Chapter 7 Chapter 6 The German Albrecht Brothers: Challenge the Poor at Wal-Mart

In July 2004, the United States "Forbes" magazine announced the latest annual wealth list, the top three are: Bill Gates, Warren Buffett and brothers Carl Albrecht.This ranking did not cause too much controversy, and as in previous years, Bill Gates and Warren Buffett still attracted most people's attention, and there were countless photos with the smiling faces of Bill Gates and Warren Buffett Appeared in thousands of magazines and newspapers around the world, the flashing spotlights almost blinded Bill Gates. Unlike the first two, people seem to have forgotten the existence of Albrecht, who is ranked third. If they don't read the introduction, people don't even know what this person does.And if you look through the "Forbes" wealth list in recent years, you can be surprised to find that: Albrecht appears on the list "on time" every year, especially in the past three years, you can always be among Bill Gates and Bill Gates. After Warren Buffett found his name.And those who are familiar with the wealth list can always find another person named Albrecht not far behind Karl Albrecht.

This is the famous richest brother in Germany: the Albrecht brothers, the founders of the famous German chain store Aldi (Aldi). In 2005, due to the slow recovery of the European economy and the increasing competition in the supermarket industry, the ranking of the Albrecht brothers declined. The elder brother Karl ranked eighth with 18.5 billion US dollars, and the younger brother Special Olympics ranked 8th with 15.5 billion US dollars. 20th, but they are still the well-deserved richest people in Germany.However, what is not commensurate with their status as the "richest man" is their super low-key - when Bill Gates or Warren Buffett is smiling and being interviewed in front of the camera, the two brothers may be in the yard of a thatched cottage in the countryside lawn mowing.It was discovered that the most recent interview with the brothers was in 1953, while the most recent newspaper with their photographs was published 16 years earlier.The only thing everyone knows is that their elder brother Carl is now 83 years old, and his younger brother Theo is also 81 years old.

In fact, Aldi, the chain store empire founded by the brothers, is a household name in Germany and even in Europe: In Germany, 75% of the 80 million Germans often shop at Aldi, and about 20 million of them are regular customers ; In Europe, Aldi already has a 3.5% market share, while Carrefour, Europe's largest retailer, only has 6.8%; even Wal-Mart, the world's largest company, has to list Aldi as its main competitor.When retail and consumer market expert Burt Flickinger warned that "one of Wal-Mart's weaknesses is that it doesn't realize what a formidable enemy Aldi is," Wal-Mart spokesman Bill Wilts was quick to respond. In response, he said: "Of course we realize that Aldi is a strong opponent." Because when Wal-Mart saw Aldi at its door, any avoidance and contempt were impossible.

No matter what the opponents say, the Albrecht brothers have been quietly doing their own business on German soil.Aldi is now divided into two major companies in the north and the south. The gradually internationalized Aldi Group in the south is under the control of his brother Karl. It owns 27 companies and has more than 2,300 supermarkets in Germany and other countries around the world: the west and south of Germany operate about There are 1,400 Aldi stores, more than 250 in the UK and Ireland, more than 570 in 21 states from the east coast of the United States to Kansas, and more than 240 Aldi in Austria, known locally as Hofer.The younger brother Special Olympics in the north currently operates more than 3,900 shopping malls in northern Germany.At present, the Aldi supermarket chain operated by the two brothers exceeds 6,000.

Although Germany has left too many bitter memories to the world in the past 100 years, we will remember after time has settled down: Although war lunatics like Hitler were born there, it is also the hometown of the writer Goethe. There are also many simple and kind-hearted people.Even from a certain point of view, the common and unique temperament of the Germans destined them to be a special nation; through the blue eyes of every German, you can see more perseverance and wisdom. This characteristic of the Germans is particularly prominent in the economic circles.For a long time, world manufacturing was almost equivalent to German manufacturing. As long as any product was marked "made in Germany", it was equivalent to a guarantee of quality.Therefore, despite the catastrophe of the war, a number of large enterprises representing Germany's advanced productive forces have sprung up rapidly on German land. The success of Siemens, Volkswagen, and Mercedes-Benz is the best interpretation of this characteristic of the Germans. Even today, these enterprises still represent the highest level in the world.

The successful Aldi is also a standard German version of the corporate specimen that grew up in such an environment. The Albrecht brothers were born in an ordinary miner's family in Germany.At that time, their father had to leave the mine because of silicosis, and went to work in a bakery with low income; as a last resort, their mother opened a small food store with an area of ​​35 square meters in the miners' residential area in their hometown of Eisen.This was 1913, before they were born. After graduating from middle school, the two brothers decided to change their family circumstances, and each entered other people's food stores as apprentices, hoping to inherit the family business.However, the Second World War interrupted their fledgling careers: both brothers were drafted into the Nazi army, Theo Albrecht went to Africa as an alternate soldier, Karl was sent to the Eastern Front as a regular soldier battlefield.

