Nobody cares about Germany

[Bartholomew Gallacher]

Since other countries got their own threads I thought one about Germany could be interesting as well.

So let's start with one of the most well known German companies visible in everybody's daily life in America, Australie, the UK and many other countries: Aldi.

Actually there are 2 Aldis, North and South since it were two brothers who founded that empire. What is visible as Aldi in the US is Aldi South, while Trader Joe's is totally owned by the owner of Aldi North. Also the original founders were quite stingy and really disliked showing in public, so the only photos of them for a long period were decades old.

So here's a German documentation about the Aldi family, where you can enable English subs.


Also this might be interesting: in 1997 Walmart entered the German market. 9 years later in 2006 they sold all assets and left defeated. Walmart tried to enter the market and failed, because it made the mistake many American companies do in foreign countries: not trying to understand the local habits and culture. It also underestimated the local estimated big chains like Aldi and Lidl, so there were heavy price wars back then.

 

[Bartholomew Gallacher]

The fiercest and eternal competitor of Aldi is Lidl. Lidl has roughly the same revenue both Aldis have combined, and spread out into the world as well. Aldi has about 4.000 stores in Germany, while Lidl around 3.250.

In the UK Lidl is already an established brand and well known direct competitor toTesco. But cheaper many times. It spread out into many countries of Europe.

In America Lidl has maybe 5% of the stores Aldi has right now, so still much room to grow. Question is if Lidl still wants to grow, or is going to pull out sooner or later. German business magazine Handelsblatt recently had an article that Lidl made too many mistakes in America at the start, its making losses and the number of stores is not growing as expected. Mistakes made are bad choice of locations, too big administration and too high rents.

If Lidl wants to deliver on discount rebates, it needs to be big to get them on procurement. But in America it is still tiny compared to Aldi. Aldi wants to open 225 new stores alone this year in America; it took Lidl 8 years to get the current 187.

So either Lidl needs to change its approach and really go all-in, or needs to pull out in America in the opinion of the author.

Lidl is similar to Aldi in terms of layout and store concept, but belongs only to one owner - Dieter Schwarz, who still is alive at age 85. The first store under the name LIDL opened in 1973 in Germany. Aldi started its discount store empire in 1961. The roots of the company are much older. Schwarz is the wealthiest German with a net worth of around 40 bn. US dollar. (BTW Schwarz is just German for the color black.)

Schwarz is also quite a ghost to the public, he normally denies interview requests, there a no videos of him and few, old photos around.

The umbrella company of all activities, under which Lidl is one of five branches, is named Schwarz-Gruppe (Schwarz Group). Schwarz Group had a revenue of 175.4 bn. Euro in 2024, of which Lidl contributed 132.1 bn. Euros. The 2nd biggest branch is a type of discount super store named Kaufland.

One of the newest developments is the new branch Schwarz Digits, which should compete with Amazon AWS as cloud service provider and has about 7500 employees at the moment.

Again a documentation about Lidl and its roots in German with automatic subs available.


This was how one of the first stores in America was introduced to the public by CNBC.

 

[Veritable Quandry]

We have a fair number of discount chains in the US already, with Aldi as groceries and WalMart as a one-stop retailer. We have even lower price-quality stores like Dollar General and Dollar Tree that specialize in low income neighborhoods. It is a tough market to break in to unless, as you suggest, they want to spend heavily on locations and logistics to complete. Trader Joes has a unique niche that allowed them to come in without going directly against the major chains.

 

[Bartholomew Gallacher]

Yup that's true. Lidl though likes to compete with Aldi everywhere they go first and the other way around, so we're going to see if they are going to really try to grow more in America again, or not.

Sometimes in Germany Aldi is having hefty price wars with Lidl for a certain period of time.

 

[Sid]

We have a fair number of discount chains in the US already, with Aldi as groceries and WalMart as a one-stop retailer. We have even lower price-quality stores like Dollar General and Dollar Tree that specialize in low income neighborhoods. It is a tough market to break in to unless, as you suggest, they want to spend heavily on locations and logistics to complete. Trader Joes has a unique niche that allowed them to come in without going directly against the major chains.

Aldi Nord is Trader Joe and Aldi Süd is Aldi in the USA.
Lidl has a very good price-quality ratio, I think it will succeed in the USA just like it does in parts of Western Europe.

 

[Veritable Quandry]

The majority owners of Aldi Nord own Trader Joe's, but they operate independently and have very different product lines. Trader Joe's is best known for frozen meals (lots of good Mediterranean and Indian foods) and discount beer and wine. They really don't have many direct competitors. Like Aldi Nord they have a lot of own brand products but they are not sern as a discount chain, although I get their stout for $7 that is as good as a lot of $10-12 microbrews.

 

[Soen Eber]

Aldi's gives their cashier's chairs, how cool is that?

 

[Essence Lumin]

The majority owners of Aldi Nord own Trader Joe's, but they operate independently and have very different product lines. Trader Joe's is best known for frozen meals (lots of good Mediterranean and Indian foods) and discount beer and wine. They really don't have many direct competitors. Like Aldi Nord they have a lot of own brand products but they are not sern as a discount chain, although I get their stout for $7 that is as good as a lot of $10-12 microbrews.

