Retailing in Germany, one of the world's richest countries, is marked by a curious paradox. While the locals will happily shell out many thousands of marks to speed down the autobahn in a BMW or Mercedes, or to holiday in luxurious resorts, when it comes to the contents of their fridge they will hunt high and low for the cheapest price.

Of a Saturday morning, many a well-heeled German can be found rummaging through cardboard boxes and clambering over pallets at his or her local Aldi discount store in search of a bargain or two.

The German food giant, with its warehouse layout, rock-bottom prices and spartan range, has helped nurture a thrifty streak among native shoppers that has set the stage for Germany's retailing schizophrenia.

CULTURE SHOCK
For non-German shoppers used to gleaming aisles, perfectly presented ranges and a troop of supermarket staff ready to carry out their every whim, a trip to an Aldi store can be something of a shock.

Tins of catfood heaped into cardboard boxes sit beside bottles of beer similarly presented. Pensioners and young mothers vie for the last scraps of fruit and vegetables scattered in metal containers.

A bag-packing service is unheard of but amid the boxes of bockwurst and jam there's usually a special offer to be had, a pair of hedge clippers one week, some extra large tracksuit bottoms the next. As one analyst put it: "If you go into a grocery store in the UK and then you fly over to one in Germany you would think you were in a third world country."

But Ulrike Franke, a 32-year old mother of one, doesn't care about the shop design when she's on the hunt for a bargain.

"OK, the store isn't much to look at, but Aldi is great for things like nappies. There's no point in forking out a lot of cash for something that's going to be thrown away the moment it's used," she said.

In order to keep prices down, the family-run group, with estimated worldwide sales of 60 billion marks ($27.54bn), refuses to offer its patrons much of a choice. Each store stocks around 700 articles in comparison to an average of 10,000 sold by most supermarkets.

While a British customer might feel miffed at not being able to mull the benefits of brand x over brand y or z; Aldi customer Hermann Rieke is thrilled at the restricted range. "The lack of choice is great; it means less time arguing with the wife over what sort of brand to buy," gushed the 48-year-old mechanic as he loaded his car with groceries at an Aldi outlet on the outskirts of Frankfurt.

POST-WAR AUSTERITY
Appropriately enough, brothers Theo and Karl Albrecht opened their first Aldi grocery store in a west German city called Essen, which in German means eating or food, in 1946. The spartan layout, restricted range and frugal prices were a necessity of the post-war climate. But the brothers soon realised that all the customer really wanted was cheap food so they decided not to bother expanding the range or embellishing its layout.

More than any other nationality in western Europe, the Germans are obsessed with the price of their groceries. One in three use discounters for their weekly shop. Only 15 percent of French people use them exclusively.

RICHEST PEOPLE IN GERMANY
On the back of their pfennig-pinching concept, Theo, now 80 and Karl, 79, have become the richest people in Germany with an estimated fortune of around 41 billion marks ($18.90 billion).

Their aversion to publicity is notorious, all press queries are rebuffed and the last time either of them spoke in public was in 1953. Dieter Brandes, a board member of Aldi for 10 years, said this reticence was partly for business reasons, but Theo's kidnapping in 1971, for which a seven million mark ransom was paid, has also played a role.

"As far as they are concerned when you talk to the press the only ones that listen are the competition," said the 55-year-ld who left the group in 1985. "And they never flaunt their wealth, they're naturally thrifty. Theo and I would often have a plate of spaghetti for lunch in the staff canteen."

Brandes estimates that the secretive group has a yearly net profit of around 1.5 billion marks. And despite eschewing most forms of advertising, Aldi was the top brand in Germany last year, beating well-known favourites such as Coca Cola and Volkswagen.

Brandes dismisses the idea that the brothers would ever sell their vast empire. After all, Aldi's huge success would mean charging a high price, and that's something the Albrechts just don't do.
($1=2.158 Mark).
(C) Reuters Limited 2001.

Date article published: 01/03/2001

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