In 1946, Germany was defeated, and the brothers also returned to their hometown from the prisoner-of-war camp.They opened a grocery store in their hometown that is almost three times the size of their mother's. At that time, as Germany had just emerged from the troubles of the war, the living standards of the people were still quite poor, and all kinds of industries in the country were waiting to be promoted.In this case, the Albrecht brothers positioned their food store customers as poor consumers who were in urgent need of food and clothing-they sold butter at the lowest price on the market at that time, which was a great success , the brothers' business is booming day by day.However, the employees had to move the unsold large quantities of butter to the basement every night after closing, because the brothers were reluctant to spend money on refrigerators.

The branch soon opened near a large supermarket with many customers. The brothers simply gave up dealing in fresh food and focused on food that is not easy to deteriorate and easy to store in a short period of time.The discount store idea quickly proved to be a success, and chain stores sprung up in the industrial Ruhr area.By the end of the 1950s, there were more than 300 supermarket chains, and the annual turnover exceeded 100 million marks in a short period of time. After experiencing the rapid development in the early stage of entrepreneurship, Aldi encountered the first "bottleneck" of development.Aldi is popular with low-income families in Germany and foreign students because it has been using cheap "tricks".But as the saying goes, you get what you pay for, Aldi's only criterion is low price, while ignoring the pursuit of quality and other aspects, but the actual situation is that with the rapid development of the post-war German economy, people's lives are also undergoing changes. change.

The Albrecht brothers did not seem to notice this change. Both brothers stubbornly believed that as long as the price of the product was low enough, consumers would continue to be attracted to buy it.But the result is that for a long time, as long as the economic conditions are still good, Germans have become disdainful of shopping in Aldi chain stores, because people think that walking on the street with Aldi shopping bags is a kind of annoying thing. A shame. Fortunately, the Albrecht brothers discovered this mistake in time. In the 1990s, Aldi strengthened the quality control of the product through a series of measures such as adjusting the product structure and grade, and gradually changed the German brand. image in mind.

Nowadays, although the facade and decoration of the Aldi supermarket still inherit the customary frugality and simplicity, there are often luxurious BMWs and Mercedes-Benz cars parked outside the Aldi supermarket-now any consumer in Germany No one, not even the richest, would ever consider it a stigma to shop at Aldi. Now the quality of the products sold in Aldi Supermarket can withstand any test, because everyone knows that the quality of the products sold in Aldi Supermarket is guaranteed. , No need to state any reason, give a refund" quality assurance, the confidence is because Aldi is now very confident in the quality of the products it sells.

