A Look Behind ALDI’s Mysterious Curtain

Philipp Westermeyer:

Let me give you a quick introduction: ALDI is arguably one of the most valuable companies ever built in Germany. If ALDI SÜD were publicly traded today, its valuation would likely be estimated at 85 to 90 billion euros. That would make it one of the most valuable German companies – and we're only talking about ALDI SÜD here.

My guest today played a significant role in this success. He joined ALDI as a young graduate, at a time when the company had already been around for about 10 to 12 years, and stayed with the organization well into his later years. In the end, he even led the foundation that holds the shares of ALDI SÜD. He worked closely with Mr. Albrecht and was instrumental in building ALDI's U.S. business, which today generates around 25 billion euros in revenue. To my knowledge, this is the first time someone has spoken so openly and in such detail about ALDI's history and shared their perspective on the company today.

There are probably very few experts on brick-and-mortar retail as experienced as Uli Wolters. You can tell just by listening to him. At 82, he sounds like he’s 60 and looks like he’s 65. For the past few years, he’s been working on a new concept: a company called Action. Action has 500 stores in Germany and thousands more across Europe. Yet, I’m guessing most of you have probably never heard of Action – I hadn’t either. It’s absolutely fascinating to see what’s happening in the low-price segment right now.

The following, remarkable material, was recorded at an event held at a castle in central Germany. It was shared with a select audience of about 10 to 15 people. I’ve been told that these guests were happy to wait 70 to 80 minutes for their dinner just to hear this story.

So, let’s dive right into the incredible story of ALDI, as told by Uli Wolters. Here we go!

Philipp Westermeyer:
Welcome, Ulrich Wolters.

Ulrich Wolters:
Hello, Philipp.

Philipp Westermeyer:
To set the stage a bit: You weren’t originally in retail, and it seems you didn’t even plan to pursue a career in it.

Ulrich Wolters:
That’s correct. Out of necessity, I started working at the age of 16. My first job was in the U.S. After school, from 5 to 9 PM, I worked as a salesman in a department store. I sold shoes, fishing gear, and similar items to earn a little money and become independent.

Philipp Westermeyer:
So, you partially grew up in the U.S.?

Ulrich Wolters:
No, no. I had a scholarship for a school there and spent one year studying. I lived with an American family, and back then, things were very different – no cell phones. During that year, I didn’t speak a word of German or even call my family because it was too expensive.

Philipp Westermeyer:
Where in Germany are you from?

Ulrich Wolters:
I’m from Cologne. I grew up there, went to school, and worked in retail to earn some money. Later, I went back to the U.S. again. By that time, I was already in university, but due to the economic downturn, I couldn’t find anything else.

So, I ended up working in a supermarket, where I packed groceries into bags at the checkout. Those bags were placed on a conveyor belt, transported to a storage area, and customers were given a number to pick up their orders. It was pretty new at the time, almost like today’s Click & Collect.

I didn’t particularly enjoy it; I just did it to make a living. After that, I had entirely different plans. I finished my degree and spent two years writing a 350-page thesis on the Western European automotive industry.

Ulrich Wolters:
I visited many car factories across Europe, gained some fascinating insights, and eventually completed my work. Naturally, my plan was to start working at Mercedes afterward. Since they had sponsored me, I didn’t even need to go through an application process – I would have likely started as an assistant to the board.

But then, by coincidence, I met Karl Albrecht. It was a completely unexpected encounter because I had absolutely no connection to ALDI at the time. In fact, I had never even been inside an ALDI store before.

Philipp Westermeyer:
Karl Albrecht, the founder of ALDI?

Ulrich Wolters:
Yes, one of the two brothers.

At that time, ALDI had placed a job ad, which was highly unusual. It appeared in the Frankfurter Allgemeine Zeitung and stated that Karl Albrecht – not yet under the name ALDI SÜD – was looking for a head of administration, covering areas like finance and taxation.

I applied for the position mostly as a way to irritate my future father-in-law. He often complained about ALDI because they sold things so cheaply. He owned a chain of confectionery shops and would say, "They sell chocolate for less than I can buy it wholesale." So, I thought, "This ad is intriguing; I’ll apply just for fun." I sent in my application and forgot about it because I had to return to Vienna to finish my work.

Some time later, my father came to visit me in Vienna – he was on a supervisory board there – and he brought a letter he had already opened back home in Cologne. He said, "This is for you, but it’s probably nothing important." I didn’t read it immediately, either.

When I eventually opened the letter, it said I was invited for an interview. What had irritated my father most about the letter was the final sentence: "Travel expenses for second class will be reimbursed."

Philipp:
Would first class have been more fitting?

Ulrich Wolters:
Well, I thought it might not be entirely appropriate. So, I wrote them a humorous letter. I explained that I was currently in Vienna and that even second-class travel expenses would probably be too high. I suggested they simply return my documents – unless, of course, they still wanted to meet me. I mentioned that I’d soon be in Cologne, which would make the trip much easier.

They replied immediately, asking me to call them and suggesting I visit Mülheim. So, I did.

Philipp Westermeyer (Philipp):
And during your first interview, you met Karl Albrecht?

Ulrich Wolters:
Not right away. First, I met his colleague, who was already working with him as a managing director. They offered me the position, but I didn’t entirely understand it. Sure, I had studied tax law and various other things, but managing an entire administration? I had no practical experience whatsoever.

Philipp:
How big was ALDI at that time?

Ulrich:
168 stores.

Philipp:
So, a few thousand employees?

Ulrich:
Yes, at most. I even mentioned that during the interview. I told them the salary they were offering was unusually high for someone just starting out. I said, “Sure, I could imagine doing this.” But then they sent me another letter, asking me to come back for another meeting.

That’s when I met Karl Albrecht. The two of them were sitting there and said, “You can still take the position, but we’ve been thinking about it, and we don’t believe you’ll stay in that role for very long. So, we’d like to offer you an alternative.”

They proposed that I join them as a trainee. This role didn’t exist before, and there wasn’t even a specific plan for it. But they said, “You’ll learn everything here. We promise you’ll learn everything you need, and we guarantee that after three years, you’ll become the managing director of one of our regional operations.”

That sounded much better to me. Bookkeeping wasn’t exactly my favorite thing anyway. So, I said, “That sounds good to me.”

Philipp Westermeyer:
Back then, no one could have guessed that you would end up spending 38 years at ALDI.

Ulrich Wolters:
Actually, it was 43 years.

Philipp Westermeyer:
Including your later work for the foundation and as a member of the supervisory board. At that time, was ALDI something people in the business world talked about?

Ulrich Wolters:
No, not at all. Let me be clear: Before I started working there, I had only been inside an ALDI store once in my life. I visited my first ALDI just before my interview in Mülheim. There happened to be an ALDI store on the corner, so I went in – and almost walked straight back out.

The store was tiny, maybe 80 square meters, and looked terrible.

Later, I learned that they only rented that store because it came with an apartment upstairs. At the time, there was still a housing shortage in Germany, and someone who worked in administration lived in that apartment. That’s why they opened the store. But honestly, the store was in very poor condition.

Philipp Westermeyer:
Still, it must have been pretty spectacular what was being said about ALDI at the time. Those guys in Essen already had 170 stores, and later a few hundred across the Ruhr region. Even back then, that was no small operation. It sounds like an impressive entrepreneurial achievement, doesn’t it?

Ulrich Wolters:
It absolutely was, especially since ALDI was profitable from the very beginning. But it was never really perceived that way. That’s one of the reasons why ALDI remained so quiet in public – no interviews, no statements, nothing. ALDI was completely underestimated.

