Showing posts from category: Commerce & Business
Hugo Boss, Gentlemen’s Outfitters to the German Nationalsozialistische Arbeiterpartei
Hugo Boss … luxury watches, fragrances, men’s suits and fashion wear and accessories, Nazi uniforms. Wait! Run that last one past me again? Yes, it’s true. Hugo Boss AG＊, that doyen of international fashion houses with annual revenue exceeding €2.7 billion (2018) and over 1,100 stores worldwide, provided the German Nazi Party, with their uniforms during (and prior to) the Third Reich. Although you wouldn’t know so from a perusal of the Hugo Boss website which keeps a firm lid on the company’s unsavoury past❂.
The clothing company was started in Metzingen (southern Germany) in 1924 by the eponymous Hugo (Ferdinand) Boss…it commenced supplying the NSDAP (National-Socialist Workers Party) with their brown military uniforms, according to the company’s own claim, in 1924 (the year in which Hugo Boss was founded)∅. Initially Boss designed and provided the standard Nazi brown-shirted outfits including Stürmabteilung (SA) uniforms, Nazi workwear, and Hitler Youth uniforms. In the Depression Boss’s company was like many, many businesses severely hit and Boss was forced into bankruptcy in 1931. That year was momentous for another reason, HF Boss joined the Nazi Party, an event that was to turn his fortunes round dramatically. At the same time the failed businessman also joined the SS (Schutzstaffel) as a “sponsoring member”.
By appointment to the Führer Membership of the party meant more contracts for Hugo Boss as a favoured supplier of Hitler. Under the Nazi dictatorship Boss’ sales grew from 38,260 RM in 1932 to 3,300,000 RM in 1941 (Timm). Boss’ motives for joining have been attributed to “economic opportunism” and its clear that he saw the business advantages of tying his colours to the Nazi flagship, but there’s equal little doubt that his commitment to the Nazi cause was heartfelt (a photo of him with the Führer was said to to be one of the tailor’s most prized possessions)❊ [‘Hugo Boss’ Secret Nazi History’, (Fashion and War), M2M, (video, YouTube)].
🔻A Boss ad placed in the SS newspaper
Nazi fashionistas From 1937 on, the relationship acquired an exclusivity, Hugo Boss made clothing only for the Nazis, including the black uniforms worn by the elite Nazi force, the SS (Boss didn’t design the uniforms worn by Himmler’s SS Corps, two party members unconnected to the company designed them). Boss continued to heavily advertise his fashions in the SS newspaper, Das Schwarze Korps, and fashionably chic the uniforms were! One of the pillars of the Nazis’ ideology was the pseudo-scientific belief in Aryan superiority, this involved showing the world what the “new man” looks like. There was no finer exemplar of this than the Wehrmacht military man, and this is where Boss provided the finishing touches. The firm’s stylish, sharply cut uniforms conveyed the desired outer appearance, the SS corporate identity that Hitler and the Nazis wanted to project to the world (Fashion and War).
HB as slave-labour drivers From 1940 Boss used slave labour at it’s Metzingen textile factory, predominantly comprising women and later supplemented by the infusion of Polish and French POWs. The company (sans it’s founder), after decades of dodging accusations, finally came clean about it’s shameful Nazi collaboration, after being pressured into issuing a mea culpa in 1997 for the gross mistreatment of the workers. Later the corporation commissioned a book on it’s dark past association❏ [‘“Hitler’s Tailor” Hugo Boss apologises for using slave labour to make Nazi uniforms’, (Lauren Paxman), Daily Mail, 24-Sep-2011, www.dailymail.co.uk].
(Source: www.militaryuniforms.net/Pinterest)
A discounted form of justice After the war Boss was tried along with other German collaborators by a regional Denazification tribunal. The man known as “Hitler’s Tailor” claimed in his defence that he only joined the Nazi Party to save his firm. The court found Boss to have been a “beneficiary of the system” and fined him 100,000 RM, made him sever all connexions with his own firm and stripped him of the right to vote, join a political party or professional organisation. However, on appeal, the fine was reduced by 75%, the other restrictions were lightened and his culpability was downgraded to ‘follower’ of the regime. Before the findings could be ratified by the French Military Government and the punishments imposed, Boss died in 1948 (Timm).
(Photo: Hutton-Deutsh Collection/Corbis/Getty Images)
Endnote: Supping with the 卐 devil Hugo Boss AG was far from the only company to profitably cohabitate with Hitler and the NSDAP. The list of big corporations doing mutually advantageous business was extensive, both within Germany and outside – including Volkswagen, Bayer, Coca-Cola, Nestlé, Kodak, Ford, General Motors, IBM, Siemens, Chase National Bank and Associated Press [‘Companies with Ties to Nazi Germany’, (Debra Kelly), Grunge, (Upd.17-Dec-2019), www.grunge.com].
┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷┷
＊ Aktiengesellschaft (German limited company)
❂ either that or trying to conceal or gloss over the inconvenient truth of the corporation’s history, eg, “in the 1930s it produced uniforms for various(sic) parties around the time of the world war”, www.bangandstrike.com
∅ the firm’s advertising in the 1930s stated that it was a “supplier of National Socialist uniforms since 1924”, however research suggest that this overstates by four years the length of Boss’ association with Hitler and the Nazis [Elisabeth Timm, ‘Hugo Ferdinand Boss (1885-1948) und die Firma Hugo Boss: Eine Dokumentation’, (Metzingen Zwangsarbeit – Forced Labour), MA Thesis, 1999]
❊ it was a ‘reunion’ of the two humble German corporals from World War I
❏ author Roman Koester wrote: “it’s clear that (Boss) did not just join the party out of economic calculation…he was a convinced Nazi” (Hugo Boss, 1924-1945. A Clothing Factory During the Weimar Republic and Third Reich)
Ewo and Taikoo: Two of the Legendary Free Market Hongs of British Hong Kong (The “Movers and Shakers”)
(Image: www.travelsfinder.com)
No organisation has left a larger footprint on Hong Kong‘s long colonial experience under the British (1841-1997) than the hongs (see Endnote). And one British hong that has been especially significant in shaping the course of British (and beyond) Hong Kong has been Jardine, Matheson. The company under the direction of Scots William Jardine and James Matheson arrived in Hong Kong on the ground floor, securing lot No. 1 on Hong Kong Island in the initial land sale by the British colonial administrators in 1841 [‘Jardine, Matheson – company history’, www.jardines.com].
⍗ Jardine’s original business premises on Causeway Bay
Jardine, Matheson Co Hong Kong replaced the firm’s previous base in Canton (Guangzhou). From Hong Kong (which soon become Jardine, Matheson’s headquarters) and from the startup of it’s Shànghâi operation a couple of years later, the company laid the foundations of it’s fortune initially from a highly profitable trade of smuggling opium (as well as tea, silk and cotton) into mainland China from South Asia. Jardine, Matheson quickly diversified into more ethical and legal enterprises, adding steamships to their portfolio from the 1850s (China Coast Steam Navigation Co, Indo-China Steam Navigation Co, Yangtśe Steam Navigation Co) which serviced the trade routes to Japan, Singapore, Calcutta, Manila and Vladivostok [‘Jardine, Matheson & Co. Steam Nav. Co / Indo-China Steam Nav. Co / Yangtse S.N. Co.’, www.theshipslist.com].
Taipan Wm Jardine ⍗
Jardine Matheson, a ubiquitous hong Over the years Jardine, Matheson (JM Co) continued to diversify—cotton mills, property, breweries, insurance, financiers (of the first railway in China), sugar plantations, etc. All the while extending it’s trade links – Europe, Africa, Australia, America. Later JM Co got into hotels, motor vehicles, food and hygiene product wholesaling and so on. They functioned as Far East agents – for gunmakers amongst other manufacturers. JM Co even acted in a para-government capacity for consuls for foreign powers doing business in the region, as did other hongs [Jan Morris, Hong Kong: Epilogue to an Empire, (2000)].
Hong Kong Island ⍗
Butterfield and Swire This particular British hong was something of a latecomer to Hong Kong compared to the pioneering Jardine, Matheson Co. The B&S trading house arrived on the Island in 1869. But Butterfield and Swire did not waste any time in developing into one of the most powerful players in the territory. The driving force behind the company was John Samuel Swire✱. Previously, Butterfield, Swire and his brother William, had started a shipping and trading business in Shanghai. The Swire hong’s road to riches was predicated, not on the illicit drug trade like JM Co, but on a combination of shipbuilding, sugar-refining, banking, insurance, mining, railroad building and other later entrepreneurial pursuits in the Far East, such as bottling Coca-Cola for Asia’s markets. Swire’s diverse subsidiaries have included the Taikoo Sugar Refinery, Taikoo Dockyard – which built mainly steamboats for the China Navigation Co, another Swire subsidiary. Since the 20th century another star in the business stable of the Swire Group☒ is the leading Asian airline Cathay Pacific. Early on Swire’s was also an agent for the Blue Funnel cruise ship line [Morris; ‘Butterfield and Swire’, (School of Oriental and African Studies, London University), The National Archives, http://discovery.nationalarchives.gov.uk].
Taipan JS Swire, “the Senior” ⍐
(Photo: www.industrialhistoryhk.org)
JS Swire’s leadership and business style was unequivocally ruthless and uncompromising, he was very much of the “take-no-prisoners”, old school of business. Under “The Senior” Swire, the company played a telling part in driving some of the other Hong Kong frontier merchants into eventual business oblivion – as happened with two pioneering hongs, Dent and Co and Russell and Co (Morris).
Jardine, Matheson v Swire/Ewo v Taikoo☒ Swire‘s great and enduring rival in Hong Kong (and in the East) has been JM Co. For both hongs in the formative years the main game was about buying and selling in China for the European market. As both firms added more business pursuits to their respective China Sea empires, they came more into competition with each other. Swire’s Quarry Bay Taikoo Dockyard and sugar refinery for instance was in stiff competition with Jardine’s Kowloon Whampoa dockyard and refinery [‘Taikoo Sugar Refinery’, Wikipedia, http://en.m.wikipedia.org].
⍗ SS Shuntien, built at Taikoo Docks 
Dynastic hongs with staying power The Jardine presence in Honk Kong and at the helm of the company continues to this day through the Keswick family, ancestors of founder William Jardine’s sister. In a similar vein, the Swire name retains a connection with the present Swire Group (current conglomerate chairman Barnaby Swire is a descendent of John Samuel Swire and there are other ‘Swires’ in the management hierarchy).