It is precisely because of the two sharp swords of low price and quality as weapons that Aldi has achieved rapid development in the subsequent development. In 2003, Aldi's chain tentacles had extended to 10 countries and regions, with more than 6,000 branches and annual sales of 37 billion U.S. dollars; , became the richest man in Germany with a total asset of $34 billion.According to the survey of relevant survey companies, Aldi brand has become the third largest brand in Germany after Siemens and Mercedes-Benz in terms of popularity in Germany. From a small grocery store to a chain empire with more than 6,000 branches, Aldi has gone through nearly half a century of post-war history in Germany and the ups and downs of the world economy, but the most important thing is , Aldi has gone through the difficult road of company growth. From a grocery store to a chain empire, what people see is not only a change in quantity, but also an accumulation of corporate culture. In Aldi, people can easily Discover many magic weapons to win. They are not necessarily shocking, but they are absolutely practical and unusual. A reporter from British Reuters described its characteristics after visiting Aldi: "If you enter a British grocery store and then fly to a German grocery store, you will think you are in the third world." The reason why a reporter said this is because all of Aldi's chain stores are almost simple and streamlined, and the more important reason is its ultra-low prices. Similar to Wal-Mart's business philosophy, in Aldi's business philosophy, low prices are also the first way of doing business, and compared with Wal-Mart, Aldi seems to insist on a more scavenger low price strategy. The name "Aldi" is composed of the surname Albrecht (Albrecht) and cheap (Discount). In Germany, the Aldi supermarket chain is called a "poor store" because of its The prices are so cheap that even the poorest people can buy them, which explains why the Aldi chain has thrived even in the worst economic times.There is a set of data like this: In 2002, due to the economic downturn in Germany, the sales and profits of many companies have shrunk, but Aldi's customers have increased by 20%, and sales have increased by 10%. Aldi has always insisted on such a "low price" strategy, which is of course related to its specific historical opportunity: because of the shortage of supplies after the war in Germany, people did not have much "spare money" to consume luxury goods, and buying cheap products seemed to be the only option , so Aldi had to choose the "poor man's shop"; but at the same time, an important reason why the brothers still stubbornly abide by this principle is because the brothers still clearly remember a sentence from their mother: "The more difficult people's lives are, The better our lives will be." This may seem a bit inhumane, but it truly illustrates a business principle. Germany is the land of $100,000 Mercedes-Benz cars, but it is also a land of dwindling wealth.In Germany, less than one-fifth of the population has a monthly disposable income of more than $375; in this country, even upper-middle-class families who can afford luxury cars are frugal in their daily expenses.Therefore, Aldi's target customers are low-income working class, residents without fixed income and retired elderly.And this will naturally be reflected in the price of the product: in Aldi, the price of a kilogram of flour is 1.8 yuan, a liter of pure apple juice is 3.5 yuan, a liter of boxed milk is 3 yuan, and a two-roll set is 36 yuan. Zhang's Kodak color roll is 18 yuan... This price is cheap even in Chinese supermarkets, not to mention that Germany's per capita income is 5-10 times that of Chinese urban residents, and such a price, even for the richest woman in Europe, For Johanna Quandt, who owns a 16.7 percent stake in BMW AG, it's equally alluring.Therefore, Mercedes-Benz and BMW are often parked at the entrance of Aldi in the "poor shop". Although the price is extremely low, due to the effective control of procurement costs, management costs, and logistics costs, Aldi has successfully kept costs to a minimum. Therefore, Aldi's profits are not low.According to statistics, among all 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 money, while its competitors sold at high prices but only made small profits. Well, it is inevitable that there will be an existential crisis! Corresponding to Wal-Mart’s 150,000 kinds of rich products, in Aldi, you can see no more than 750 kinds of goods at most, and the variety of goods supplied in the South Aldi supermarket chain is limited to 600. within species. These are two almost opposite development ideas.In Wal-Mart's view, what he wants to do is: provide consumers with as many choices as possible, so as to greatly increase the probability of consumers buying, so as to ensure that the market has the largest trading opportunities.But Aldi believes that he only needs to provide one choice, and all you can do is decide how much you want to buy! The origin of this interesting approach is as follows: when the company first started in the 1950s, only a small number of products could be provided on the supply list. In terms of the conditions at the time, everything was kept simple to ensure the next step of development. The Albrecht brothers planned to gradually enrich the product range.But it didn't, they recall, because we found that our retail sales went up by offering less variety, and it was much cheaper to do so than comparable food chains. Now, the average annual sales of a single commodity in the Aldi supermarket chain reaches 30 million euros, and the world's largest retailer Wal-Mart has only 1.5 million euros, which is only 1/20 of Aldi, and the latter's annual turnover is almost Aldi. 6 times. Another advantage of strictly controlling the number of varieties is that it is beneficial to control the quality of commodities, because the fewer the varieties of commodities, the fewer unqualified commodities may be; Procurement costs can be greatly reduced by expanding the procurement volume.The value of each contract signed by ALDI with suppliers is not less than 500,000 euros, and most of the contracts last for 10 years, so that the affordable purchase price can be maintained for a long time. For these reasons, Aldi's products are always in a state of rapid circulation, coupled with appropriate measures, contributed to Aldi's sales miracle.Some items sold out on the first day, according to