under pressure

Aldi Nord boss steps down amid major overhaul at discounter

Twofer: Aldi encapsulates two rivaling brands. Source: DPA

There’s a leadership shakeup at Aldi Nord, even as the discounter gets a flashy makeover thanks to a multi-billion-euro injection.

Marc Heussinger, boss of Aldi Nord, stepped down last week under pressure to hit targets and catch up with Aldi Süd and Lidl, rival discount grocery chains.

Although Aldi is known throughout Europe and the US, it’s actually two different retailers in Germany after a family spat: Aldi Nord and Aldi Süd. The former is larger in Germany, but owns Trader Joe’s in the US; Aldi Süd has more stores abroad, including Aldi-branded shops in America.

The split is historic: The Albrecht brothers Theo and Karl inherited a bakery from their father after World War Two and turned it into two separate chains in the 1960s, divided along geographical lines between the German North and South, nicknamed the “Aldi equator”. The two Aldis have been legally and financially separate entities ever since. Aldi stands for Albrecht Discount (Diskont in German).

More recently, managers of the two discounters have tried to overcome these divisions, with initiatives to market products together, especially since Theo Albrecht’s death in 2010. But when it comes to targets, Aldi Süd is still a rival for Aldi Nord, which has struggled amid fierce competition in the low-cost grocery market.

02 p6 Aldi on Three Continents-01

Aldi Nord is also in the middle of a major overhaul, with €5.2 billion invested into a brand-new headquarters in Essen, plus a face-lift for its 2,250 outlets in Germany, and then a further 2,400 in Europe. That move is years overdue: Aldi Nord long reacted too late to trends and failed to put enough money into its branches.

The company was quick to reassure staff and investors that it is still fully operational in the hands of Torsten Hufnagel, deputy to Mr. Heussinger and expected to succeed him. A spokesperson for Aldi said he had resigned due to pressure to modernize faster.

Mr. Heussinger had other problems too, such as the hesitation in extending his contract from the foundation that owns Aldi. Insiders said this contributed to his decision to move on. Others argue that it was the pressure of Mr. Hufnagel’s speedy ascent that weighed on him.

Aldi Nord also lagged behind its rivals in a GfK survey earlier this year, and its revenue dropped 0.2 percent for the first half, while Aldi Süd’s increased by 3.3 percent and Lidl’s by 6.8 percent.

The foundation is set to officially name Mr. Hufnagel as successor since there are few alternative candidates. He knows Aldi Nord well and the company is expected to privilege such experience ahead of possible newcomers.

His plate will be full, as any manager taking the post would also have to navigate the complex relations of the Aldi descendants who man the foundations that steer the business. Though these appear to be more harmonious than in the past, the new boss will still have a to-do list spanning the move into a new HQ and potentially expanding team from 400 to 800. That, in turn, implies Aldi Nord may see further growth.

Florian Kolf covers retail for Handelsblatt and Georg Weishaupt writes about companies and markets. To contact the authors: f.kolf@handelsblattgroup.com and weishaupt@handelsblatt.com

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