Aldi Nord, which also includes the Belgian and Dutch outlets, plunged into a loss in its home market for the first time ever. The substantial loss (“eight digits”) was caused by a disappointing turnover and heavy investment costs.
“A loss of at least ten million”
Aldi Nord is facing a crisis: according to German trade journal Lebensmittel Zeitung, the discounter has gone into the red for the first time in its home market. Last year, German profit (after taxes) was already halved to about 200 million euros. This year sees “ein zweistelliges Millionendefizit” (“an eight digit loss”), so a loss of at least ten million euros. Only the profits of foreign subsidiaries will help Aldi Nord to end the year on a (small) profit.
Turnover growth did not get further than 1 %, a far cry from the planned 3.5 to 4 % growth. At the same time, Aldi has heavy bills to pay for the thorough renovation of existing stores and the construction of new outlets. In 2017, Aldi Nord announced they would be injecting over five billion euros into the company up to 2020. Insiders say new CEO Torsten Hufnagel, who succeeded Marc Heussinger in late September, is convinced even more money is needed to bring the concern back onto the path of growth.
No jobs jeopardised
Meanwhile, Hufnagel is working on a radical restructuring of the company. He intends to give more autonomy and control to the foreign subsidiaries when it comes to service, marketing, sales and category management (including the composition of the product range). The purchasing centre will also be examined.
Many employees’ jobs will change in this process, but the CEO stresses that no jobs are in jeopardy: “This is not a savings plan but a growth plan.” To achieve that growth, Hufnagel mostly has his eye on countries beyond Germany: “If we want to grow, our strategy has to be directed more internationally.”
