The Evolution of Aldi's Operations in The U.S. | In Practise

The Evolution of Aldi's Operations in The U.S.

Former Division EVP at Aldi SUD

Learning outcomes

  • How Aldi’s proposition in North America has evolved since the 1980s
  • The pillars of Aldi’s customer value proposition in the US market and how this has evolved
  • How Aldi’s approach to site selection and marketing has evolved over the history of its presence in the US
  • Aldi’s management principles

Executive profile

Mike Jessen

Former Division EVP at Aldi SUD

Mike spent 28 years at ALDI in North America, over 20 of which as Division Executive Vice President. Over his career at Aldi he held various leadership roles in real estate, operations and strategy. Since leaving Aldi in 2014 Mike has held a number of senior advisory roles for brands such as Kroger and Save-A-Lot.Read more

Mike, could you begin by sharing a little bit of context on your involvement with Aldi and its operations in the United States?

I started with Aldi in 1986, right out of university. In the Aldi world, in the US, that’s where they find their future leaders and management talent. I started as a district manager trainee, and was in that role for about two and a half years. I was promoted to the position of director of real estate, in 1989. That position involves identifying places to build Aldi stores, markets to go into, involvement with overseeing the construction of all these stores and, basically, getting the store to a point where we could turn it over, successfully, to the operations team.

From my perspective, I enjoyed real estate, which is a fascinating part of the business. The decisions you make in real estate have impact for, hopefully, 20, 30, 40 years, if you do it right. But when I was asked, in 1990, to take a lateral transfer to being director of store operations, that’s where I felt my skill set was strongest. I enjoyed working intimately with the Aldi employees and customers, so it was a quick decision to get back into the operational day-to-day, out in the store operations.

I was in that role for about two and a half years and then was promoted to what was called general manager, at the time – the title now is vice president – of the soon to open, Valparaiso, Indiana division; that was in 1992. As the vice president of the division, I had the five different director positions reporting to me, that we involved with all the different aspects of the business. I served in that role from 1992 to 2014. A total career, with Aldi, of 28 terrific years, with 22 years as the vice president of the Valparaiso division, building that market, developing the strategies, basically, for Northern Indiana and the South City and South West suburbs of the Chicago market.

Upon joining the business, what struck you about the way it was operated?

As a college student, like many soon to graduate college students, I wasn’t quite sure what direction I would take, upon graduation. But in 1986, I went to a small university; I had heard of this company that I had never heard of before, but I knew Aldi was coming to campus. They were looking for district manager trainees, which appeared to be a more than just an entry-level type role. I investigated the Aldi company and, at that time, I knew that the company had started in 1976 and had about 160 stores throughout four or five states.

The Aldi company would have a presentation the night before the interview and I signed up for the interview, primarily because I knew it had strong leadership potential included within the role. Through my very limited research, I felt that the concept of Aldi made a lot of sense. To be truthful, it was certainly the highest paying position offered for someone coming out of college. That also caught my attention. At the dinner presentation the night before the interview, the vice president came in and told the Aldi story and talked, specifically, about what a district manager does and I found out more about it.

The concept itself made perfect sense to me. It is a limited assortment of items; it had an incredibly low cost, but did not sacrifice the quality of the product to achieve those low prices. It cut and peeled away the unnecessary costs to the business and, basically, offered high quality products at prices that were 50% to 60% lower than any other traditional grocery store. It offered young people a great opportunity to develop their leadership skills and be rewarded as a result of it. I had grocery experience from my high school and college summers, so I knew the grocery business but had no idea that would be the path I would take, upon graduation. Primarily, that’s because I didn’t know about this potential leadership opportunity. But I believed in the concept, believed in the personalized approach they took in explaining that model to the potential candidates.

There were 160 stores in the US and I tried to imagine how many stores there could be, throughout the country. I felt the potential for the company to grow and prosper was unlimited. Also, for a young person, who was really striving for a leadership role, that it would be an opportunity for me to thrive in. I interviewed, on campus, the next day. That went very well and, subsequently, I took my first airplane trip down to one of their divisional offices, near St Louis and found out much more about the company. Although I had never been to an Aldi store, until that visit, I believed in it. I think it was that belief that brought me to Aldi, back in 1986, and what has kept me passionate about the company and what they have done, over the course of time.

The business is now around the 2,000 store mark, since those early days and your arrival at the business. Could you talk to us about the response and perceptions of Aldi, in the grocery market, and the relationship between Aldi and its competitors, the various incumbents across the United States?

The growth has certainly been tremendous. They are at the 2,000 store mark today, which is quite a feat. I know, by the end of 2022, based on store count, with the current growth plan, they will be the third largest retailer in the US, behind Walmart, which is number one, and then Kroger, which is number two. That’s a pretty tremendous achievement, to have 2,000 stores in 35 plus states.

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The Evolution of Aldi's Business in North America

September 30, 2020

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