The big retailers of that time – all of whom no longer exist today – often said that ALDI would take care of itself, meaning they thought it would eventually disappear from the market, most likely through bankruptcy.

Philipp Westermeyer:
ALDI’s response was basically, “If you knew our numbers, you wouldn’t think that.”

Ulrich Wolters:
But no one believed it at the time – that they were even making money. I later had them explain a few things to me.

Philipp Westermeyer:
You worked for ALDI SÜD. The dividing line between the two companies essentially runs through Essen and Mülheim, right?

Ulrich Wolters:
Yes, and then it continues down toward the Lower Rhine and further south. In areas where there weren’t any stores, they followed the A45 highway as a guideline.

Philipp Westermeyer:
And the two brothers worked that out amicably between themselves?

Ulrich Wolters:
Yes. The two brothers just had different opinions, and all the documentaries about them have always gotten it wrong. There’s a claim that they fell out over selling cigarettes – that’s complete nonsense.

The real difference between them was in their way of thinking. Hardly anyone knows this, but I’ll share it here since it’s not anything inappropriate.

They had differing ideas about how to deal with people and employees. First, how much responsibility you give them, and second, how much respect you show them and how well you pay them.

ALDI SÜD was the company I worked for. Honestly, I wouldn’t have worked for the other brother. His view was always, “People don’t really want to earn that much.” I always had a very different opinion on that.

Philipp Westermeyer:
Still, the two brothers had a very similar approach to communication. Both were very reserved and, in the end, extremely successful entrepreneurs.

Ulrich Wolters:
Of course. That kind of dynamic creates its own momentum. When you have two entities moving in different directions, it naturally sparks a bit of competition – something like, “Let’s see who’s better at this.”

Philipp Westermeyer:
But weren’t you a bit intimidated back then? Wasn’t Albrecht already a significant figure by that time?

Ulrich Wolters:
No, and I have to add that no one understood why I wanted to work for them instead of Mercedes – not my parents, not my friends. Everyone thought I was crazy.

Philipp Westermeyer:
And why did you do it?

Ulrich Wolters:
Because I had a feeling there was something there. Plus, what my future colleague – the one I would later work with for many years – told me was very convincing. He spoke quite openly about their success, the big plans they had, and their genuine commitment to treating people with respect by giving them real responsibility. That really appealed to me.

Then there was something else – maybe a bit funny, but this is the right place to share it. When they said I could start as a trainee, they could have easily said, “You’ll get 800 marks a month,” which would have been typical for a trainee back then. After all, the assumption was that trainees didn’t contribute much – it was seen as a kind of stipend for learning.

But instead, they said the salary they had initially offered me for the administrative director position was what they had stated – and that wouldn’t change.

So, I ended up with a very generous salary, something none of my friends had at the time, and I got to learn on the job. It was true hands-on training: you’d get a message saying, “Tomorrow morning, you’ll be here at this time.” And it started immediately. Naturally, I was put in charge of a store straight away, as was typical at ALDI. They gave you real responsibility right from the start. I was immediately responsible for a district with 12 stores in Düsseldorf.

Philipp Westermeyer:
So, that happened when the trainee program ended?

Ulrich Wolters:
Oh, no – it was just six weeks in, actually. That was the advantage of the training program. Then they said, “Now it’s time for you to try procurement.” So, I spent four weeks with the chief buyer. Back then, procurement was handled by just one person and an assistant.

The assistant explained what he did because he was about to go on vacation, and I was tasked with covering for him during that time.

So, I started purchasing for ALDI SÜD.

Philipp Westermeyer:
I’m guessing you pushed prices down hard, like ALDI is famous for?

Ulrich Wolters:
Yes, and I also introduced new ideas. Like I said, I had no fear. If they’d told me, “You’re not the right person for this,” I’d have simply done something else. That wouldn’t have bothered me.

But I really enjoyed it all. I learned so much, worked a lot, and invested a great deal of time. For instance, when I started as a buyer, I was given a ledger – you know, the old-fashioned, handwritten kind – with notes from the person who held the role before me. It listed things like: 550,000 cartons of green beans, 650,000 of fine peas. That was my shopping list for his vacation period.

It was harvest season, so I was buying canned goods for the entire year. That’s when I started thinking: “I need to talk to these folks in France – Bonduelle.” You’ve probably heard of them; they’re a well-known company. So, I asked them, “What if you print a different name on the cans? How much of a discount could we get?”

It turned out to be 2 or 3 pfennigs per can. That doesn’t sound like much, but when you’re dealing with millions of cans, it adds up quickly. That was one of the birth moments of ALDI’s private labels.

Philipp Westermeyer:
But did you or the Albrecht family realize what this would eventually turn into?

Ulrich Wolters:
Yes, Karl Albrecht always had a clear vision: “We need to think about the future.” That’s why they brought in a young guy like me. Though, honestly, I was a bit of a whirlwind in the company.

Philipp Westermeyer:
Was it already the goal back then to open thousands of stores?

Ulrich Wolters:
No, not thousands, but definitely many. Expanding abroad wasn’t even on the table at the time, but Karl Albrecht wanted to grow and build the necessary organizational structure for it. That’s why he needed people.

And as I mentioned, I was an outsider in the company back then – the second employee with a high school diploma. Plus, I had both a university degree and a PhD. Naturally, people wondered: “He must be related to the Albrecht family – why else would he be here?” But that didn’t bother me.

Philipp Westermeyer:
Looking back, would you say that many people underestimated what was happening at the time? That was the beginning of one of the most spectacular business success stories in Germany.

Ulrich Wolters:
I wouldn’t say that. It wasn’t obvious at the time. But I had a sense that these two men had a plan – and they were serious about it. They approached everything with a clear, strategic mindset, as I’ve mentioned before: respect for employees and fair compensation.

And Karl Albrecht had this guiding principle, which you rarely hear today: “If we’re doing well, I want our employees to do well, too.”

Philipp Westermeyer:
Fast forward to today: How big has ALDI become?

Ulrich Wolters:
ALDI SÜD now operates in 11 countries and, let’s say, has an annual turnover in the ballpark of 100 billion euros.

Philipp Westermeyer:
We’re talking about revenue?

Ulrich Wolters:
Yes, that’s quite a lot.

Philipp Westermeyer:
I think in terms of global retail, they’re …

Ulrich Wolters:
They’re ranked 7th globally.

Philipp Westermeyer:
Walmart, Amazon, and then …

Ulrich Wolters:
Amazon is really more of an online retailer, but of course, they’re enormous. Walmart – they now employ nearly 2 million people and are absolutely massive.

Philipp Westermeyer:
How many employees does ALDI SÜD have?

Ulrich Wolters:
Around 200,000.

Philipp Westermeyer:
That’s still quite a significant number.

Ulrich Wolters:
It is, but relatively speaking …

Philipp Westermeyer:
Looking at it from your perspective now, as someone who is no longer directly involved: If ALDI SÜD were to go public and we applied standard retail valuation metrics, what do you think the company would be worth?

Ulrich Wolters:
I’d estimate it to be in the high double-digit billion euro range.

Philipp Westermeyer:
So we’re talking about a company valuation of around 80 to 90 billion euros – just for ALDI SÜD. That would place it among the top companies in Germany’s stock market. I think SAP is valued at 200 billion. Otherwise, ALDI SÜD would be one of the 10 most valuable German companies.

Ulrich Wolters:
Yes, and we’re far from done because the growth is still ongoing.

Philipp Westermeyer:
Tell me a bit about the metrics back then. Did you really need that many stores to be profitable?

Ulrich Wolters:
No, it was more about the vision – to grow and make success scalable, replicating it over and over. That wasn’t just anyone’s idea; it was Karl Albrecht’s. That was his vision.