Yes, Trader Joe's is definitely not a discount chain in my eyes. They are more of an expensive chain like whole foods. You can't really do all your grocery shopping there. There are lots of things they don't have. But if you want good frozen foods they are the place. You can't do all of your shopping at Aldi's either but what they have is cheap.

 

[Noodles]

Everytime I see "Lidl" I feel like someone was juat trying to write "Aldi" backwards.

 

[Casey Pelous]

I do not believe I have ever purchased a frozen meal at Trader Joe's. Clearly, I have missed a major point!

I did find the three --- now four -- buck Chuck, though!*


* Four-dollar per 750 ml bottle wine from the (completely fictitious) "Charles Shaw" winery. Used to be three dollars. Heck, used to be two!

 

[Katheryne Helendale]

* Four-dollar per 750 ml bottle wine from the (completely fictitious) "Charles Shaw" winery. Used to be three dollars. Heck, used to be two!

I got royally drunk on s bottle of three-buck chuck once, and have referred to it as the three-buck upchuck ever since.

 

[Casey Pelous]

I got royally drunk on s bottle of three-buck chuck once, and have referred to it as the three-buck upchuck ever since.

Ah, you must have had the Chateau Chunder or perhaps a Hobart Muddy.

"...Chateau Chunder", which is an Appelachian controle, specially grown for those keen on regurgitation -- a fine wine which really opens up the sluices at both ends.
Real emetic fans will also go for a "Hobart Muddy", and a prize winning "Cuiver Reserve Chateau Bottled Nuit San Wogga Wogga", which has a bouquet like an aborigine's armpit."

- Python

 

[detrius]

Aldi's gives their cashier's chairs, how cool is that?

That's normal.

 

[detrius]

Also this might be interesting: in 1997 Walmart entered the German market. 9 years later in 2006 they sold all assets and left defeated. Walmart tried to enter the market and failed, because it made the mistake many American companies do in foreign countries: not trying to understand the local habits and culture. It also underestimated the local estimated big chains like Aldi and Lidl, so there were heavy price wars back then.

They also broke the law, which is kinda big if you want to do business in another country.

Those pesky regulations have been a hindrance to the aspirations of many international entrepreneurs - not just Walmart, but also the Russian mob, professional assassins, Donald Trump, Mexican drug cartels and so on.

 

[Bartholomew Gallacher]

Everytime I see "Lidl" I feel like someone was juat trying to write "Aldi" backwards.

Well the store from which Dieter Schwarz build his empire upon was named "Lidl & Cie. Südfrüchtenhandlung", so Lidl and Company Southern Fruits Trade. Lidl is a short version of Ludwig by the way, English version is Louis or Lewis.

When he opened his first discount store he went against naming it after his own surename, because Schwarz-Markt literally means black market in German. And he thought naming his store like that would be a real bad idea.

So he remembered the roots and took the old name instead, paid a retired art teacher named Ludwig Lidl 1000 Deutsche Mark for the rights to use his name and thus Lidl as brand identity was born.

As plus on top of that it's not longer than Aldi.

 

[Noodles]

If Lidl is a short version of Ludwig, does that mean that dude's name was essentially "Ludwig Ludwig?"

 

[Bartholomew Gallacher]

Bingo Noodles! Ludwig means by the way "famous in battle" or "famous warrior."

 

[Bartholomew Gallacher]

Let's move on to some other big companies. From 1947 to 1995 there was one national post organisation in Germany, the Deutsche Bundespost. The Bundespost was stately owned, and did what many national post organisations did to that time: letter/parcel delivery, communications, so running the national phone lines and running a bank institute.

In 1989 the Bundespost was split into 3 entities: one for mail/parcel business, one for communications and one for the financial business.

In 1995 then the IPO happened, and the companies were privatised.

The mail and parcel business was named Deutsche Post AG (DPAG), the communications business Deutsche Telekom AG and the bank business Postbank AG.

The German state today still holds about 16.99% of the shares on DPAG, the rest is diverse shareholders. Deutsche Telekom AG is 67.7% in private hands of diverse shareholders, about 27.8% still belonging to the German state.

Deutsche Post AG acquired in 2002 total ownership of DHL. So internationally it is now known as DHL Group, it only still uses Deutsche Post in the domestic market. DPAG today is one of the big players in the international logistics market.

DHL Group logo

Deutsche Telekom AG of course is also doing cell phone networks. The name of its subsidiary for that is T-Mobile in all active countries except Germany.

One old iteration of the Telekom logo.

T-Mobile logo.

Postbank was acquired by a private bank, and was merged within it.

Since Telekom is known for its notoriously bad customer support in Germany there are many debasing nicknames around, like Teuerkom (teuer means expensive), Terrorkom, Teledumm (dumm = dumb) or Teledoof (doof = silly) or Telekotz (kotzen as verb means puking).

 

[Sid]

DHL was often called ding-dong-ditchers in the Netherlands in their early years.
Nowadays their delivery service is a lot more reliable

 

[Bartholomew Gallacher]

Well DHL's reputation in Germany at least is being one of the better parcel delivery services. Many do held them in high regards, the rest... not so much. UPS is an exception, but then again UPS is normally chosen for express delivery not so much standard shipments.