(Photo: www.hkland.com/)
1984 and beyond After several years of tortuous negotiations between the UK Thatcher government and China agreement was finally reached to hand over Hong Kong to Beijing in 1997. This left Swires and Jardines, two of the British hongs with most at stake, with the thorny issue of whether to stay in the erstwhile British colony or not under the hard-to-predict communists. Swires, who had earlier pulled its businesses out of China four year after the communist takeover (to later return), chose to keep its operational base in Hong Kong. Swires sought to work with the Chinese regime, entering into airline deals to give the PRC an interest in Cathay Pacific and secure a domestic foothold for itself. The Jardines conglomerate opted for a different strategy, choosing in 1984 to cut and run, switching its legal domicile from Hong Kong to Bermuda and delisting on the HK Stock Exchange in favour of London and Singapore. This move earned Jardines the ire of Beijing⇟. Even after the ink was dry on the hand-over decision, JM Co continue to lobby the British government hard (with Simon Keswick particularly vocal) to keep the territory out of Beijing’s clutches [Felix Patrikeeff, Mouldering Pearl: Hong Kong at the Crossroads, (1989)].
By the turn of the 21st century JM Co had regained ground from a successful drive into Southeast Asia markets and had once again firmly secured a beachhead on mainland China [‘A tale of two hongs’, The Economist, 30-Jun-2007, www.theeconomist.com ; ‘Jardine Matheson Returns to China’, The Economist, 02-Jul-2015, www.theeconomist.com].
Postscript: Tension between government and the merchant class Officially, Hong Kong was run during the British era by a succession of governors, appointed from Whitehall. However a fundamental difference in raison d’être existed between the governors and the taipans. The governors were about the Imperial interest of Britain, in practical terms they sought to raise sufficient revenue to fund the colony’s administration. The sole concern of the plutocrats, the merchants, was self-enrichment and their natural inclination was to resist all efforts of the governor to raise taxes…this made for a generally very rocky relationship between the Crown Colony’s two power blocks with antithetical interests (Morris).
Endnote: Hongs and taipans
The term ‘hong’ (major foreign trading houses based in Hong Kong to trade with China) derives apparently from the Chinese word cohong, used to describe the guilds of Chinese merchants operating Canton’s trade with the West prior to 1842 (the “Thirteen Factories” or Canton System). In British Hong Kong each hong was headed up by a taipan (or series of taipans) who was the top boss man in the trading company. The hongs employed native (Chinese) personnel, called compradors, who acted as local “go-betweens” to facilitate business for the firms.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
✱ “the Butterfield” in the partnership didn’t last long in Hong Kong with the autocratic Swire edging him into retirement within a short time ☒ both trading houses adopted Chinese business names: Ewo (JM Co) means ” State of happy harmony”; Taikoo (Swire) means “Great and ancient” ⇟ China already held a long-lingering grudge against JM Co … company principal William Jardine was one of the main advocates for Britain to take action against the Chinese Empire in retaliation for it closing down the lucrative opium trafficking trade (leading to the First Opium War)
Fred Harvey, Railway Hospitality Pioneer and Tourism Developer, and the Harvey House Network
¤ ¤ ¤
English born Fred Harvey learned the basics of good food service from a lowly station in a New York restaurant and later ran a successful cafe prior to the Civil War before entering the employ of the US railroads. Working first for the Hannibal and St Joseph Railroad and later others, Harvey was required to travel a great deal as a railroad agent. This gave him first-hand experience of how dismal railroad food and service was.
🔺 Frederick Henry Harvey (Photo: Wall Street Journal)
This was no secret to regular passengers, before Harvey came along, the railroads were serviced by local rough eateries or unscrupulous restaurant owners who would reheat the leftover dishes and serve them again as supposedly new to the next, unsuspecting train-load of hungry passengers. Some travellers wary of the dubious quality offered up, would bring their own ‘shoebox’ lunches of fried chicken and hard-boiled eggs but this didn’t prove a satisfactory alternative – after sitting in the train for a couple of days the food from home would quickly go off [‘Fred Harvey and the Harvey Girls: A Dollar, a Dream and a Dinner’, (John Koster) Historynet, www.historynet.com].
Business-savvy Harvey sensed there was a gap in the market and in 1876 he clinched a deal with the Atchison, Topeka and Santa Fe Railroad (AT&SF)ⓐ to open eating houses along the railroad. The start was modest, one small lunchroom in the Topeka (Kansas) depot of the railroad. But from these modest beginnings Harvey created a thriving railway hospitality concern and more. The prototype Harvey lunchroom has been described as “the progenitor of what (Americans) think of today as a diner” [Stephen Fried, quoted in ‘Tracing the Recipes of America’s First Restaurant Empire’, (Sara Bonisteel), Epicurious, 18-Jun-2013, www.epicurious.com].
🔺 Santa Fe railroad & Harvey hotels & dining stations
The beginnings of fast food
The key to Harvey’s success was quality of food and speed of delivery. Once the network of Harvey dining-rooms were established along the Santa Fe route, the operations were streamlined to work like clockwork…and they needed to. As the trains pulled into the stations Fred Harvey staff had 20, at most 30 minutes to feed 60 to 100 passengers. This required coordination between the train conductor and Harvey staff (to give the staff advanced warning of their impending arrival). To meet the short turnaround time, the waiting staff (“Harvey Girls”) utilised a unique signalling system, the waitress taking the order would send a signal to a second waitress, a cup turned upright on the saucer meant coffee, a cup facing down, tea. The second waitress could then immediately do that part of the order without having to wait for her colleague to return with the order [‘Watch the Cup, Please’, (Jann Bommerbach), True West, 04-Nov-2015, www.truewestmagazine.com].
🔻 Harvey’s El Tovar Hotel, Grand Canyon
No “mean cuisine”
Harvey Houses (as they eventually came to be known) were no “Greasy Joe’s”. From the start Harvey headhunted a star head chef from back east for his first restaurant. The chef prepared top-quality cuisine for AT&SF line passengers…the food was so good that travelling salesmen and other regular travellers chose the AT&SF on that basis over rival western railroads (Koster). They were getting quality food, fresh and affordable to the middle class traveller, served on spotless Blue China with white linen tablecloths [‘Classic Harvey House recipes’, 23-Feb-2019, CBS News, www.cbsnews.com/].
