Aldi withdraws from Denmark

Dusseldorf The discounter Aldi Nord is withdrawing from the Danish market after years of losses. The retailer is selling a large part of the 188 stores in the Scandinavian country, and the rest are likely to be closed.

This is the first time that the discounter has given up a foreign market. Aldi has been in Denmark since 1977. It was the third foreign market after the Netherlands and Belgium.

So far, Aldi Nord has a total of 5,300 stores in nine European countries. Now the priorities have to be reset. Because the capital from the sale in Denmark is to be invested in growth markets.

Aldi has been making losses in Denmark for many years. In 2017, the company tried to reverse the trend by closing 32 stores, but that didn’t help either. Even high investments in the existing network and extensive advertising campaigns brought no improvement. Last year, the retailer had to accept a minus of 46 million euros with a turnover of the equivalent of 630 million euros.

Top jobs of the day

Find the best jobs now and
be notified by email.

Competitor Rema 1000 will take over 144 of the Aldi stores in Denmark. The new owner will also take over 1,600 of the 2,800 Aldi employees. In addition to the store staff, this also includes the employees of the logistics center in Kolding, to whom Rema will offer 1000 jobs in nearby Vejle and Horsens, as well as drivers from the three Danish logistics centers.

Aldi has invested billions in modernizing its stores

The agreement between Aldi and Rema 1000 is still subject to approval by the Danish competition authorities, which is expected in the coming months. The business operations of the stores are to be continued for the time being. It was agreed not to disclose the purchase price.

>> Read also: Aldi Süd is planning an online shop for fresh groceries

The withdrawal from Denmark is part of Aldi Nord’s new strategy in foreign markets, which should bring more profitability again. According to insiders, only the business in Belgium and the subsidiary Trades Joe’s in the USA are making high profits. The remaining markets only meet expectations to a limited extent.

In addition, business in the important home market has only recently been in the black again. Due to the higher sales during the pandemic, Aldi Nord was able to make a profit again in Germany in 2020. In the previous two years, Aldi Nord had posted losses.

This is all the more serious because the discounter has invested more than five billion euros in modernizing its stores in Germany and other European countries. However, the “Aniko” program (Aldi Nord in-store concept) did not bring the desired success. This is one of the reasons why Aldi Nord boss Marc Heussinger had to go in 2018 and make room for Thorsten Hufnagel.

Aldi expansion in Belgium, Poland and France

Now new priorities are to be set in foreign business in order to get the discounter back on track for sustainable growth. “The decision to sell the business in Denmark is the result of long-term transformation processes in the group of companies,” the company said. The successful business in Belgium is benefiting particularly from this.

Aldi Nord wants to expand in particular in the region around the Belgian capital, Brussels. The company wants to invest 35 million euros in new shops there. Aldi has just opened its 23rd store in Brussels.

The discounter also has high hopes for the growing Polish market. There he was able to increase sales by 20 percent last year, and 39 new branches were opened in 2021.

>> Read also: “Inflation is a huge opportunity for German discounters” – Lidl and Aldi are driving US expansion

The pace of growth in Poland is now to be further increased. As Wojciech Łubieński, head of the Polish Aldi subsidiary, announced, the company wants to increase the number of stores from the current 230 to 500 to 600. And his perspective by 2032 is already 1000 stores. He doesn’t even rule out a takeover.

In doing so, he would follow the example of his French sister. In France, Aldi Nord had not managed to stand up to its much more successful rival Lidl for years. Then came the liberation last year: Aldi took over around 500 branches and three central warehouses from French competitor Leader Price. This year, 100 new branches have been added, increasing the network in France to around 1,400 shops.

In view of these strategically important investments, the permanent losses in Denmark were no longer bearable. Aldi Nord announced that the company would “concentrate in future on the other eight European markets, which enable stronger growth and long-term development prospects”.

More: Why the private label boom is putting manufacturers under pressure

source site-12