German food discounter Aldi Nord is incurring heavy losses with losses due to sharply risings costs and is therefore cancelling major investment projects. Even the historic streamlining with Aldi Süd is scaled back.
Cost problem
According to the German Handelsblatt, Aldi Nord had a negative operating margin of 1.4 % last year, despite a sharp increase in sales. The discounter is reportedly struggling with a “huge cost problem”. In countries such as France and Denmark – where the chain has since thrown in the towel – the retailer is facing heavy losses. In Belgian stores, there is social unrest over increased workload.
Aldi Nord is intervening: CEO Torsten Hufnagel says he is now working on “the biggest restructuring in the company’s history”, to become more efficient. He is putting the brakes on cooperation with sister company Aldi Süd: the previously planned introduction of a joint IT system is being called off. This is surprising as the two companies have increasingly sought rapprochement in recent years, including streamlining their private brand offerings. In 2020, there were even rumours of an imminent mega-merger between the two rivals, but it did not come that far.
