Highly Secretive Aldi

The German-owned Aldi company was welcomed into Australia by the Coalition Government.  Their view was that this foreign-owned company could show the Australian-owned companies – Coles, Woolworths and IGA – just how retailing should be run in this country, hence lower prices, hardly any staff and only selling a small range of goods. Of course, the media publicity has almost been entirely positive on what a wonderful benefit to Australia Aldi is. 

As a businessman, I disagree.  I can not see one advantage – only disadvantage for Australian consumers.  If Aldi supplied a complete range of products like the major Australian supermarkets, it would be different.  Then there would be a real test as to their astuteness in being able to provide goods at a cheaper price.

But Aldi doesn’t do this.  Can you imagine if Coles and Woolworths decided to stock 1,000 only lines of the products they could make most profit from instead of their usual 30,000 plus lines?  Where would Australians get the other basic necessities from? 

Well may you ask.   I believe what has happened since Aldi has entered the marketplace is that overall Australians are now paying more for food.  Let me explain to you the reason for my belief.

Despite Aldi coming to Australia, Australians are not eating more food per capita (let’s hope not anyway – there are already too many of us who are obese).  So Aldi, in effect, will take market share from the existing retailers, but you will notice that the existing retailers – Coles, Woolworths and IGA – have not seen their profits fall in this time.  That is because they have simply raised the prices very slightly of the products that Aldi don’t sell. 

Of course, they have to do this because the only alternative would be sacking Australian workers – which is not acceptable – or reducing the returns to the millions of mum-and-dad shareholders who are the owners of these Australian companies, either directly or through their superannuation funds. 

So in effect what happens is that Aldi comes in, discounts a very small percentage of the lines that it can make the most profit from;  the other companies needing to make the same profits put up the prices of the items that Aldi don’t sell to give an adequate return.  In effect, we all pay more and that increase reflects in the extra wealth of the Aldi company.

Most importantly, Aldi is often described as a “highly secretive” company – why would they be highly secretive?  In Australia, the only organisations that are considered to be highly secretive (other than ASIO) are criminal organisations.

Now I don’t believe for a second that Aldi is a criminal organisation, but surely if you come to a country you accept the culture of that country.  So what is all the secrecy about?  Our culture in business is one of openness.  Imagine if Gerry Harvey or John Singleton or John Symonds decided to become “highly secretive”.  Aldi, it appears, is owned by one of the wealthiest men on earth, Mr Karl Albrecht.  He is worth over $20 billion!  Not only is this outrageously disgusting if it’s true, considering there is over a billion people starving in this world, why isn’t he known as a generous philanthropist?

My challenge to Aldi is simple.  Accept the Australian culture of openness and we will accept you.  Stock a full range and then do that at a cheaper price while employing an acceptable number of Australians.  Why do you need to create all the wealth in the hands of one person or in one trust?  Why not open your business to some Australian shareholding so we can share in your success.  That’s the Australian way.

Also, to Mr Albrecht – why not give some of your money away?  Or if you do so secretly, why not do it openly so you are a good example of capitalism?  In Australia we welcome people from all around the world, but we would prefer that you accept our open culture rather than your “highly secretive” one. 

The challenge is there for you, Aldi.  Let’s hope you will take it up.

So, Aldi – how can you do the right thing by Australians?

1.              Remove the secrecy – we are open people here

2.              Stock a full range of products so Australians can do all their shopping at your store and you do not have to bludge off our Australian-owned supermarkets to provide all the other necessities which you presently don’t stock.

3.              Get Mr Albrecht to come to Australia and tell us what his plans are for the Aldi business in Australia.  Explain to him that we are very open people here and we welcome people from overseas but we like them to fit in with our culture.

4.              Become listed on the Australian Stock Exchange to that ordinary Aussies can share in your success.

This article was sponsored by Dick Smith Foods - return to DSF website

Web design sydney by Neubreed