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Aldi was started as a small family-owned grocery store by Mrs Albrecht in Essen, Germany in 1913. Two sons, Karl and Theo, took over the store in 1946 and soon began expansion. They emphasized low costs from the very beginning and thereby provided very low price for customers relative to competitors. Over time. Aldo expanded to other European countries and it entered the United States market in 1976. Currently, Aldi has 8,500 stores with 1,400 of those in the United States. It operates stores in 18 countries and it has stores in 36 states in the US Its annual sales revenues in the US were approximately 570 million in 2016, Aldi holds its costs down in a variety of ways. It largely sells its own The 'no-frills' grocery store brand-label products in "no-frills" stores. The company limits the number of external brands it sells (usually one or two per product), and it has low packaging, transportation and employee costs. The products are sold in stores similar to warehouse stores - on pallets and boxed in cut-a-way cardboard boxes. In Germany, Aldi advertises very little, but it does advertise in the United States. It produces its own ads in-house (no external agency) and advertises mostly through newspaper inserts and a few television commercials Aldi and another discount store, Lidl, have hurt the largest four supermarkets in the UK market - Tesco. Walmart's Asda. Sainsbury and Morrison Supermarkets. Aldi and Lidl have stolen market share from these retailers, especially Tesco and Morrison, and now have about 8.6 percent of the market. And, they are targeting about 17 percent share of the market within the next five years. Tesco has controlled about 30 percent of the discount supermarket market but it has been declining. Morrison's recent poor performance has precipitated turnover in most of the top executives at the firm. In addition, the new CEO. David Potts, has been malinn min the 100% AUSSIE FRESH MEAT EGGS MILE largely cutting costs in order to compete on prices. As a result of reduced costs, Morrison cut its prices on 130 staple items such as milk and eggs. Likewise. Tesco reduced the prices of 380 of its brand products by about 25 percent . Yet, Aldi is emboldened by its gain in market share and plans to invest about $900 million to open 550 stores in Britain by 2022 Aldi is having similar effects on Australian market. It has gained market share from the two largest supermarkets in Australia - Coles and Woolworths. Woolworths has signalled its plan to reduce its prices to avoid being perceived as the "expensive option." This action does not seem to concern Aldi which has announced plans for a 5700 million expansion of 120-130 new stores by 2030 to add to its current number of 300 stores in Australia. Aldi appears to be harming some competition in the United States as well. For example, a rival discount food retailer, Bottom Dollar owned by Delhaize of Belgium, closed all its stores (New Jersey, Pennsylvania and Ohio) and sold the locations and leases to Aldi. Aldi does have stiffer competition in the US from Walmart's. Sam's (Walmart's warehouse stores), and Costco, among other discount food retailers. Yet, Aldi is still not only surviving but flourishing and growing in the US market as well. These supermarket wars caused by Aldi in the various markets are not only causing a ripple effect across country borders; the effects are also rippling to the wholesalers and other suppliers. For example, wholesale prices have been declining and some of the major supermarket chains, such as Tesco and Morrison, have been reducing the number of brands on their shelves. Interestingly, manufacturers of popular products, such as Mr Kipling cakes and Bistro gravy, stand to gain shelf space and increase sales as a result of rivals products being taken off the shelves. Of course, the suppliers whose products are eliminated will 17 New Products suffer. The bottom line is that Aldi is having a major effect on rivals in multe con many other U7 AUSSIE FRESH MEAT COGS ME Australian market. It has gained market share from the twol largest supermarkets in Australia Coles and Woolworths. Woolworths has signalled its plan to reduce its prices to avoid being perceived as the **expensive option." This action does not seem to concern Aldi which has announced plans for a 5700 million expansion of 120-130 new stores by 2030 to add to its current number of 300 stores in Australia. Aldi appears to be harming some competition in the United States as well. For example, a rival discount food retailer, Bottom Dollar owned by Delhaize of Belgium, closed all its stores (New Jersey, Pennsylvania and Ohio) and sold the locations and leases to Aldi. Aldi does have stiffer competition in the US from Walmart's, Sam's (Walmart's warehouse stores), and Costco, among other discount food retailers. Yet, Aldi is still not only surviving but flourishing and growing in the US market as well These supermarket wars caused by Aldi in the various markets are not only causing a ripple effect across country borders, the effects are also rippling to the wholesalers and other suppliers. For example, wholesale prices have been declining and some of the major supermarket chains, such as Tesco and Morrison, have been reducing the number of brands on their shelves. Interestingly. manufacturers of popular products, such as Mr Kipling cakes and Bistro gravy, stand to gain shelf space and increase sales as a result of rivals products being taken off the shelves. Of course, the suppliers whose products are eliminated will 17 New Products suffer. The bottom line is that Aldi is having a major effect on rivals in multiple countries and on many other companies that supply products to the industry. 1. How has Aldi's entry changed the competitive dynamics of the various markets in which it operates