Value as well as quality for money
In 1888 Fred Harvey debuted the first Fred Harvey dining-car on the Chicago to Kansas City train service. The menu for the service illustrates what a bargain it was – for the middle class—for 75¢ passengers got a mains (choice of oysters, lobster, salmon roast beef or other meats) plus dessert—often prepared by world-class chefs (Koster).
🔺 Castãneda Hotel, Las Vegas, (the ‘other’ Las Vegas – in New Mexico): the first trackside Harvey House (Image: www.castanedahotel.com]
The Harvey dining empire
How extensive was the Harvey House network? At the onset Fred Harvey promises a depot restaurant every 100 miles between Kansas and California. At the Harvey high-point there was 25 Harvey hotels, 40 sit-down dining-rooms and 55 lunchrooms on the route (Koster), and the Harvey House concept was extended to other west-bound railroads. Harvey was a natural marketer coming up with advertising campaigns like “3,000 Miles of Hospitality” to promote tourism in the region [‘Fred Harvey—Branding the Southwest (Quality Fast Food)’, www.lib.nau.edu].
The Harvey girls’ uniform: looking a bit too similar to a WWI nurse’s outfit or something you might see in a nunnery! 🔻(Photo: Grand Canyon Railway and Hotel)
The Harvey Girls: Helping to civilise the “Wild West”
Because the male waiters employed by Harvey had a tendency toward drinking on the job and causing trouble in the houses, the entrepreneur in 1883 had the inspired idea of replacing them with single women (aged 18-30) shipped out from the East. The Harvey Girls (as they became known) were attired in demure, conservative feminine uniforms and required to not marry before they had completed six months of service. The women waitresses on the job set standards for cleanliness and decorum which had “a civilizing effect on the often rough customers in the territories” [‘Fred Harvey, the Harvey Houses, and the Harvey Girls’, https://abqlibrary.org/railroads/HarveyHouses]. Many Harvey Girls stayed in the West after their employment, often marrying their bachelor customers, earning the railroad restaurants the sobriquet of “Cupid on Rails”ⓑ.
Farm-to-table: “Meals by Fred Harvey”
Fred Harvey Co (FHC) entered into contracts with local purveyors to ensure fresh ingredients for his meals. Fred Harvey Co also went into the farming business itself,running it’s own dairy and cattle farms (‘Fred Harvey—Branding the Southwest (Quality Fast Food).
(Photo: www.railroadmemories.com)
Business diversification: Whisky, chocolates, gifts, etc.
With success and fame came more diversification. FHC eventually manufactured it’s own whisky, sold it’s own brand of chocolates, candy, ice cream, salad dressings, as well as take-home gifts and souvenirs to passengers. Harvey’s knack for marketing put the brand everywhere. FHC gave away cookbooks of Fred Harvey recipes (‘Branding the Southwest’). The Harvey Co, as part of the tourism package it was promoting, also entered the postcard publishing field…through the Detroit Publishing Co it produced the very popular Fred Harvey Arizona ‘Phototint’ series of cards [‘Fred Harvey (entrepreneur), The Full Wiki, www.the full wiki.org/].
🔺 Menu image from the Santa Fe dining-car (Source: www.lib.nau.edu)
Menu art of the Southwest
The railroad menus of FHC are an interesting sidelight of the company, delightfully quaint in their great diversity. Many celebrated in colourful imagery the beauty of the American Southwest or the pre-United States connexions to the region of colonial Spanish missionaries and Native American tribes (see below ‘Marketing an image of the Southwest’). The menu artwork was often of a high calibre, eg, William Deane Fausett’s humorous images. Menus like the company’s La Posada menu were instructional – including an US warplane ID chart for US servicemen using the AT&SF rail during WWII. There were menus for special occasions like Mother‘s Day and special menus for kids which doubled as clown masks (‘Branding the Southwest’).
Marketing an image of the Southwest
Fred Harvey invented a new hospitality service for railway passengers, but he also invented (and marketed) a particular image of the country’s Southwest for Americans. Harvey, together with the AT&SF Railroad, changed the perception of Americans, filling the vast unknown void of savage desert with a new, “compelling regional identity for the Great Southwest of northern New Mexico and Arizona”. The Harvey corporation “appropriated and marketed the cultures of Native Americans”ⓒ presenting them as “colourful, tamed native peoples”. Harvey to a lesser extent also did a inventive reconstruction of the cultural impact of Spanish colonial and early Anglo-Celtic settlers. Weigle suggests that FMC’s commercial innovations such as the Indian Detours program (affording railroad passengers the opportunity to visit local native communities, represented a kind of ‘Disneyfication’ of the region [Weigle, Marta. “From Desert to Disney World: The Santa Fe Railway and the Fred Harvey Company Display the Indian Southwest.” Journal of Anthropological Research, vol. 45, no. 1, 1989, pp. 115-137. JSTOR, www.jstor.org/stable/3630174. Accessed 12 Feb. 2020].
Endnote: Founder Fred died in 1901 but the business remained in the family until his grandson died in 1965. In 1968 FHC and Harvey Houses were purchased by Amfac, Inc. (an Hawaiian hospitality industry conglomerate).
🔻 Harvey House, Seligman, Ariz.
PostScript: FH Menu dishes
Not surprisingly the FHC menus included a noticeably Latino-Mexican flavour—including Bright Angel Mexican Salisbury Steak, Guacamole Monterey, Empanadas with Vanilla Sauce, Fried Chicken Castãneda and Albondigas Soup (‘Classic Harvey House recipes’).
