Karl Albrecht, the reclusive German co-founder of Aldi, died last Wednesday (July 16) at the age of 94.
Karl, along with his late brother Theo, is credited with developing Aldi into the global discounter it is today.
Growing up in the north of the city of Essen, Karl learnt his craft from his parents who ran a cornershop in the city. It was that training that proved to be the basis for his future career and kick started his belief that everyone should be able to buy high-quality food and drinks at the lowest possible price.
During the Second World War, which saw both brothers serve in the German army, Essen was bombed almost beyond recognition, although their parents’ store managed to survive. The brothers took over their parents’ store and quickly built Aldi – an abbreviation of Albrecht Discount – into one of Gemany’s biggest retailers with a network of 300 stores by 1960.
Unlike other retailers at the time where staff handled products behind a counter, the stores operated on the principle of self-service and offered customers products that they could pick up.
This system proved to be cost-effective and, rather than raking in the profits, the brothers chose to pass on the savings to their customers through lower prices.
The brothers’ frugal nature is evident across any Aldi store - no swanky digital screens or self-service check-outs, rather pared back stores where customers can sometimes still pick products out of boxes. Checkout staff had to hand type product codes into their tills in Germany until the early 2000s as the firm didn’t want to splash out on expensive scanning systems.
“Our only consideration when we are working out a product’s price is how cheaply we can sell it,” Karl once said. It’s an ethos that remains to this day.
In the early 1960s, the brothers split the business in two after they disagreed over whether to sell cigarettes. Karl, who was worried the cigarettes would attract shoplifters, operated the company’s stores in the south (Aldi Sud) while Theo headed the north (Aldi Nord), based in north Germany.
Aldi said in a statement following Karl’s death: “Karl Albrecht developed a company culture based on mutual respect. He put his trust in his employees, had confidence in their talents and offered them the opportunity to realise their potential – not only for the benefit of the group but also for the satisfaction of his employees. He was a fair and reliable business person, a man who lived his convictions and Christian values and was a true role model.”
Karl was the second-richest person in Germany, with an estimated fortune of more than $20bn (£11.7bn). Despite his money, Karl was known as a recluse, preferring to avoid public attention and rejecting any honours awarded to him, instead pointing towards the successes achieved by his employees. He chose to live a modest life out of the limelight. “Our advertisement is the cheap price,” Karl said in a rare public statement. That was in 1953.
It is thought that the brothers’ reclusive nature became more pronounced in 1971 when Theo was kidnapped on his way home from work. His captors demanded a ransom of DM7m. Karl is said to have negotiated his brother’s release after 17 days.
Karl retired at the age of 75 from full-time work, but maintained a keen interest in the activities of the group.
Today Aldi has become a global multi-billion pound business that continues to steal market share from the big four grocers in the UK.
Karl Albrecht died in Essen, Germany, on July 16 and was buried in a private ceremony on Monday.