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Aldi Supermercados reappears in Spain

Teresa Sánchez

Aldi is back in the black. The German hard discount supermarket chain obtained net profit of 8.87 million euros in 2013, the last year for which its financial statements are published in the Mercantile Registry. That figure contrasts with 2012, when the company reported a loss of 242 million euros.

The Aldi Supermercados brand, the parent company of various companies in Spain which are unconsolidated and which operates as a holding company, attributed those severe losses to debt restructuring. Specifically, the company reported a loss of 250 million euros due to the cancellation of participation loans from various investees responsible for managing the supermarkets.

However, sharp losses led the subsidiaries in Spain to book negative equity and, in accordance with the law, become eligible for dissolution, which required the equity accounts to be rebalanced with new loans.

Aldi, which operates with a model which is very similar to that of another German company, Lidl, places a very strong focus on private labeling and currently has around 250 stores in Spain. To date, the company has focused strategically on Catalonia, where it has more than 50 stores, and along the Mediterranean coast.

However, it decided to change course and position itself also in central Spain, mainly in the Madrid region, where it already has around 25 stores. "Our plans for growth include opening a considerable number of stores in that region in the coming years", says the company.

Aldi, which first opened in Spain in 2002, inaugurated stores in the towns of Majadahonda and San Sebastián de los Reyes, and in the Vallecas neighborhood in September of last year. In November it opened a store on Capitán Haya Street in Madrid, another in the Las Tablas neighborhood, and two in the city of Móstoles, and 15 more are expected to be opened in 2015. According to company executives, the Law to Promote Commercial Activity in the Madrid Region allowed for those openings "to be expedited".

Another strategic region for the group is the Balearic Islands, especially considering the notable potential resulting from German tourism there. On 20 May, Aldi simultaneously opened 6 stores in Mallorca. These supermarkets, which have been financed entirely with own funds, have a total retail area spanning 7,000 square meters and more than 1,400 products, and are located in the towns of Palmanova, Magaluf, Inca, Marratxí and Palma de Mallorca.

In Catalonia, which continues to be the company's main market and the site of its headquarters, Aldi opened four more stores last year: three in the province of Girona (in the capital as well as in Figueras and Palamós) and one in the municipality of San Viçent dels Horts in Barcelona. Andalusia is also considered to be strategic, and the company recently inaugurated a supermarket in Seville and is refurbishing others.

Aldi has agreements with international, national and local suppliers (albeit to a smaller extent) and sells its own brands, such as Milsani, Unamat, Mildeen, and Tandil, among others. Globally, the company has close to 5,000 stores in nine countries. The competition has noticed Aldi's solid growth in Spain, and has been forced to react.

The clearest case is that of Lidl, which quickly announced its largest growth plan in Spain to date, with an investment of 200 million euros with a view to opening 40 stores over the course of the year, i.e. more than double last year's number. The company is also rolling out its tenth logistics platform in Spain, in the town of Alcalá de Henares in Madrid, and is working to set itself apart with a firm commitment to quality and fresh products.

Dia is following a similar strategy in view of the ground gained by its German rivals, and it acquired El Árbol Supermercados as well as 160 supermarkets from Eroski. The company also launched new chains, such as La Plaza, which is specialized in fresh products, the goal being to maintain its market position and share.

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24/05/2017