▁______▁______▁▁______▁______▁▁______▁______▁▁______▁______▁
ⓐ the Santa Fe line ended at Needles in eastern California, where it connected with another railroad which completed the journey west to the Pacific
ⓑ it is estimated that of the approximately 100,000-plus Harvey Girls in the company’s history, perhaps as much as ⅕ of them stayed and settled down to married life in the West, ‘The Harvey Girls, a Slice of American History’, (updated 26-Apr-2012), www.hubpages.com
ⓒ Hopi, Navajo, Pueblo, Apache and other Southwestern tribes
Aldiland – from a Small-Town German Corner Store to World-wide Supermarket Discount Kings (Part II)
A few months ago Channel Five screened a documentary on the German supermarket giant (‘Inside Aldi: Britain’s Biggest Budget Supermarket’). The doco was laced liberally with interviews of Aldi senior managers, all waxing lyrical about their ‘enlightened’ employer and the company’s “win-win” virtues for everybody, which made the program feel uncomfortably like a commercial promotional video at times. Nonetheless, the doco did unearth an interesting back story, that of the supermarket emporium’s evolution and it’s founder-brothers who emerged out of the ruins of war-time Germany to steer their fledgling company to it’s eventual lofty perch as an much envied international discount supermarket chain.
🔺 an early Albrecht store displaying Karl’s name with plenty of Spirituosen (alcohol) and Lebensmittel (food) in the display windows (Photo: www.news.com.au)
The seed of Aldi as we know it today has it’s roots in Essen, Western Germany, in 1913. Anna Albrecht, the wife of a miner, started a small grocery store in the suburb of Schonnebeck as a sideline. After serving in the German Wehrmacht in WWII, Karl and Theo Albrecht, Anna’s sons, took over their mother’s business, which they initially named Albrecht KG. During the formative first years, Karl for a time operated some stores solo (under the name “Karl Albrecht Lebensmittel”).
The Albrecht brothers concentrated on the Ruhr area of Germany at first, and then expanded rapidly across West Germany over the next 15 years. By 1960 Albrecht KG had amassed 300 shops in the Bundesrepublik and had a yearly cash flow of DM90 million. A factor contributing to the Albrecht stores’ early popularity and success was it’s novel approach to tax rebates from purchases. Instead of following the business norm of making customers collect stamps before they qualified for the 3% rebate, the brothers subtracted the tax from the price before sale, a radical idea and an ingeniously simple one which undercut their rivals’ bottom price. Aldi, as it was soon to be known, was on it’s way to revolutionising the low-cost grocery trade.
🔻 Theo (L), Karl (R)
(Source: www.broadview.tv)
Sibling rivalry: Splitting of the ‘atom’ in two 1960 was a momentous year in the history of Aldi. The two brothers fell out, apparently over whether or not to sell cigarettes in Albrecht Discounts, and decided to divide the company into two separate entities➊. With a new, shorter, snappy name, ‘Aldi’, derived from the first two letters of their family name and the ‘Di’ from Diskont (Discounts), the company split into two – Aldi Nord (North) and Aldi Süd (South). At this time, as Aldi was an intra-West Germany operation only, the division was between the north (Theo’s domain) and the south (Karl’s domain) of the country. The geographical border separating Aldi Nord and Süd is known as the Aldi-Aquator (‘equator’). Aldi, after the schism, continued to grow, the brothers’ insistence on stocking only popular items, cut down inefficiencies and proved profitable.
🔺 Aldi’s first German store (in the “North sector”)
A store displaying both names, Albrecht and Aldi 🔻 (Photo: Getty)
By 1967 the first international growth steps were taken with the acquisition of Austrian grocer Hofer by Aldi South. As Aldi expanded elsewhere the arrangement between the brothers divied up the world thus (with a few later variations): Aldi South’s jurisdiction would entail Austria and the English-speaking countries, whereas Aldi North would operate in Germany and the rest of Europe. Netherlands followed in 1973, and in 1976 Aldi South made its first incursions into the US. The US became the only market penetrated by both arms of the Aldi empire when Aldi North acquired the US Trader Joe’s chain. Britain came into the Aldi South fold in 1990. Aldi South has been particularly aggressive in it’s drive for store expansion in both the US and Britain. The retailer has upward of 2,000 stores in 36 states across the US and in 2017 announced plans to add 900 more by 2022➋.
🔻 Trader Joe’s, Amherst, NY
Aldi found the highly-competitive (and crowded) UK grocery field initially hard to penetrate, coming up against well-established market leaders Tesco, Asda, Sainsbury’s and Morrisons. By the 2010s however it was making exponential inroads into the Brits’ grocery market…by October 2013 it had 300 stores and doubled that by 2016, with new stores opening at the rate of one a week! Aldi South’s stated goal is to reach the 1,000 mark by 2022. At this rate it is looming as a genuine threat to the above “Big Four” Supermarket chains.
🔻 Aldi Long Eaton store (int) in Derbyshire (Photo: www.nottinghampost.com) 
Aldi global expansion intensified after the collapse of the Eastern Bloc system in 1989 and has experienced rapid growth in the 21st century. Since the 1990s Aldi has moved into Australia, Belgium, Denmark, France, Hungary, Ireland, Portugal, Slovenia, Spain and Switzerland. In 2019 it made another market quantum leap, opening two pilot stores in Shanghai, China➌.