And that’s also why he focused early on creating an organization. What intrigued me most was something he once said: “My real job is to find people for every position in this company who can do it better than I can.” And he didn’t just say that; he truly meant it.

Philipp Westermeyer:
Did you realize back then that you were dealing with someone extraordinarily talented as an entrepreneur? When did it click for you?

Ulrich Wolters:
It became clear when I compared it to the environment I knew. My father was a managing director at a major corporation, and I had seen firsthand all the things that didn’t work well there.

At ALDI, everything was straightforward. From the start, and this is crucial, I had complete trust in Karl Albrecht and also in his colleague, who was a fantastic person.

If someone else had told me I could have this or that position in three years, I would have dismissed it as nonsense – because a contract can always be canceled. But with them, I believed it. And I committed to it because I saw the tremendous opportunities ahead.

Philipp Westermeyer:
So, he was someone you could genuinely trust. But was he also a brilliant strategist and incredibly hardworking?

Ulrich Wolters:
No, and that’s what’s so interesting. When I first met him, he was already working a very structured schedule. He came into the office four days a week, always from 9 AM to 1 PM. And it wasn’t because of today’s modern work trends. On Tuesday mornings, he would play 18 holes of golf with his wife, and he never worked in the afternoons.

Philipp Westermeyer:
So all those sayings about “You have to work relentlessly to achieve success” …?

Ulrich Wolters:
Well, of course, early on, during the post-war period and the company’s initial stages, he and his brother worked extremely hard. They started with basic resources, even driving those coal-powered cars. They really put in the effort back then.

Philipp Westermeyer:
How did things develop when you joined? At that point, they already had 170 stores. How long had it taken to get there? How many years after the company’s founding did you come onboard?

Ulrich Wolters:
It all started in 1948, initially …

Philipp Westermeyer:
So, 20 years later. That means they had already spent two decades building it up.

Ulrich Wolters:
Yes, partly, but the early development work didn’t count for as much back then because they initially operated service counters. It was quite groundbreaking at the time: a discount store with a 4-meter service counter, uniform across all locations, and a limited range of products sold over the counter. Self-service didn’t exist yet.

Then the self-service concept arrived from the U.S., and they tried to adapt. But then came the breakthrough idea: “We’ll do things entirely differently.” A limited assortment of fast-moving items – products that sold quickly. Back then, it was about 400 items. To put that in perspective, a typical supermarket today carries 10,000 to 12,000 products.

There was no frozen food – it simply didn’t exist yet – and no refrigeration. This meant no fresh milk, only long-life UHT milk. With that alone, they achieved a 40% market share for milk in Germany. UHT milk is good milk; it’s just heated to make it shelf-stable and could be stacked on pallets without refrigeration.

Philipp Westermeyer:
So how fast did things move from the 160 stores you started with to …?

Ulrich Wolters:
It was all through organic growth. We never made acquisitions. The growth was steady and at a solid pace – typically in the high single-digit percentage range.

Philipp Westermeyer:
Does that mean about one new store per week?

Ulrich Wolters:
No, it wasn’t that fast at the time – it was less. You always had to build the logistics infrastructure alongside. For every 30 to 50 stores, you needed a brand-new distribution center.

And, of course, you also needed capital. But here’s a little trick I’ll share, though it’s now widely known: The key was in those fast-moving items – the 400 high-turnover products. Store inventory turnover was one week, and the warehouse turnover was also one week. That meant the entire inventory was completely turned over every 14 days.

Payments to suppliers, on the other hand, were typically made 30 to 35 days later – which was quite fair to the suppliers. That time gap generated liquidity that could then be reinvested into expansion – opening more stores and building new infrastructure.

Philipp Westermeyer:
So, it’s a cash flow positive business model?

Ulrich Wolters:
Yes, exactly. This additional cash flow was reinvested directly into expansion – to open more stores. There wasn’t really any outside capital involved; no debt was taken on. Instead, everything was funded exclusively through cash flow – expanding, expanding, and expanding further.

Alongside store openings – which was already unusual – a property company was being built at the same time. ALDI SÜD managed this quite differently compared to ALDI NORD, but that’s less relevant here. Today, out of ALDI SÜD’s approximately 8,000 stores worldwide, around 70% are company-owned properties.

Philipp Westermeyer:
In the valuation you just mentioned, are those properties already factored in or not?

Ulrich Wolters:
Yes, you could look at it either way. But the properties are there, and they’re entirely debt-free. No dividends were ever paid out, and the entire cash flow – after taxes, of course, optimized as much as possible – was funneled back into expansion.

That’s why ALDI’s balance sheet has always been exceptionally strong. Even Mr. Schwarz, from Lidl, acknowledged this to me.

Philipp Westermeyer:
You mean Mr. Schwarz, the founder of Lidl?

Ulrich Wolters:
Yes, Mr. Schwarz, from Lidl. He was always laser-focused on ALDI and essentially copied the model – he only started in 1972. Once, he told me: “I know your balance sheets, and they read like a thriller.” And that’s still true today.

Here’s something you should know, and I don’t think it’s a secret: Lidl is now the fourth-largest grocery retailer in the world, with annual revenues of 160 billion euros. But they still carry debts of over 20 billion euros.

Philipp Westermeyer:
Because they didn’t grow through cash flow, but rather because …

Ulrich Wolters:
They grew even faster than ALDI and didn’t have the same foundation. So they had to borrow money. That’s not a problem; you can always get financing. But, of course, you have to pay interest on it.

Philipp Westermeyer:
Did they ever try to poach you?

Ulrich Wolters:
Yes, but as I said, I never seriously considered it.

Philipp Westermeyer:
By the time you had so much insider knowledge about ALDI, after all those years, they must have offered you millions.

Ulrich Wolters:
They would’ve signed any contract I put in front of them.

Philipp Westermeyer:
So, we’re talking about multiple millions, right?

Ulrich Wolters:
Yes, certainly several million. But it wouldn’t have mattered to them because I knew the business inside and out. And here’s another factor: I started making decisions very early on, and the decision-making process back then was quite interesting.

I remember one day in early 1975. By then, I was well-established and one of three people leading the company. It’s worth noting that our leadership structure was unique – there were no defined departments or “silos” in our management. That’s almost unheard of today.

We did have one person who was naturally seen as the chair – not because he was pushy, but because he was brilliant. People jokingly called him “lazy” because he left the office every day by lunchtime. In reality, he was an exceptional entrepreneur and strategist. I can’t speak highly enough of him.

This system had a lot of advantages. For example, I was immediately accepted as an equal partner, even though I was working with two highly experienced retailers. That was unusual.

They even went so far as to rebuild my office to make sure it was the same size as Karl Albrecht’s office, right next to his. Small details like that showed how much they wanted me to feel fully integrated.

I’ll never forget my first day in Mülheim. I was 29 years old and already part of the ALDI SÜD leadership team. Karl Albrecht told me, “By the way, there’s a new car waiting for you downstairs.”

When I went down, there it was – a brand-new S-Class Mercedes with a V8 engine, automatic transmission, and air conditioning. I had never seen anything like it before.

Philipp Westermeyer:
I thought they were always so frugal?

Ulrich Wolters:
They were frugal, but only in the right places.

Philipp Westermeyer:
So when it came to you or other key people, they were actually quite generous?

Ulrich Wolters:
Extremely generous. When I first started, they said, “Your salary? That’s simple. You’ll get the same as Mr. Steinfeld,” who was my colleague and had been with the company for a long time.

