If you do a lot of grocery shopping, odds are you have stepped foot in an ALDI store. This grocery chain giant has exploded in popularity over recent years by pursuing an aggressive expansion campaign across the U.S. Considering its massive growth, ALDI stock would be a great addition to any portfolio.
The German-owned grocery currently has over 2,000 stores in the U.S. alone and operates locations in Denmark, France, Portugal, Spain, and more.
ALDI is now the 9th largest grocer in the United States, even bigger than Amazon-owned Whole Foods.
Given that ALDI records almost $100 billion in revenue each year, you are probably wondering how you can invest in the company.
So we put together this comprehensive guide on ALDI stock and how you can invest in the company as well as its competitors.
Can You Buy ALDI Stock?
First, we should clarify that ALDI is actually two companies. ALDI Nord and ALDI Sud were both founded in the 1960s by the brothers Karl and Theo Albrecht. Karl owns Nord, while Theo owns Sud.
So can you buy ALDI stocks? The short answer is no, but you can invest in its competitors (more on that later).
ALDI Nord and ALDI Sud: A Tale of Two Companies
The two companies (ALDI Nord and Sud) are legally distinct entities and are registered separately.
Nonetheless, they operate under the same brand name, frequently work together, and share an international website.
The two companies also have different presences in the U.S. ALDI Nord owns Trader Joe’s, among other ventures, and ALDI Sud owns ALDI grocery stores.
So when people talk about investing in ALDI, they normally mean investing in one of the two companies.
Unfortunately, neither ALDI Nord nor ALDI Sud are publicly traded companies. This means that you cannot buy and sell their shares on a stock exchange.
ALDI Stock: Why ALDI Doesn’t Want to be Publicly Traded
Not buying or selling shares is both a benefit and disadvantage for the company. On the one hand, keeping private control allows the Albrecht family to run the business the way they want.
If ALDI was publicly traded, then shareholders could pressure the owners into practices that might be good for short-term profit but not for long-term sustainability.
However, selling shares gives businesses capital so they can expand projects and locations.
ALDI Stock Price
Since ALDI does not sell stocks, they do not have a ticker symbol, and they do not have a share price. You cannot buy or sell ALDI stocks so it is difficult to speculate how much shares of the company would be worth if they existed.
ALDI Sees Massive Success without the stock market
Remaining privately-owned is working incredibly well for ALDI. When taken together, ALDI Nord and Sud are collectively the largest privately held companies in the world.
Their total revenue is over $60 billion per year, which is substantially higher than most other privately held corporations like Lego, IKEA, or State Farm.
However, unless you are a member of the Albrecht family, you won’t see any of those profits. The Albrecht family is known for their privacy, so not much is known about their personal lives.
But experts estimate their net worth is around $53 billion so you can imagine how ALDI shares might be worth.
Who Owns ALDI?
ALDI Nord and ALDI Sud started off as a local grocery store run by Theo and Karl’s mother that was opened in 1913.
After WWII, the fraternal duo took over their mother’s business and by 1950, had opened 13 additional locations in Eastern Germany.
The business was characterized by ruthless efficiency, with the brothers cutting anything from the shelves that did not sell completely. Locations were also kept small to reduce operating costs.
In 1960, the company split in two due to a disagreement between the brothers over whether to sell cigarettes.
In 1962, the Albrecht grocery store chain changed its name to ALDI, and the two companies, ALDI Nord and ALDI Sud, were legally incorporated in 1966. Although the companies were separate, the brothers jointly managed operations.
In the 1970s, ALDI began expanding internationally and started opening stores in countries other than Germany. In 1976, ALDI Sud opened its first US location in Iowa, and in 1979, ALDI Nord bought Trader Joe’s.
After the fall of the Soviet Union and the reunification of West and East Germany, ALDI experienced rapid expansion to the present day.
ALDI Stock: Digging Deeper into the Company’s History
Theo and Karl Albrecht were known for being very reclusive in their later years.
Part of their seclusionary nature was because Theo Albrecht was kidnapped and held ransom for 17 days in 1977. Very little is known of the brother’s private lives from the 80s until the present.
Theo passed away in 2010 and Karl shortly after in 2014. Ownership of both companies passed to their respective heirs.
The two companies are currently owned and operated by parent organization ALDI Einkauf GmbH & Co. OHG, a subsidiary of the Siepmann Foundation, a private family foundation set up by Karl Albrecht.
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Theo’s heirs were his two sons Berthold and Theo Jr while Karl’s heirs were son and daughter Karl Jr. and Beate.
Can You Invest in ALDI Stock? Will There Be an ALDI IPO?
