The Family That Owns Trader Joe’s Is Having A Frugality War

People all over the world celebrate the companies that run stores under the Aldi brand for their super low prices. Yet the branch of the family that owns Aldi Nord, parent company of Trader Joe’s in this country and the Aldi stores in countries like France and Denmark, is currently having a family feud over frugality that has dragged their business into the public eye, something that the family has avoided for the last half-century or so.

The Aldi grocery empire began with one small store in Germany, and the owner’s sons turned that one store into a chain with hundreds of outlets. Their family name was Albrecht, and the store name is an abbreviation of Albrecht Discount. The separate Aldi companies came about 50 years ago: the brothers disagreed about some business practices and decided to split the company along geographic lines across Germany.

When expanding to new countries, only one of the companies will take the new territory. That’s how Aldi Nord has France, Spain, Belgium, and the Netherlands, and Aldi Süd has Australia, Switzerland, the United States, and the United Kingdom.

That makes the U.S. the only country where the two Aldis actually compete with each other: maybe not directly, but they do share some customers. Aldi in this country is making changes like removing artificial colors, hydrogenated oils, and MSG from its products, and has been attracting food-conscious but also budget-conscious millennials.

To sum up: we’re talking about Aldi Nord, the company that owns Trader Joe’s, and Aldi stores in the other big English-speaking countries. The Albrecht brother in charge of that branch had two children, and now one brother is fighting with the other’s widow over control of the company and her family’s spending.

According to Bloomberg, Babette Albrecht and her five adult children receive €25 million ($28 million) from the trust that runs the company every year, and her brother-in-law has been working to remove their branch of the family from having very much control over company decisions.

The surviving brother, Theo Jr., has tried various methods to remove his nieces and nephews from control of the company. After their father’s death, the trust was changed to give their side less influence over the company. Theo Jr. offered to buy the family out for an amount that they found too low, and even offered to pay them €25 million per year to vote his way on trust matters.

When the five siblings won in court, with the changes to the trust board reversed, their uncle went to the press, sharing lurid details of his late brother and his sister-in-law’s spending with a newspaper.

This isn’t just a glimpse into a family that’s been pretty secretive, as billionaires go: the disagreements within the board could hold up changes that the company needs to make. Oh, you’ll still find an entire seasonal pumpkin spice department at your local Trader Joe’s, but the other branches of Aldi may suffer and fall behind their competitors in Europe and elsewhere.

At Aldi’s Empire of Austerity, a Fight Over Extravagant Spending [Bloomberg]