They added, “But you’ll have to wait a little. In your first year, you’ll get 70%, in the second year 80%, then 90%, and by the fourth year, you’ll receive 100%. From then on, you’ll always earn the same as your colleague.” It was a straightforward system, but it left a strong impression.

Philipp Westermeyer:
What would you say are the most important secrets to being a successful retailer? If you had to distill your 40 years into 2–3 key lessons, what would they be?

Ulrich Wolters:
I can sum this up relatively quickly because it’s quite universal. The foundation was, of course, the business idea, which Karl Albrecht didn’t invent but refined under the principle: “Keep it simple.”

This meant achieving results through things like cash generation from fast inventory turnover and maintaining simple structures. At the same time, he started building an organizational structure early on that could handle future growth.

The regional directors were exceptionally well-paid and held significant responsibility within their regions. I’d compare them to princes – regional princes, to be precise. They were fully in charge of their regions, with complete accountability for their balance sheets and profit and loss statements. Essentially, these were independent businesses operating alongside each other, while we functioned as a small holding company overseeing centralized functions like procurement, strategy, and – most importantly – personnel policies.

Throughout my entire time there, until I left, we never had a formal Human Resources department.

Philipp Westermeyer:
Never?

Ulrich Wolters:
No, not in the traditional sense. Locally and at headquarters, we had two women who handled payroll and technical administration. But everything else – like filling key positions, salary determination, organizational planning, or developing the leadership system – we managed ourselves. I personally played a significant role in that.

And here’s a secret, Philipp: If you do this right and have the right people in place – people who are not only well-compensated but also willing to take responsibility – you’ll even have time in the afternoons to play golf.

This brings me to another point: We developed a sustainable culture of failure. When you give people responsibility – as they gave to me when I was young – they will make mistakes. That’s completely normal. But why do big corporations often avoid mistakes? Because their people are afraid.

Philipp Westermeyer:
What was the biggest mistake you made?

Ulrich Wolters:
Oh, there were so many. It’s hard to say.

Philipp Westermeyer:
Name one or two mistakes that really cost money.

Ulrich Wolters:
I don’t know if this was truly a mistake, but here’s an example. At one point, I had the idea of repurposing some of our inner-city locations that we no longer needed for ALDI. Back then, ALDI was moving more and more to the outskirts, onto large plots with ample parking. I suggested, "These inner-city locations are valuable spaces in prime areas. Why don’t we turn them into our own fast-food chain, something like McDonald’s?"

We actually tried it. At one point, I was on the verge of signing a 50/50 joint venture agreement with Burger King. But it fell apart when they started renegotiating terms. That’s when I got up and walked away. I don’t do renegotiations. We had agreed on 50/50 ownership, but they came back claiming that their innovative product development contributions were worth more than our management expertise. I strongly disagreed. I told them, "It’s 50/50 as agreed, or nothing at all." So, I walked away, and they went on to pursue it alone. Honestly, they haven’t been particularly successful with it to this day.

We then launched a few fast-food locations on our own but quickly realized how tough that business was. Especially because we needed all our managers back for our rapid expansion in Germany.

In the 1980s, we shifted our focus to what became known as the "parking lot store." I introduced the principle: "Better to have a parking lot without a store than a store without a parking lot."

That was a completely new approach at the time. Previously, stores were located in city centers, pedestrian zones, and so on. We refocused on this new concept and moved forward. Some of the inner-city properties were sold off – in some cases, very affordably – to McDonald’s. They were thrilled that we exited the market because they took us very seriously as a competitor.

We had even developed a product range that, to this day, I’d say was better than McDonald’s.

Philipp Westermeyer:
How did things unfold when German reunification happened?

Ulrich Wolters:
That’s an interesting story.

Philipp Westermeyer:
Who got to take over East Germany, ALDI NORD or ALDI SÜD?

Ulrich Wolters:
Let me tell you a bit of background first, and then we’ll get to reunification. In 1975, I walked into a meeting with my two colleagues and said, "What do you think about the idea of expanding to the U.S. and opening stores there?" Both thought it was a fantastic idea, even though neither of them spoke a word of English. Karl Albrecht had been on the front lines in Russia during the war, and my other colleague had fled from the East on a bicycle. But they said, "Yes, let’s do it. It’s a great idea."

Our "market research" at the time consisted of me simply suggesting the idea. It wasn’t exactly the most professional approach, but it got the ball rolling. In 1975, I happened to come across a company, so I flew over, took a closer look, and ended up buying it.

Philipp Westermeyer:
Which company was it?

Ulrich Wolters:
It was a small company with about 25 supermarkets in the Midwest, in Burlington, Iowa—so in Iowa and the southern part of Illinois. I spent three days negotiating with the owner and bought the company for $8 million.

At the time, it wasn’t profitable, but the owner had a manager who was running the company for him. This man was 42 years old. I immediately thought, "This is my Mr. ALDI USA—I need him."

That’s why I bought the company.

Philipp Westermeyer:
What made this man stand out? What were his strengths?

Ulrich Wolters:
He came across as reliable and trustworthy—a real retailer who had learned the business from the ground up. And importantly, he was American. The worst thing I could’ve done was send a German over there and say, "Open up a store." Germans tend to rub people the wrong way abroad. "We in Germany, when you do it like this"—you might as well close the store before it even opens. So I knew I needed him.

He signed the contract after three days. Then I turned to Charlie, the seller, and said, "Now comes part two." He looked at me, surprised, and asked, "What now?" I said, "Now we’re going to sell the stores."

Charlie was stunned. "But you just bought them!" he said. "Yes," I replied, "but I don’t actually want the stores."

My new hire managed to sell all 25 supermarkets within six weeks—to competitors, complete with inventory, staff, leases, and warehouse stock. I told him, "Anything you sell above book value is additional profit we can keep on top of the $8 million."

By the end of it, we had an empty warehouse, a small administration team—maybe 15 people, including a few managers and a bookkeeper—and no stores, no revenue. I said, "Now let’s turn this around."

A week later, I was back home. On Monday, I went to the office, and my two colleagues asked, "What’s the update?" I said, "Everything’s sorted. We can get started now." They thought it was fantastic, and that’s how we began.

Today, ALDI USA generates nearly $30 billion in revenue.

Philipp Westermeyer:
And all of that came from this small seed you planted, starting with Charlie’s foundation?

Ulrich Wolters:
Yes, Charlie was done after that. He had completed his part, earned his money, and moved on. From that point, we started fresh—with just two stores, which we opened as ALDI five months later.

Philipp Westermeyer:
Were you on-site a lot during that time?

Ulrich Wolters:
I would usually spend about seven to eight weeks per year there, in one-week trips.

Philipp Westermeyer:
Over all those years, were you incentivized only through a fixed salary, or did you have shares in the company? Were there any bonus structures?

Ulrich Wolters:
That’s a great question. The answer might disappoint you a bit. Yes, I had a profit-sharing arrangement and was, in fact, the last person to have one at ALDI when I left.

However, we mutually agreed—on two separate occasions—to reduce it significantly. Otherwise, I’d probably be quite wealthy today.

Philipp Westermeyer:
Why did you reduce it?

Ulrich Wolters:
Well, let’s just say it would have been too much.

Philipp Westermeyer:
You’re the first person I’ve ever heard say something like that.

Ulrich Wolters:
I think it’s because that incredible growth we experienced wasn’t something anyone could have predicted. During my time there, I always told Karl—and he agreed—that we needed to account for unforeseen circumstances.

If there were windfall profits—unexpected gains from external factors—we needed to put a cap on it. So, there was a profit-sharing arrangement up to a certain point, along with a very generous fixed salary.

Philipp Westermeyer:
But you were at least an income millionaire, right?