Aldi employees.Also because of this reason, many small and medium-sized enterprises are very willing to become Aldi's production enterprises.There is a reprinted proverb circulating in Germany, which may be the best explanation for this situation: "Competing for Aldi's long-term supply contract is as difficult as winning the qualification for the Bundesliga, and it is more difficult to be abandoned by Aldi than to be abandoned." It's even worse when a wife betrays her." For a long time, Aldi has played the role of disruptor of modern business management theory. A reporter once wanted to uncover the mystery of this chain store empire, but after several contacts, he was told that he might face the embarrassing situation of having no place to interview, because Aldi is one of the few organizations in the world that does not have a public relations or news release agency At the same time, Aldi’s annual advertising investment only accounts for 0.3% of the total turnover, and it hardly does any corporate image advertisements; the supermarket only publishes an eight-fold "Aldi Information News" every week. Advertise the new cheap products that will be on the cabinet.Information newspapers are placed at the exit of the supermarket and are picked up by customers.In addition, a half-page catalog is published once a week in the local daily newspaper.If there is a slogan, it is to add a note after some products: This product is limited in quantity, so buy it quickly. Although Aldi operates in such a way that violates the concept of modern enterprise management, it has been greatly recognized in Germany.Whenever the product catalog is released in the early morning of the second day, in front of Aldi's seemingly "shabby" shopping hall, you can always see long queues of customers waiting to buy special items there.Now, Aldi's sales advantages are more reflected in some more expensive electrical appliances. For example, Aldi's personal computer sales rank first in the German computer market, and 60% of Germans buy from Aldi. In addition, it is the largest textile and clothing supplier in Germany. It is unimaginable for many companies to resolutely refrain from advertising and image advertising, but in Aldi's view, this is something that must be considered for consumers, because not advertising means that Aldi can save money. The lowered advertising costs are passed on to consumers, which further reduces commodity prices and actually contributes to the growth of commodity sales. Since it is necessary to provide consumers with goods at the lowest price, Aldi's ability to control the cost of goods is second to none compared to other companies.The cost of general goods includes three major parts: purchase cost, management cost, and logistics cost. In terms of procurement, Aldi adopts the method of bulk ordering.Aldi has a dedicated procurement company responsible for the company's orders.Purchasing personnel search the world for the cheapest overall cost.Once a suitable partner is found, Aldi tends to order for a long time.Due to Aldi's stable and huge purchase volume, suppliers can arrange production in a planned way and update equipment. The manufacturer basically does not need a sales department, and at the same time does not need to advertise, which saves expensive advertising costs, and the cost of the manufacturer can be reduced to The lowest, so that the supply price is more favorable.Even if there are some products that are not purchased for a long time, Aldi will purchase them in large quantities in units of whole vehicles.Although Aldi's price is very low, suppliers are still willing to do business with Aldi, because Aldi's payment is extremely fast, and the payment for the goods will be remitted to the supplier's account within a week after the product leaves the factory. Moreover, Aldi Never look for such and such excuses to deduct payment like other shopping malls, or find excuses to make suppliers pay various sponsorships.Therefore, Aldi has a good reputation with suppliers and can get preferential prices that other companies cannot get.Aldi’s supply is also fixed: bananas from Brazil, kiwis from New Zealand, cucumbers from the Netherlands, citrus from Spain, and brine mushrooms from China. In terms of management, Aldi's management methods have left peers and customers dumbfounded. The benefits of Aldi employees are the highest among the peers, 10%-20% higher than other companies on average. For example, those who work well will be allocated buses after being promoted to community managers; those who are promoted to department directors can have an annual salary of 20. Wanmark.This is not because the Albrecht brothers are particularly kind, but because Aldi employees must have skills that are different from other places-to be able to do all the work of Aldi, and at the same time know the market well. Prices of all items in the . Each chain store of Aldi generally only has two or three cash registers, employs only three or four business personnel, and the per capita service area exceeds 100 square meters, which fully taps the potential of employees.Everyone, including the store manager, holds several positions and has no fixed position, so they can be described as "all-rounders".When the business is busy, all staff gather at the cash register to check out, and take turns to tally goods and clean up waste packages when they are free. Until a few years ago, Aldi required cashiers to recite the price of every item in the chain because Aldi never had large barcode scanners or modern cash registers for cost-saving reasons. , every cashier is the best cash register.The upshot: Aldi cashiers are able to collect payments faster than other stores that use barcode scanners. Although the excessive wealth has made Aldi appear on the wealth list "on time" every year, compared with other companies on the 100 Rich List, Aldi has been expanding in an almost silent way.In Germany, its chain stores have reached more than 3,000, with an annual sales volume of 37 billion US dollars; even in the United States, where Wal-Mart is the old home, Aldi’s annual sales have reached 4.8 billion US dollars, and it plans to open 40 stores a year in the future. Branches, and expand the total number to 1,000 by 2010.New York retail and consumer goods industry consulting company "Strategic Resources Group" estimates that by 2010, Aldi will increase its share of the US retail market from 0.65% to 2%. Despite its achievements, Aldi has