🔺 The Albrecht brothers‘ carve-up of the world map (Theo plays black, Karl orange)
Counting the combined Aldi stores operating in Germany by both Nord and Süd (about 4,100 stores), there are over 8,000 stores in Europe as a whole (more counting the Hofer chain). All up, the reach of the Aldi retail tentacle worldwide accounts for 10,000 to 12,000 stores, with revenue (2010) of €53 billion. An international supermarket success story with nary a blot on it’s copybook – with one exception. In 2008 Aldi South invested an estimated €800 million in Greece but after only two years operating, it had to pull the plug on it’s 38 stores in the ancient land of the Olympiad. Nothing substantial divulged as to motive (par for the course for Aldi), but apparently the Aldi board of management was frightened off by the “informal business practices” prevalent in Greece (transparently code for government/business corruption)➍.
🔺 Theo in 1971, following his misadventure (Photo: Getty)
Endnote: The saga of the reclusive co-founders (“the brothers frugal”) Theo and big brother Karl were never your stereotypical, über-rich CEOs, bobbing up everywhere, constantly in the media spotlight, being snapped for glossy mags gratuitously showing off their latest flashy, expensive car or girlfriend. That was not the brothers’ ‘bag’ – for in business and in personal lifestyles their thriftiness was legendary. But after 1971 the Albrechts’ customary muted behaviour reached a whole new level. That year, the brothers’ extraordinary wealth came back to haunt them➎. Theo was kidnapped at gunpoint and held hostage for seventeen days. The younger brother was released on the payment of a ransom – after Theo had haggled with his captors over the amount demanded! Theo later tried to claim the nearly US$3 million Aldi North had to fork out for his release as a tax deduction business expense! Theo’s ordeal profoundly affected both brothers, they became even more reclusive and secretive in their personal lives and movements (no interviews or public statements, hardly any photos of them together or separately after 1971 exist). Eternally vigilant thereafter, both brothers reportedly would drive home from work, separately, by different routes each day. The brothers Albrecht, having profoundly changed “German food culture and consumption mentality” forever, semi-retired to a remote island in the North Sea in their eighties to pursue the hobbies of golf, orchid-growing and collecting old typewriters (very old school typical of them).
🔺 Island of Föhr off the Holstein Coast, where the supermarket entrepreneur brothers beavered away on their personal hobbies during much of their twilight years (Photo: www.tourism.de)
∈ওওওওওওওওওওওওওওওওওওওওওওওওওওওওওওওও∋
➊ although the separation wasn’t legally finalised until 1966
➋ German supermarket retail discounter Lidl—a copycat competitor to Aldi utilising the Aldi business model as a lodestar to chart it’s own course to retail riches —followed its path into the US market in 2017
➌ with concessions made for Chinese consumer buying-preferences based on online testing via Alibaba’s Tmall
➍ no doubt to Aldi’s chagrin, Lidl stores in Greece by comparison are apparently thriving
➎ they were reputed to be the richest men in Germany
❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖
Articles and sites referred to:
‘The History of Aldi: The Tale of Two Corporations with the Same Name’, (Team S4RB), 13-Jun-2017, www.blog.s4rb.com
‘Inside ALDI’s first two pilot stores in China’, (10-Jun-2019), Shanghai’s.ist
‘Aldi founder became recluse after family kidnapping’, Albrecht obituary,
‘Aldi’, Wikipedia, http://en.m.Wikipedia.org
‘Aldi quits Greece’, German Retail Blog, 23-Jul-2010, www.german-retail-blog.com
‘Grocery chain Aldi to open another 900 stores in U.S.’, (Zlati Meyer), USA Today, 13-Jun-2017, www.usatoday.com
‘The Aldi Story – Karl and Theo Albrecht’, (2014 documentary), www.broadview.tv
‘Secrets of store success: Why Aldi is winning the retail battle’, (Alison Kirker), Sunday Post, 19-Feb-2018, www.sundaypost.com
Aldiland – from a Small-Town German Corner Store to World-wide Supermarket Discount Kings (Part I)
Anyone who’s ever walked into an Aldi supermarket would notice the difference from your established, big-name chain supermarket. For a start, in your mega-‘market you would expect to see palettes lying out the back in the loading dock, NOT on the aisle floors in the middle of the store. Perched on the Aldi palettes are groceries and other goods in their original cardboard boxes. Aldi has a small shop-fit budget, it doesn’t spend money on installing fancy shelving, it’s stores typify the “no frills store format”, which simply offers, as it’s advertising spiel announces, “Everyday low prices”. Minimalism is one of the standard Aldi store’s by-words. The checkout area tells a similar story. Shoppers line up their purchases on a long counter which gets shunted down to the cashier. The area of the till itself is small, minute even, the whole thing is streamlined for speed and ease of transacting. And you won’t find a cornucopia of either choice or types of products in Aldi’s.
The key to retail success Sticking to the basis is a large part of the Aldi formula. The supermarket stocks less than 2,000 items…compare this to your average Coles or Woolies supermarket which typically stocks upward of 40,000 items! Looking for some Foie de gras or that special Russian black caviar, no, you won’t find these here. Aldi’s product base resides on what they call Private brand items➀. Smaller concentration of staple products + purchase in high quantities = lower prices for the customers. Although that said, Aldi also offers up to the trolly-pushing punters what it calls “Weekly Special Offers”. Located in the middle aisles—what Aldi cutely calls its “Treasure Aisle” (get it?)—are a diverse range of merchandise, some of which might be in the luxury category, Alpine snow suits and hiking tents, tools for the house handy-person, electronics, European chocolates, right through to the more peculiarly exotic pet pampering products like dog sofas and cat caves➁. All of which are seriously cheap.