Ulrich Wolters:
Yes, of course.

Philipp Westermeyer:
Well, not everyone can say that.

Given the value you helped create, you should actually…

Ulrich Wolters:
Yes, I always felt I was treated very well and thought everything was perfectly fair. But I told Karl—our relationship was excellent—“If you think I’d work even one second harder or better because I might get a share of the profits, then you’re mistaken. That’s not who I am.”

Philipp Westermeyer:
Just to recap: We’re saying the company is probably worth 80 to 90 billion today, correct?

Ulrich Wolters:
Maybe even more today, yes.

Philipp Westermeyer:
And if you owned even just one percent of that…

Ulrich Wolters:
It was always about profit sharing. Ownership wasn’t something he would ever have given up.

Philipp Westermeyer:
But still, you created value worth billions.

Ulrich Wolters:
And yes, perhaps I contributed more than I ultimately gained from it. But, as I said, that never bothered me, especially because I felt extraordinarily comfortable. I had tremendous freedom to operate and could work very independently.

There was never a situation where someone said, "Didn’t you think of this?" We had a genuine culture of learning from mistakes. If something went wrong—and of course, that could happen—it was corrected. And it was always done together. Every major decision was made collectively by the three of us.

In all those decades, there wasn’t a single instance where Karl, as the owner, overruled us and said, "Enough of this; we’ll do it my way." He also explained his reasoning.

He said, "I have such great trust in you, and if you’re passionate about something, I assume you’re right. So we’ll do it your way." That was his approach.

Philipp Westermeyer:
So he was an exceptional leader.

Ulrich Wolters:
The best I’ve ever known or worked with.

Philipp Westermeyer:
Why is ALDI’s corporate culture still so reserved? Why do they communicate so little?

Ulrich Wolters:
That’s not really the case anymore. These days, you can read plenty about ALDI, and they’re present everywhere. Back then, though, it was entirely different, and it even became more stringent over time.

We operated completely under the radar—that was very intentional. Everyone assumed we’d eventually go bankrupt, yet we were achieving incredible success. We consistently had the highest profit margins in the German food retail sector.

Philipp Westermeyer:
What kind of margins are we talking about?

Ulrich Wolters:
5% of revenue as actual profit.

Philipp Westermeyer:
Not EBITDA or something similar?

Ulrich Wolters:
No, no — EBIT, actually. And remember, we didn’t have any interest expenses.

Philipp Westermeyer:
And that's far above the typical margin in retail, right?

Ulrich Wolters:
Many retailers are thrilled if they achieve a profit margin of 1%. I’m not talking about companies like Galeria or similar ones. But yes, we were always at the top.

And we managed to finance all our real estate investments out of the cash flow, which was, of course, a tremendous advantage. This particularly paid off during periods of inflation—and yes, we’ve seen inflation before. Young people today might not remember, but the first big wave of inflation hit in the 1970s during the oil crisis.

At ALDI, we experienced price increases of 10% in one year for our assortment—that was incredibly high.

Philipp Westermeyer:
Why didn’t more people copy your model? We’ve heard about Mr. Schwarz, but he was one of the few. You’d think that with such a successful model, many others would try to replicate it.

Ulrich Wolters:
It’s true that many tried, but they didn’t understand the core principles. For example, they’d think, "If I buy the product cheaper, I can make more profit." That sounds logical at first, but it’s a major misconception.

These days, I often hear people say you need to manage your assortment based on EBITDA metrics. I completely disagree—we never did that. Our approach was simple: "Let’s offer the right products for the customer, with consistent and reliable quality." It didn’t have to be premium quality, but the products needed to be good and trustworthy.

Once we purchased a product, we set the price based on market conditions—not by saying, "This needs at least a 20% or 30% margin." That kind of thinking is, frankly, counterproductive.

Instead, we said, "Let’s sell as much as possible, generate maximum turnover, and then control costs so effectively that we achieve a 5% profit." And that approach works.

Philipp Westermeyer:
So, ultimately, your approach to assortment management was the big secret?

Ulrich Wolters:
Exactly. It was built on the principles I just explained. And I had this incredible colleague, Horst Steinfeld, with whom I worked closely until his passing. He was a brilliant man—a mathematical genius.

We managed the entire assortment planning on a simple A4 pad. He didn’t even use a calculator; he did everything in his head. He was so fast that I constantly tried to follow his thought process and understand the logic behind it.

But that’s how we achieved absolute efficiency—something that today might require a 20-billion-euro SAP system.

Philipp Westermeyer:
But in the early years, the barriers to entry weren’t all that high. I mean, what you just described with assortment management – okay, it was efficient, but nothing that couldn’t have been replicated.

When I look at today’s economy, if someone started now with the kind of traction you clearly had back then, I wonder why more people didn’t try to do something similar. You didn’t have AI, a secret search engine, or any uncopyable network effects. You didn’t even have a standout brand – everything was relatively straightforward.

And yet, you built everything from cash flow without massive capital. Why didn’t more people step in and at least attempt something similar?

Ulrich Wolters:
Probably because it was just too simple. Karl Albrecht once made a really insightful comment to me: “You know, I’m actually glad I didn’t go to university like you. Otherwise, I might never have come up with these ideas.”

Philipp Westermeyer:
Because it was too easy?

Ulrich Wolters:
Exactly, because it was too easy. You could calculate it all with your hands, so to speak. But the key was consistency. For instance, an idea I’m particularly proud of – because I was heavily involved – was paying people properly.

Back then, I had been part of the management team for two years when I brought up a proposal: “I believe we need to change something across the company. The labor market wasn’t any better back then than it is today – there was a shortage of skilled workers. I said, ‘People aren’t being paid enough, the quality suffers, and I’m not satisfied with that – across all areas.’”

I suggested making a significant move. We discussed it for three months – that was typical of how we made decisions. Then one day, Karl said, “We’re going to do it.”

I admired that so much. Over two years, in 1972 and 1973, we raised all wages and salaries in the company by 25 percent – twice by 12.5 percent. That put us 35 percent above union-negotiated rates and above what other chain retailers were paying at the time.

Of course, I expected it to cost money – not just in terms of payouts. I thought profits might dip for a year or two. But Karl wasn’t bothered by that at all. And the amazing thing? Those negative effects never materialized.

Philipp Westermeyer:
Because productivity increased?

Ulrich Wolters:
Yes, and SÜDdenly we had a completely different caliber of people. Productivity soared, and we supported that with bonuses and other incentives. We ended up with fantastic employees – which wasn’t always the case before.

No one left us because they couldn’t earn anywhere near as much elsewhere. But they also had to work hard, that was clear. Even so, we had an incredible team spirit.

At the same time, we implemented a management system with clear guidelines on how supervisors should treat their employees – for example, how store managers should interact with their sales assistants and cashiers.

Philipp Westermeyer:
So if I understand correctly, the success factors I’ve picked up from you so far are assortment management, incentive structures, and consequently, personnel management. Is that right?

Ulrich Wolters:
Absolutely, very important.

Philipp Westermeyer:
Then there’s this situation with the positive cash flow – what else have I missed?

Ulrich Wolters:
Yes, and we also ensured that leadership positions were filled with highly paid individuals – another key success factor. We had virtually no turnover, except for the turnover we initiated ourselves. I know it might sound harsh, but we also implemented something else back then:

We decided that, from that point on, any leadership candidate aiming for a career at ALDI had to have a university degree. This was completely unheard of in the retail sector at the time. Over the next few years, we hired up to 350 people globally from universities and colleges. It didn’t matter much what they had studied – the key was that they had an academic background.

