Karl Hans Albrecht is the eleventh richest billionaire in the world and also the richest person in Germany, with a net worth close to $27 billion USD. Theodor Paul Albrecht, in turn, is the eighteenth richest billionaire in the world with a net worth racking up to $23 billion USD, who also lives in Germany. The two are brothers, who together co-own the ALDI discount supermarket chain, and Theo additionally owns the Trader Joe's specialty grocery market chain.
Karl Albrecht was born February 20, 1920, and Theo Albrecht was born March 28, 1922, both in Essen, Germany. Their father was a miner and later worked as a baker, while their mother ran a small grocery store in a suburb of Essen. While Theo completed an apprenticeship in their mother's store, Karl worked in a delicatessen and later served in the German army during World War II, before joining the family business. The two brother took over their mother's business in 1946, at some point giving it the "ALDI" name, which originally stood for "ALbrecht DIscount".
By 1950, the brothers had expanded the store into 13 chain locations in the Ruhr Valley of Germany. The success of the stores were due to the brother's thriftiness. They would regularly prune their inventory to eliminate low-selling items, decided against stocking fresh fruit because of the cost of maintaining it, and if they had a product that offered a rebate, they'd collect the rebate themselves and offer the product at the lower price rather than making the customer go through this process. They also skimped on paid advertising and ran their stores from the smallest amount of floor space possible.
In 1960, with over 300 stores now in the chain, Karl and Theo Albrecht split the company between them, partly over concerns over what inventory items to stock, but mostly this was a friendly move to give each of them room to expand. The two branches became "Aldi Nord" and "Aldi Süd", north and south belonging to Theo and Karl, respectively. The two halves of the business quite literally drew a line across Germany and split the territory between them.
Going into international expansion, the Aldi store chain today operates about 7,600 locations worldwide. North Aldi is running the stores in Belgium, the Netherlands, Luxembourg, France, Spain, Portugal and Denmark. South Aldi is running the stores in Austria, the United Kingdom, Ireland, the United States, Australia, Switzerland and Slovenia. Both branches of the store chain continue to expand into more countries today, at what is said to be the rate of a new location opening somewhere in the world every week. Germany, with 2,400 stores, has the highest share of stores, while the United States has one of the lowest shares with only about 818.
Management of the stores today continues to follow the thrifty and efficient philosophy of the two brothers. Stores are always located in purpose-built distinctive buildings. The layout is kept consistent, so that even a shopper who travels abroad can go into an Aldi located in any country and find all of the products in the same place. Traditionally, only one or two brands of a product is offered, to allow a wider range of products to be carried in a smaller amount of space. Other cost-cutting measures are charging for shopping bags, requiring a coin deposit for carts, and in most cases not accepting credit cards because of the retailer surcharge upon collection.
The Trader Joe's market chain, which was founded by Joe Coulombe in Pasadena, California, USA in 1958, was bought by Theo Albrecht in 1979. Theo left the chain of stores largely unchanged from how they were, and only expanded them throughout the United States. Trader Joe's has a similar philosophy to Aldi's, in that they each only offer a few brands of each product, have small store layouts, and don't advertise very much. The Trader Joe's markets, however, focus very specifically on only carrying products that other stores do not carry, frequently doing so under their own brand name. This is to meet the needs of consumers who are tired of "the usual" and want something different. This strategy is an amazing success in the United States, and Trader Joe's has built up a very loyal following from customers who can only find certain niche products at the Trader Joe's chain.
Karl and Theo Albrecht have since basically sold out of the business, each of them retiring and donating most of their fortunes to charity. They remain reclusive and withdrawn to this day, in part because of the famous kidnapping of Theo Albrecht in 1971. Theo was released after payment of the ransom of 7 million DM, and the kidnappers were quickly apprehended by the police. Theo Albrecht, while unharmed, was nevertheless shaken by the ordeal.
The brothers Albrecht have demonstrated unique smarts in running their grocery chain and building their business empire. The Aldi's retail chain may be seen as another Walmart. Like Walmart, Aldi is another story of home-made success.