Luxemburg, Netherlands, Polands, Portugal und Spain) Aldi Nord is not doing good and under-performs compared to the national retail market growth and losing market share. The national operational businesses are making loses in all countries excluding Belgium&Luxemburg. Fortunately, there is the store and warehouse real estate business unit and US Trader Joe's. That helped Aldi Nord out of a jam realizing profits as a group. In 2018, 20 of the then 35 German regional Aldi distribution & sales companies were in red. The year before it were only seven. The discounter Aldi has of course reacted to this development. Several regional distribution center restructured and (will) close(d) in Germany, Netherlands and Denmark. The stores and employees are divided accordingly to the neighboring Aldi regions. Efficiency was and is highly required throughout the whole company reducing costs as the revenues are not growing enough. The situation at Aldi Nord has not really eased. And, as is well known, the competition never sleeps and still outperforms Aldi Nord.
The eternal battle between Aldi and Lidl
At Aldi it is worthwhile to take a more differentiated look. As a financial powerhouse, with enormous real estate ownership and financial equity resources, it remains struggling with its sales. Of course Aldi always has a look at arch-rival Lidl. At Aldi Nord Lidl is becoming more and more the benchmark as it is hiring managers and adopting its way of working.
A not so unusual step
In 2018, Aldi Nord's sales per store were only €5.4 million (US$ 6.4 mio). Lidl generated €6.8 million (US$8mio, with about €6,700 sales per sqm) and is thus sitting closer and closer to Aldi Süd. Nevertheless Aldi Nord and Süd together would create most efficiencies, using and expanding the full available potential of the market leader in German discount, Aldi Süd.