It wasn’t because a degree made them inherently smarter but because it demonstrated the ability to think critically and understand a leadership system. These individuals became our “talent pool.” For years, we filled every management position internally from this group and never needed to hire an external manager.

Philipp Westermeyer:
Does ALDI have a large hierarchy these days?

Ulrich Wolters:
Today, yes, but back then, no, I’d say. The central administration was very small – just a handful of people. Out in the field, there was basically only the regional managing director. Below them were five authorized officers, each responsible for one of the following areas: administration, sales, expansion, logistics, and procurement. And procurement was entirely regional.

Philipp Westermeyer:
There’s this saying that the key to success in retail lies in procurement – that the magic happens during buying. Was that not the case for you?

Ulrich Wolters:
No, it was different for us. We focused on quality. And then we went fully into private labels. Our products were absolutely comparable – and still are to this day.

Here’s a great example: In the most recent laundry detergent test conducted by Stiftung Warentest in Germany, the results were as follows: First place went to ALDI’s Tandil, second to Persil, and third to Ariel.

Philipp Westermeyer:
Did you, through your procurement, help other companies grow? It often happens when something big and new arises – like ALDI back then or Google today – that other business sectors latch on and grow alongside. Did you make your suppliers successful?

Ulrich Wolters:
Yes, we specifically sought out mid-sized businesses that grew with us and developed products together with us.

Philipp Westermeyer:
Can you name a few companies that you helped grow?

Ulrich Wolters:
Unfortunately, one that recently went bankrupt, which personally hits me quite hard: the company Stute in Paderborn.

Philipp Westermeyer:
What do they produce?

Ulrich Wolters:
They were the largest producer of jams, marmalades, honey, and applesauce. They started small with us, grew alongside us, and always delivered the best quality at great prices.

Philipp Westermeyer:
Why did they go bankrupt?

Ulrich Wolters:
Because ALDI recently decided to take things to another level.

Philipp Westermeyer:
Oh, and then they were immediately out of business?

Ulrich Wolters:
ALDI pulled their orders. For example, they told them: "You need to reduce the price of applesauce by 0.10€." No further explanation.

Philipp Westermeyer:
That can be pretty tough these days.

Ulrich Wolters:
Not tough. Impossible.

Philipp Westermeyer:
But that wasn’t the culture back then?

Ulrich Wolters:
No, no, we had a very clear culture. Those were our partners.

Philipp Westermeyer:
You also helped companies like Medion grow, right? Can you name a few others where you’d say, “Without ALDI, they would never have been as successful”?

Ulrich Wolters:
For instance, there was Dalli – a major supplier that’s still in the market today, particularly for detergents and cleaning products.

Philipp Westermeyer:
What about Haribo?

Ulrich Wolters:
Yes, Haribo was always a strong brand, but also a major partner. ALDI is still Haribo’s largest customer.

Philipp Westermeyer:
And breweries?

Ulrich Wolters:
Beer was never a big business for us because we don’t sell returnable bottles.

Philipp Westermeyer:
What do people buy the most? What’s ALDI’s most important product category?

Ulrich Wolters:
It’s mainly been food. Back then, it was very clearly canned goods and milk, in collaboration with the major dairies. But brands like Bärenmarke wouldn’t have worked with us. Even Henkel wouldn’t have done business with us.

Philipp Westermeyer:
Theo Müller from Müller – he also grew big with you, didn’t he?

Ulrich Wolters:
No, not really. He came along much later. Today, of course, everyone wants to supply ALDI – it’s completely different now. Back then, we mostly worked with medium-sized and small companies, though sometimes also with some strong, larger ones.

For example, we started an own-brand business early on with Nestlé, the largest food company in the world. They said, "We need to tap into this market too." For us, they produced Express Café. It didn’t say Nestlé on it, but Alio – our own brand.

Philipp Westermeyer:
What’s the power dynamic like in those situations – between you and a giant like Nestlé? If someone could sit in on one of those procurement meetings, who really calls the shots?

Ulrich Wolters:
When it works well, I’d say it’s both sides. You can’t just swap out a supplier and say, "I’ll find someone else who can deliver 30 trucks of a specific product every week." That’s not realistic.

I remember a fascinating experience when I was summoned to the Monopolies Commission in Berlin. Five people sat in a row, and I was all alone on a little chair. They said, "We want to talk to you about the market power of retail and the abuse of this power. For example, when suppliers are pressured: 'If you don’t lower your price, you’re out.'"

So, I gave a passionate speech about partnerships – like a marriage. I explained that we’re dependent on each other, and one side can’t function without the other. We needed suppliers for their flexibility and sophisticated logistics. Ideally, we wanted all products delivered in full truckloads.

Take Stute, for example – they also made juices before they had to close down. Their production was the best I’ve ever seen – including for marmalade. In their juice production, they had an engineer on every shift, and their trucks were loaded in just three minutes. It was sensational.

Philipp Westermeyer:
Wait, you’re telling me that’s how it really happened? You’re not going to tell me now that if you share this story, sellers across the country will turn around and say, "Oh no, that’s not how it was at all!"

Ulrich Wolters:
Absolutely not. We always had a good relationship. Of course, we negotiated prices, but it was more of a joint effort: "What can we do to streamline production further?"

Philipp Westermeyer:
Germany has one of the lowest food price levels in the world, largely thanks to ALDI, right?

Ulrich Wolters:
Let me tell you a story that illustrates how we thought back then. There was a massive crisis once – the so-called Glycol Scandal. Austrian wine had been "improved" with glycol. Glycol is sweet; it’s the antifreeze you put in car radiators. It’s not toxic, but of course, it’s not permissible.

At the time, health departments couldn’t detect glycol in their tests. But then analytical methods improved, and with color chromatography, they were able to distinguish glycol from sugar or natural sweetness. That was when the scandal exploded.

We had Austrian wine in our stores, and our customers had it at home. Within two weeks, we took back two million bottles from our stores. Every customer got a full refund.

The two million bottles came from a bottler near Stuttgart, who still exists today. Back then, the wine was delivered in tank trucks, certified by the Republic of Austria, and bottled before being sent to us.

So, what did the supplier do with the two million returned bottles? They couldn’t be sold anymore. They had to be uncorked, poured into containers, and eventually turned into industrial alcohol.

Philipp Westermeyer:
What exactly is industrial alcohol?

Ulrich Wolters:
It’s wine that gets repurposed for industrial purposes – not for drinking. By all reasonable measures, that supplier was on the brink of bankruptcy. It was a family business.

I personally flew to Stuttgart, met with the two brothers who owned the company, and said, "Okay, let’s sit down and figure out a solution." They showed me their financials, and I ended up granting them a loan – I believe it was two or three million euros.

This was a loan as their customer, with the lowest possible interest rate, and I simply asked them to pay it back over the next few years. That’s something a customer usually doesn’t do.

Philipp Westermeyer:
That’s very entrepreneurial thinking – recognizing, "We’re in this together, we want to grow together, and we need you."

Ulrich Wolters:
And today, I’m proud to say that they’re still around. That company wouldn’t have survived otherwise – it’s a genuine family business.

Philipp Westermeyer:
Did ALDI ever invest in marketing?

Ulrich Wolters:
Very sparingly. I’ve thought about it a lot, because we often discussed marketing. Don’t take this the wrong way, but during my time, we didn’t have a marketing department.

Philipp Westermeyer:
I mean, even the name itself is relatively simple from a branding perspective – "ALDI," short for "Albrecht Discount."

Ulrich Wolters:
Exactly.

Today, things are different, I get that.

Someone once asked me, "Where’s your marketing department?" And I replied, "In the back of my head."

