Aldi has long been a highly secretive, private companySource: Supplied
THE inner sanctum of German supermarket discounter Aldi has always been impossible to penetrate — from the reclusive billionaire Albrecht family who control the global Aldi network with its annual sales of $70 billion to its store managers, they never divulge the secrets of their massive success.
A former high-ranking executive of Aldi in Britain has been offering his insights, for a fee, and has found particularly fertile ground in Australia, where local fund managers and institutional investors have dialled in to a number of briefings recently to gain crucial market intelligence on Aldi’s plans for Australia — and just as importantly the threat to publicly listed Woolworths, Coles and Metcash.
Conducted by a local retail analyst for his clients over the past six months, select Australian fund managers have been privy to high-level insider intelligence about Aldi and how it views the $90bn Australian supermarket and grocery sector.
The former Aldi executive told Australian investors that within Aldi’s headquarters in Germany Australia was viewed as a “premium zone” for the chain and one of the most profitable of nearly two dozen nations it operates in.
Aldi is chasing a target of 500 stores in Australia within the next few years, up from its store count of 367, believing this will give it critical mass in the region to seriously challenge established market heavyweights Woolworths and Coles.
The insider intelligence provided a valuable source of information for local investors, many of whom have shares in Woolworths or Wesfarmers, the owners of Coles, and were therefore anxious to glean as much information as possible on Aldi’s strategic plans for Australia and the potential impact on the earnings of listed supermarket competitors.
It is believed the former Aldi executive was not in Australia, but had dialled in to a conference call from Britain.
Lasting for a number of hours, local fund managers and institutional investors were able to extensively question the Aldi executive on how the German discounter might further expand in Australia, its profit margins and other strategic goals.
Since arriving in Australia in 2001, Aldi has quickly expanded to capture 10 per cent of the grocery market on the eastern seaboard and recently unveiled a $700 million investment plan to expand into Western Australia and South Australia, where it could open as many as 130 stores.
It has stripped customers from market leaders Woolworths and Coles, as well as from independent supermarkets supplied by Metcash, and poses one of the biggest threats to the established chains. But insight into Aldi’s operations had always been near impossible to discover given the highly secretive nature of the private company and its reclusive owners, the Albrecht family.
And it is only now, after the former Aldi executive decided to sell his insider knowledge, that investors in retail competitors can get their first glimpse inside the Aldi empire.
Held via a phone hook-up with Australian fund managers and led by the retail analyst, whom The Australian has chosen not to name, the former Aldi executive is understood to be represented by a New York firm called Gerson Lehrman Group, which describes itself as “the world’s largest membership network for one-on-one professional learning”.
The biggest “expert-network firm” in the US, Gerson Lehrman has a reputation for offering executives who can dish up information about former employers to competitors and investors.
In 2010, Gerson Lehrman was reportedly dragged into a US government insider-trading investigation after one of its paid experts, an executive in the technology sector, provided information about the tech industry to a hedge fund whose offices were later raided by FBI agents.
Gerson Lehrman sets up meetings and calls with current and former executives from a list of hundreds of companies.