To the dismay of many investors, ALDI is still completely under the private control of the Albrecht family and has no plans to go public.
So you won’t find an ALDI listing on the stock market any time soon.
It is crystal clear that the Albrecht family has no desire to sell shares of the company, and ALDI seems to pull in enough money as is without the funds from selling shares.
How Does ALDI Make So Much Money?
Although ALDI is a privately owned company, it still puts out ridiculously high revenue numbers.
The primary reason for its success is that ALDI keeps operating costs extremely low. They have smaller stores and overall sell fewer brands and products than larger grocery chains.
With smaller stores, ALDI has to spend less on rent, power, maintenance, etc. Trader Joe’s locations owned by ALDI Nord operate under a similar logic.
ALDI also tends to have a “no-frills” simple design for their stores, with very little decoration or advertising.
ALDI maintains an efficient inventory
ALDI is very selective about what products it sells and keeps in stock.
If a product is not selling well, they will remove it from the shelves rather than advertise and try to get it sold.
Most of the items offered in the stores are ALDI brand products, although some locations may offer other more popular brands.
Exploding in popularity
ALDI sells a lot of products because they have gotten extremely popular. Despite the discount prices, ALDI-brand products are high quality and taste great.
The company has won many awards for food quality and they sell organic and gluten-free products. The high-quality food and low prices have made ALDI very popular in the US, particularly in the Midwest and California.
The ALDI brand has an intensely loyal following and ALDI has recently partnered with Instacart, which further reduces ALDI costs.
ALDI Competitors to Invest In
Unfortunately, you cannot invest in ALDI because the company is privately owned and plans to remain so for the foreseeable future.
However, there are several competitor grocery store chains worth investing in that are listed on the stock market.
Kroger (NYSE: KR)
Kroger is one of the oldest and most well-known grocery chains in the country, so it makes sense why so many savvy investors own shares in the company.
Kroger Co. has a current market cap of $29 billion, and the company has an average annual revenue of $121.1 billion as of 2019.
Kroger owns over 2,700 locations in 35 states and operates 45 distribution centers, 1,500 fuel centers, and more.
Currently, Kroger is working with the Ocado Group to build automated warehouses for packing and shipping orders to customers.
These Customer Fulfilment Centers (CFC) are going to be placed in some of the country’s largest cities including Chicago, Atalanta, Dallas, and Washington D.C.
Kroger Co. itself also owns several smaller niche brands located around the US, including Fred Meyer, King Soopers, Harris Teeter, and Fry’s in addition to their thousands of Kroger-brand stores.
The company is also growing rapidly. Kroger’s revenues grew by an average of 10% in 2020 and reduced their long-term debt by over $1 billion.
Kroger is also a strong dividends stock because the company has a high cash flow. In 2020, the average quarterly annual dividend was 45 cents per share.
Costco (NASDAQ: COST)
Costco is another well-known American discount store. Costco is focused on bulk purchases, which is how they manage such low prices per unit.
Costco requires customers to have a membership to shop there and over 100 million people had a Costco membership in 2020. Costco also operates a no-frill storefront and focuses on a hyper-efficient selling strategy.
Costco also does not spend on traditional advertising and only sends ads to its members.
This business model has attracted a highly loyal customer base. The company had an annual revenue growth rate of 16% through 2020 and generated more than $150 billion in net sales.
Costco is also known for being a great dividend stock. The company had a dividend yield of 0.79% as of this past February.
Let’s take a look at Walmart next.
Walmart (NYSE: WMT)
Walmart is the single largest retailer in the world and has over 11,000 stores worldwide. The company also owns and operates all Sam’s Club locations.
Walmart is the largest grocery store chain by volume in the world and the company has managed to show increasing profits year over year for the past 5 years.
As of Q4 2020, Walmart has an annual growth rate of 5.25% and the company generated nearly $4 billion cash flow during the same quarter.
Moreover, Walmart has a relatively low stock price compared to its staying power.
Walmart’s online sales have almost doubled in the past year, and the company is looking to expand its operations through eCommerc Distribution Centers.
For any investors interested, the current price for Walmart stocks is $144 per share.
Can You Invest in ALDI Stock?: Conclusion
ALDI is one of the most well-known grocery chains in the country and for good reason. The company’s low operating costs, high-quality food, and consumer-friendly practices have made it a very popular chain.
Unfortunately, you cannot invest in ALDI because the company is privately owned by the Albrecht family and its heirs.
It is a shame too because a company like ALDI could perform incredibly well if it were publicly traded on the stock market. However, the privately-owned nature of ALDI is one reason why it is unique.
Either way, there are plenty of other grocery chains to invest in besides ALDI, so you still have some solid investing options.
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