🔺 from “The Book of Aldi”
Aldi eschews the “nice shopping experience”, customer service is not great➂. The store’s mission, once the shoppers have made their selections, is to shuffle them through as rapidly as possible, hence the streamlined checkout. Shoppers are ‘encouraged‘ (by the scarcity of space) and the requirement to self-pack to quickly move their goods to the back bench to pack them. Aldi doesn’t have self-serve checkouts or ‘fast’ minimum-item lanes, so inevitably there are queues because of popularity…as a consequence sometimes patience and timing are supreme virtues.
When the last item has been taken from a carton on the palette, a shop assistant will simply replace it with a new carton. This is time-efficient, saving the store staff from having to constantly restock the shelves. And when it comes to personnel on the ground, Aldi certainly have leaner staffing structures than the “Coles-worths” and Tesco’s of this world. This has prompted claims that the German employer puts unrealistic time-pressures on the reduced number of store staff to move the palettes into their point-of-sale position and complete other store-related tasks. When the stores close at 8pm or whatever the local time applicable, the shop attendants and cashiers turn into cleaners and spend the next hour getting the store spotless. There have been allegations (denied by Aldi) that it makes staff in some regions arrive 15 minutes before start-time to check the stock level without being paid. And of course it’s widely known that Aldi have consistently been notoriously anti-union in its staffing management practices➃.
Aldi stores don’t include the extraneous auxiliary facilities regularly found in other larger mainstream supermarkets and hypermarkets—no in-store banking/ATM machines, cafes, photo booths, pharmacies, children’s rides, toilets, etc—Aldi’s view is these add to the store’s end-cost. Instead they concentrate on the singular task of delivering groceries and other household essentials.
Aldi’s control of it’s “own brand”—which makes up a whopping 90 to 95% of what it sells—is interesting. First there’s the design, it deliberately makes the packaging on its food items look much the same as the leading manufacturers’ equivalent brands. Next, it tries to replicate the taste of these popular brands. Then Aldi invents a brand name for the product which often sounds vaguely like the well-known brand. And it apparently works – even on luxury items. To take a UK example: Many British consumers who once shopped at the upmarket Sainsbury’s and Waitrose supermarkets have been enticed by Aldi’s “Specially-Selected” luxury items – and the reason is twofold, obviously price (much cheaper than Sainsbury’s), but also because they now feel they are getting a similar-quality product (retail expert Julie McColl, Glasgow Caledonian University). As well as a recent product expansion to include luxury treats for it’s shoppers, Aldi’s move into ‘fresh’, the fruit and veg lines, has broadened it’s appeal.
Another key to Aldi being so spectacularly successfully in the supermarket game is it’s relationship to suppliers. Because of their runaway retail success they have many primary producers and manufacturers lining up to do business with them, but Aldi is well-known for driving a hard bargain with suppliers (sort of a case of “my way or the highway”). They are also clever at judging what will be efficacious – by sourcing local suppliers and advertising in the UK they have softened the German outsider element and fostered an impression among British shoppers of the big discount ‘invader’ being home-based.
Dr McColl has also drawn attention to Aldi’s recently strategy of positioning some of its new stores in towns next door to the prestigious Marks and Spencer outlets. The appeal of this being that shoppers can easily flit between the two – and avail themselves to the best of both worlds, getting their luxury items at M&S and their basics at Aldi.
The above factors, outlined, are apparently the ‘secrets’ to Aldi’s stellar success and it’s ability to offer and maintain retail prices at rock bottom in markets across the world. In part II I will tell the story of Aldi’s rise from a single grocer’s store in provincial Germany to international retail empire, and of the two publicity-shy and increasingly reclusive brothers who spearheaded the company’s seemingly unstoppable growth and expansion.
✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑
➀ called Exclusive brands in US AldiLand
➁ pet furniture seems to be one of Aldi’s specialities
➂ or maybe I mean non-existent – staff are hard to catch, as they are usually flat out haring round the store trying to meet management’s daily schedules
➃ 200 Aldi store managers in the US filed charges against unfair labour practices (University of Huddersfield). Aldi operations in other countries have similarly been criticised for incidences where the store has adopted an authoritarian or heavy-handed line towards it’s staff
☤☤☤ ⌽ ☤☤☤
Articles, papers and sites referred to:
‘Aldi – “The No Frills Retailer”, (Peter Emsell, with contributions by Leigh Morland), Unpublished case study, University of Huddersfield (2011), www.eprints.hud.ac.uk
‘Secrets of store success: Why Aldi is winning the retail battle’, (Alison Kirker), The Sunday Post, 19-Feb-2018, www.sundaypost.com
‘Aldi’s secret for selling cheaper groceries than Wal-Mart or Trader Joe’, Business Insider, (Ashley Lutz), 09-Apr-2015, www.businessinsider.com
‘Aldi rebukes Dispatches Investigation, says it contains “selective information”‘, (Natalie Mortimer), The Drum, 10-Nov-2015, www.thedrum.com
Fortnum and Mason’s Retail Longevity: Once the Favourite Grocers of HRM and Other Assorted Royals
That fashionable mag Harper’s Bazaar recently compiled a list (the sort of thing they do) of 10 of the favourite places in London that good Queen Elizabeth likes to shop at. They are, in no particular order, Smythson❅ (luxury leather goods and stationery for the Royal quill); Hunter (Wellington boots that QEII likes to drag on for traversing her Scottish estates); Launer London (the Royal handbag – apparently she has 200 of them); Barbour (her coats – there’s just one particular type of coat that Liz has been faithful to for the entire duration of a Diamond Jubilee and then some!); Anello and Davide of Kensington (shoes); Fulton (umbrellas); John Lewis (haberdashery and household goods); Rigby and Peller (suppliers of the Queen’s lingerie for 59 years); Corgi Hosiery (no, not stockings for HRM’s favourite “pampered pooches”, but socks for the Royal feet); Dubonnet (Liz stocks up on gin and Dubonnet⊞ for her favourite cocktails).