Philipp Westermeyer:
You didn’t do any TV advertising or anything like that?

Ulrich Wolters:
No, that wasn’t possible back then – it was too expensive. Plus, it wasn’t feasible because there were two ALDIs. Today, they do collaborate, albeit with two different logos, but they now handle advertising together.

That said, we did do some advertising back then. Those beautiful, full-page flyers and newspaper ads. They listed about 150 products with their prices, and every single one was cheap. Nobody undercut us in the market. We were always the cheapest.

Philipp Westermeyer:
How did you determine your pricing?

Ulrich Wolters:
We always oriented ourselves to the market – no classic cost-plus pricing, like, "This costs €1, so I’ll add €0.40 to hit my EBIT target." Instead, we worked with a gross margin. Back then, it was around 20%. No one else could manage that, because our cost structure was incredibly efficient.

When I left the company, our personnel costs in Germany were just 6% of revenue – despite paying high wages. Our level of efficiency was simply unmatched.

Philipp Westermeyer:
You didn’t leave entirely, though. At some point, you moved to the board of the Siepmann Foundation, right? That’s the foundation that holds ALDI SÜD’s shares. Named after Mr. Albrecht’s mother – her maiden name was Siepmann, if I remember correctly. So, the Siepmann Foundation. You also served on the supervisory board for a while, didn’t you?

Philipp Westermeyer:
So, during your active time, Karl Albrecht was the chairman of this family foundation, which was originally called the Karl Albrecht Foundation, right?

Ulrich Wolters:
Yes, exactly.

Philipp Westermeyer:
At some point, the name was changed?

Ulrich Wolters:
Yes, and here’s what happened: When it came to security and confidentiality, we always had very strict guidelines. My first major experience in my new role happened in 1971. I started on October 1 in Mülheim, and in November, Theo Albrecht was kidnapped.

He was the first adult in Germany to be kidnapped. He was held captive for 18 days. Initially, there was a lot of chaos because people thought it was the RAF. But it turned out it was a lawyer and a criminal who had teamed up. They kidnapped Theo Albrecht and locked him up in the backroom of the lawyer's office.

For 18 days, he sat there in just his undershirt. That case triggered all sorts of alarm bells. The lawyer was clever enough to communicate with Mrs. Albrecht in the style of the RAF to confuse everyone.

Philipp Westermeyer:
Was ransom paid?

Ulrich Wolters:
Yes.

Philipp Westermeyer:
And then he was released?

Ulrich Wolters:
Yes, and that part is interesting. We only learned about this later. Theo Albrecht quickly realized that they didn’t intend to kill him, which would’ve been different with the RAF, of course. So, he started negotiating the ransom himself – and quite successfully. Originally, they demanded 30 million Deutsche Marks.

Philipp Westermeyer:
How much did they get?

Ulrich Wolters:
7 million.

Philipp Westermeyer:
Did the kidnapping change him as a person?

Ulrich Wolters:
Not at all. It didn’t bother him. He didn’t undergo any trauma therapy or anything like that – absolutely nothing. But you have to remember, he had been in the war, in Africa. That sort of experience didn’t impress him much.

It was fascinating: the whole ordeal didn’t change him. Of course, the security measures were tightened – no public appearances, no photos. There were no images of him or his brother anywhere.

Philipp Westermeyer:
They were essentially the richest people in Germany during that time, right?

Ulrich Wolters:
Yes, that’s what people said. But how rich they actually were – no one really knew. It was all just estimates. Nobody knew the exact sales figures, and nobody really had concrete information. Nowadays, you can find all of that in public records.

Back then, we also had a unique corporate structure. At one point, there was a new EU directive that required all companies – except for limited partnerships – to disclose their financials.

We found a very clever solution. The foundation had already been created, which was a very wise move. Karl Albrecht established the foundation and transferred almost all of his shares – except for one percent. That was when he was exactly 53 years old. I found that incredibly remarkable.

However, he didn’t transfer everything to the foundation. He gave 75% to the foundation, which at the time could be done inheritance- or gift-tax-free, thanks to certain valuations. The remaining 25% was split equally between his two children.

Philipp Westermeyer:
What was the purpose of the foundation? What was done with the money?

Ulrich Wolters:
It wasn’t a charitable foundation but a family foundation, meaning it paid corporate taxes.

Philipp Westermeyer:
But its main purpose was to hold shares?

Ulrich Wolters:
Exactly.

Philipp Westermeyer:
And then you eventually became involved with it. Actually, let me ask something else since we’re talking about personnel. There’s this legend that ALDI deliberately set up separate entities quickly to avoid co-determination rights. Is that true?

Ulrich Wolters:
That was never really a concern for us. It might have been a side effect, but it wasn’t something we did deliberately because I wasn’t afraid of that at all. None of our operations ever had a works council.

The employees would say, “We don’t need one. We’re treated well.” If someone from HBV – now Verdi – came by and said, “Can I talk to your staff?” the response was, “Get lost, we don’t need you.”

They were earning 35% more than what the unions had negotiated and were well taken care of.

Philipp Westermeyer:
So, we were just saying you transitioned into the foundation and led it for a while, right?

Ulrich Wolters:
That was a very important step for me personally. It wasn’t something I had planned – I would have probably just continued in my previous role. But then, completely out of the blue, Karl approached me and asked, “Can you see yourself becoming my successor? I want to step down from this position, even though it was originally meant to be for life. I’d like to withdraw further. Could you imagine taking it on?”

I said, “Why not?” It was a huge show of trust from him. It wasn’t just like being a chairman of the supervisory board – it was almost like being the principal owner. It was a fascinating position.

And then, for the first time since I started working, I actually had time. It was like being a supervisory board chair – I had more freedom and could even take on other projects.

Philipp Westermeyer:
And was it never considered that someone from the family – like his children – would take over the position?

Ulrich Wolters:
Oh, that was definitely discussed. Karl was very clear from the start: he envisioned me holding the position for five years and then passing it on to his daughter. He felt she wasn’t ready yet because at the time she was raising six children.

She became my deputy for those five years, with the explicit understanding that I would hand over the role to her afterward. Following that, I stayed on for another five years as a consultant, but without an official position.

Philipp Westermeyer:
Looking back, could you have imagined – or can you imagine today – building something similar again?

Ulrich Wolters:
A year ago, I would have said no, I can’t imagine it. But now, I do see gaps where an intelligent system could thrive. A good example is the company Action.

Philipp Westermeyer:
We’ll talk about Action in just a moment.

Ulrich Wolters:
Yes, but it’s something I wouldn’t have thought possible before.

Philipp Westermeyer:
But what about concepts like Picnic and Gorillas, and those types of approaches?

Ulrich Wolters:
That’s a completely different topic. It’s interesting because there’s a fundamental flaw in the thinking. If I’m selling groceries that are priced very low – sometimes with almost no margin – and then delivering them all the way to the customer’s home without charging a fee, it just doesn’t add up. You don’t need a degree to figure that out.

Think about what the customer does in the store: First, they pick their own groceries. They walk down the aisles, fill their cart, and do the selection work themselves – for free.

Then, they pay, push the cart to their car, load the groceries into the trunk, drive home, unload them, and bring them to their kitchen or basement. Again, they’re not paid for any of that.

If I SÜDdenly say, "We’ll handle all of this for you," without charging for it, then you’re taking on all those steps but not getting paid for the effort. That can’t work.

Philipp Westermeyer:
Why wasn’t that obvious to all those investors over the past few years? It sounds so straightforward.

Ulrich Wolters:
I never understood it. Years ago, I discussed this with an expert, and we concluded that the real cost of such a service is somewhere between 15 and 20 euros per order. That’s not accounted for in the pricing.