always maintained a low-key personality.Aldi does not set up stores in prosperous areas, but generally located near residential areas or on the edge of towns, where the rent is cheap, but at the same time there is sufficient passenger flow.The area of ​​Aldi's branches (including warehouses) is generally 4,000-6,000 square meters, with about 100 parking spaces.Aldi's storefronts are extremely simple, without luxurious decorations. Storefronts in various places are often in the same format, and even the location of the products is roughly the same.In this way, it is extremely simple and fast to open a branch, and the cost can be reduced to a minimum. In fact, Aldi's low-key traits are also a true portrayal of the character of the Albrecht brothers.So until now, people's understanding of the Albrecht brothers has only stayed in the situation of more than ten years ago.The reason why the Albrecht brothers have such characteristics is related to a special experience they had more than ten years ago. One day in 1971, his younger brother Theo was kidnapped on his way home, and was released 17 days later after paying a ransom of 7 million marks.Because of this incident, the wealth of the Albrecht brothers was exposed to the world. When people discovered the huge wealth owned by the two unknown brothers, some frugal stories related to them were also widely spread: It is said that when the kidnappers kidnapped Special Olympics, Special Olympics was only wearing a worn-out suit, so even the kidnappers did not believe that this was the target of the kidnapping, and asked Special Olympics to show his ID card for verification; The A's family proposed a high ransom of more than 10 million marks, but after bargaining with the kidnappers, the A's family insisted on discounting the ransom. This is the legendary Albrecht brothers. Although many of these things have not been studied, people can still see some clues from the current external image of Aldi.Aldi's headquarters building is unpretentious, the company's employees drive mid-to-low-end cars, and the executives never take first-class travel.Diet Brands, who served as a director of Aldi for ten years, recalled: "The topic of their brothers' conversation was limited to competition issues. They never showed off. Saving became a habit and they often ate pasta in the staff cafeteria." There are always various contradictory things in this world, but each thing has its reason for existence. Just like people describe that Wal-Mart is often associated with behemoths, Wal-Mart has a wide variety of products, and the spaciousness of Wal-Mart stores... It is a phenomenon that exists to the extreme; and Aldi, if Wal-Mart is an "elephant" , then Aldi can only be a "little mouse" at most. Its small store and single product all show its characteristics, but can the "mouse" defeat the "elephant" now? Always on the edge of the lowest price, Aldi must try its best to reduce costs and maximize profits in procurement, management and logistics.Although the Albrecht brothers have always wanted to build their own chain empire in a low-key manner, in fact, it is difficult for them to do that again.According to a report by McKinsey & Company, in some regions of Germany, Aldi's sales profit reaches 9.3%; while Doolittle LLP, a retail industry consulting firm in Chicago, believes that Aldi's profit margin is higher than that of Wal-Mart. When all the secrets are revealed to the world, Aldi becomes the focus of everyone's attention and discussion. The company's financial information must be announced regularly, and all business skills have been studied countless times...Under such circumstances, Aldi It is no longer mysterious, and its "cheap" skills are being imitated and copied more and more.According to the survey and statistics of relevant German institutions: In Germany, cheap chain stores like Aldi are very developed, among which there are dozens of large-scale institutions, such as Lidl, Prouss and Norma, etc., all in Germany. Has a high reputation.Among them, Liddell has even launched an open competition with Aldi in many fields. On the other hand, due to Aldi's long-term low price policy, and its own very high profits, this will inevitably lower the supplier's supply price, although most companies believe that dealing with Aldi is still profitable , but quite a few middlemen believe that their interests have been exploited; and due to the rapid expansion of Aldi, it has also led to the closure of tens of thousands of small stores every year.Under such circumstances, some suppliers joined forces to sue Aldi for the serious impact on their lives; even a company appeared in Germany to help other companies calculate the impact of Aldi's expansion on their companies. Loss. Compared with the competitive pressure encountered in China, Aldi has encountered greater pressure globally. Although it has extended its tentacles to Wal-Mart’s old base in North America, in Germany, Aldi has also suffered from Wal-Mart’s huge pressure. challenge. According to the report of the German "Der Spiegel" weekly, since mid-May 2004, Wal-Mart has launched a massive price offensive in Germany: Wal-Mart supermarkets all over the country (a total of 95) have launched "preferential programs" to attract people's hearts at the same time. , The price of some products was greatly reduced. For a while, consumers flocked to it, and some Wal-Mart supermarkets even saw a panic buying crowd that is rare in Germany. And Wal-Mart isn't trying to hide the provocative nature of its deals.On the flyer distributed in Dusseldorf, it bluntly typed such an aggressive headline: "Why do you have to buy these products from Aldi-ours are cheaper!" All of a sudden, there was a life-and-death struggle in the retail market in Germany: shortly after Wal-Mart cut prices, Aldi also launched a tit-for-tat price cut, which was even lower than Wal-Mart. shrink.Although relying on the huge strength accumulated in decades of development, Aldi can still face the competition calmly, but everyone understands that this is not just a simple price reduction battle, because behind Wal-Mart in Germany is Wal-Mart in the United States, which also has strong strength. And with the advent of globalization, the war between Wal-Mart and Aldi will come sooner or later.It can be expected that if there is a war between Aldi and Wal-Mart, it will be a protracted battle of life and death.Our mission is to hand over a sound company to the next generation.