A household name in British retail trading since the time of Queen Anne
But there is another London retailer whose royal connexion for sheer staying power puts all of these businesses in the shade. Fortnum and Mason have long held sway as the Royals’ grocer of choice, starting with the family matriarch Queen Victoria in the 1860s, through to (until recently) the present ‘shopaholic‘ monarch.
F&M, 1957 [Source: Getty image]
The company’s history goes back even further—to the year 1707. In that year tenant (and latent entrepreneur) William Fortnum and his landlord Hugh Mason formed what was to become a momentous business partnership. At that time Mason was already operating a small store in St James Market for two years. The new store at 181 Piccadilly was the start of a retail innings that has now stretched 312 years and counting. Over that epoch of time Fortnum and Mason or F&M can (and has listed) a commendable catalogue of achievements, including:
🔸 introduced the Scotch egg in 1738— proving to be a highly portable snack/meal, just right for long distance journeys—as were F&M’s famous hampers
🔸 functioned as an official post office as well as a retail store – from 1794 up to 1839 when Britain established the General Post Office (GPO)
🔸 Queen Victoria chose F&M as her exclusive purveyor to despatch supplies of food to Florence Nightingale’s soldier patients in her field hospitals in the Crimean War (1856)
🔸 in a deal with the American HJ Heinz company, F&M in its role as stockists of tinned goods, introduced the humble baked bean to the British Isles (1886)
🔸 helped to bring variety to the British tea palate by introducing a range of south Asian teas (Indian and Ceylonese) to Britain for the first time including a new “Royal Blend” in honour of Edward VII (1902)
🔸 sent food hampers to imprisoned suffragettes (who had smashed the windows of the Fortnum store in protest, demonstrating apparently that F&M could turn the other cheek) (1911)
🔸 more predictably, they also sent hampers to soldiers of the British Expeditionary Force in France and Flanders during WWI (1914)
🔸 one of the things F&M is most proud about is its role as a supplier of expeditions, it supplied George Mallory’s failed attempt to climb Mt Everest in 1924, as well as other expeditions in Africa. To extend the alpine theme, F&M in 1930 added a mini sky slope for promotional value to the Third floor of the Piccadilly store
21st century Fortnum, an era of belated expansion
In 2007 F&M celebrated its tercentenary with a long-overdue refurbishment of its flagship store – a makeover costing £24 million ☉.
[Photo: www.londontown.com]
Finally, during this decade F&M made the move toward a multi-store structure. In 2013 and 2014 branch stores were opened in St Pancreas International Station and Heathrow Terminal 5 respectively. This was followed by an international presence. Dubai opened an F&M store in 2014 and just this year the company made its biggest venture on the world stage yet, opening F&M Hong Kong.
The Foie gras controversy
As a grocer F&M has pursued a market strategy of providing quality (definitely not inexpensive) groceries (“posh nosh”) and luxury (and sometimes exotic) niche food items (eg, ready-to-eat luxury meals such as fresh poultry or game in aspic jelly). This has occasionally led the retailer to become embroiled in controversy. In 2010 F&M earned the opprobrium of animal rights group PETA UK who (enlisting the support of some celebrity Britons) demonstrated against F&M‘s Foie gras product. The protestors were unhappy that the retailer did not alert consumers to the cruel method of force-feeding geese and ducks to produce the product. F&M, despite the pressure exerted on it, doggedly refused to discontinue the line.
The company has been the subject of other controversies of recent. F&M has been tangled up with the brouhaha of allegations of tax avoidance by its parent company’s subsidiaries. This resulted in a mass sit-in in F&Ms Piccadilly store by UK Uncut (a lobby group protesting public service cuts and tax avoidance).
Severing of ties with the Windsors and more bad publicity
In 2018 Buckingham Palace stopped providing meat from its Royal Farms at Windsor Park to F&M…it was unhappy with F&M’s practice of bullying its suppliers to squeeze prices down. However F&M did not pass this on to consumers, continuing to assert that its bacon, pork and lamb (at double the supermarket price!) was sourced from HM’s Windsor Farms. The company had to grovel apologetically to Buck Palace, and with regal ill-will compounded, thus its 150-year tenure as the Royal family’s grocer was finito.
PostScript: A British institution but not a British-owned one
Despite its Royal association and status as a “national institution“, a part of the retailing firmament in the UK, F&M has long been foreign owned. In 1951 it was acquired by a Canadian businessman, W Garfield Weston. Today F&M is still in Canadian hands, privately owned by Wittington Investments Ltd which also owns the discount clothing store Primark.
181 Piccadilly, St James’s, W1A 1ER
Reference material:
“Fortnum & Mason: The First 312 Years”, www.fortnumandmason.com
“10 places the Queen does her shopping”, Harper’s Bazaar, 15-May-2018, www.harpersbazaar.com
“After 150 years as the royal grocery, Fortnum and Mason is ditched by the Queen and forced to apologise over Windsor meat scandal”, Sebastian Shakespeare, Daily Mail, 29-Sep-2014, www.dailymail.co.uk
◛▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁◛
❅ Smythson’s are especially blessed by the British Crown, being the recipients of no less than four Royal warrants
⊞ a French red wine
☉ the following year F&M installed bee hives in the rooftop of the store!