It’s different if I’m selling devices or textiles from a company like Zalando. Those products have a completely different margin.

Philipp Westermeyer:
Let’s shift gears for a moment. I’ll provide some context: I wasn’t familiar with Action for a long time either. But in preparing for this conversation, I discovered that there are now 500 Action stores in Germany and several thousand across Europe.

It’s a Dutch concept, and you were involved from the very beginning or at least very early on – as an advisor to the Dutch founder of Action.

Ulrich Wolters:
Early, yes, but not with the founders. Action was actually started by three individuals – a very intelligent concept. The original idea was somewhat similar to ALDI, but focused entirely on the non-food segment.

Action only has a very small food section – a bit of cola, some snacks, mostly in the convenience category. These three founders built it up, and then they got an offer, which they accepted. They sold Action for 300 million euros.

Philipp Westermeyer:
To an investor?

Ulrich Wolters:
Yes, to 3i.

3i is a well-known private equity or venture capital investor. They took over Action, and that’s been the deal of the century for them.

Ulrich Wolters:
Initially, they didn’t fundamentally change the concept. They simply said: "Now we grow."

Philipp Westermeyer:
It started as a Dutch company, correct?

Ulrich Wolters:
Yes.

Philipp Westermeyer:
What exactly is the concept? Is it just a mix of various products sold at very low prices?

Ulrich Wolters:
It’s non-food – around 6,000 items in total. There’s a significant turnover in the assortment, with only about half of it being standard inventory. The rest is constantly changing, with new offers every week.

Philipp Westermeyer:
Name a few typical items they sell.

Ulrich Wolters:
Household items, toys, office supplies. Then a bit of DIY, and some textiles – but only basic textiles.

Philipp Westermeyer:
That sounds like a completely absurd mix.

Ulrich Wolters:
Yes, that’s how it evolved. They have 14 categories, which are quite diverse. One of them is called "Food," but it only makes up about 10% of the business – mostly convenience products, I’d say.

The rest is all non-food: everything from pans and towels to doormats and toilet brushes.

Philipp Westermeyer:
But everything in the price range of 1 to 3 euros, roughly?

Ulrich Wolters:
Well, it goes up to about 10 euros, and a household pan might even cost 15 euros. But that’s about the limit. They have an excellent price-to-value ratio.

And what I can tell you is that their procurement works fantastically. For example, during the pandemic, when everyone was saying that goods were scarce, they organized everything brilliantly. They had their own freight agreements with Maersk, the largest shipping company, and rented container space at fixed prices.

The containers rolled in from the Far East, and they always had product availability above 95%.

Philipp Westermeyer:
But tell me the story. You got involved after the founders sold the company fairly early on. There were a few stores in Holland, and then it was sold?

Philipp Westermeyer:
And the first six stores in Germany?

Ulrich Wolters:
Yes, exactly.

Philipp Westermeyer:
Okay, and how big are they today?

Ulrich Wolters:
Today, they have 2,600 stores in 12 countries across Europe.

Philipp Westermeyer:
And I believe they generate over a billion in earnings?

Ulrich Wolters:
No, it’s actually double that.

Philipp Westermeyer:
Two billion in earnings, and they were sold for 300 million?

Ulrich Wolters:
Yes, and now they pay out 800 million annually in dividends to their investors. It’s a bit complex, but they generate that kind of cash flow every year.

Philipp Westermeyer:
So, did you get involved during this acquisition phase?

Ulrich Wolters:
No, no, I came in later. Here’s how it happened: Peter Lutz, the 3i managing director in Germany, called me. Do you know him? From Frankfurt. I’ve known him practically since his birth – his father was one of my longtime friends.

Peter called me and said, "Do you have an hour? I’d like to send a colleague of mine to meet you." Then one of his colleagues from Amsterdam, who is a partner at 3i, came to see me.

He explained the concept to me and even showed me a store, which I hadn’t seen before. I had no idea about this concept prior to that, but I was incredibly impressed.

So, I said, "Yes, I can imagine getting involved with this." That was about eleven years ago.

Philipp Westermeyer:
And did you invest in it?

Ulrich Wolters:
No, unfortunately not.

Philipp Westermeyer:
But you consulted for them?

Ulrich Wolters:
Yes, they offered me a consulting contract, which was very well-paid. But looking back, I should have said, “Give me shares instead.”

Philipp Westermeyer:
What’s Action worth these days, approximately?

Ulrich Wolters:
On 3i’s balance sheet, the company is listed at 24 billion euros.

Philipp Westermeyer:
For a company they purchased for 300 million, that’s quite a leap.

Ulrich Wolters:
Yes, 24 billion.

Philipp Westermeyer:
So, this is essentially the new, massive retail concept that’s sweeping across Europe?

Ulrich Wolters:
There’s nothing like it in Europe. And meanwhile, many others are closing down. Galeria and similar businesses won’t survive – I’m absolutely convinced of that.

There are a few others in this sector, yes. For example, we have Woolworth, which now has about 500 stores in Germany. Then there’s Tedi, founded by Stefan Heinig, the same entrepreneur who built up Kik.

So, there are competitors, but I’d say Action has the best concept.

Philipp Westermeyer:
What’s the magic behind Action? Is it the assortment?

Ulrich Wolters:
It’s definitely the assortment, but also the constant rotation. They’ve understood that running an online business doesn’t make sense with their model. If you’re selling a charging cable for €1.59, you can’t also ship it for free – that just doesn’t work.

They’ve tested an online shop in Holland and Belgium where they sell higher-value products, and it’s been successful and profitable. But that has nothing to do with their core business. The main concept remains purely brick-and-mortar.

Why do people visit every week? It’s the assortment and the fact that there’s always something new. Honestly, their advertising isn’t great – there’s room for improvement. But so far, they haven’t needed it.

Right now, just to give you an idea: This year, after the pandemic, they’ve seen a 20% increase in revenue compared to the previous year. And that’s without raising prices – in fact, they’ve even lowered some prices.

Philipp Westermeyer:
Do you think part of the reason is that many people who analyze the economy don’t really take the ultra-low-price segment seriously or fully understand it?

Ulrich Wolters:
Yes, and the current economic situation has been a good time for discounters like ALDI and Lidl. They’re doing very well right now – much better than Edeka or Rewe.

When people get used to shopping at lower prices, why would they stop? On top of that, there’s a resurgence of private labels. Like I said earlier: If I can buy a laundry detergent for €2 less, the same quantity, and it’s a test winner, then I’ll use that. Why would anyone pay more for Persil?

And this logic applies to many other categories as well.

Philipp Westermeyer:
But there are millions of people who still buy Persil. So it’s not entirely perfect, is it?

Ulrich Wolters:
Of course, otherwise, you’d have the market all to yourself. But you wouldn’t want that – competition is always good, right?

Philipp Westermeyer:
So this low-price segment is just much more powerful than people might think?

Ulrich Wolters:
Yes, absolutely.

Ulrich Wolters:
And it keeps growing. I assume we’ll enter at least one new country every year. This spring, for example, it was Portugal.

Imagine this: In a town near Porto, you open the first Action store. There’s no big advertising campaign, just a few balloons put up – and on the first day, 2,700 customers show up.

Philipp Westermeyer:
What draws people in? Is it the price? Is price the main argument?

Ulrich Wolters:
Yes, and partly because people already know about it. In Portugal, for instance, they hear about Action from their friends. There’s a massive Portuguese community in Luxembourg – hundreds of thousands of people. They tell their friends, "When Action comes, you have to check it out."

And next, we’re heading to Switzerland. That will be exciting because prices there are so high. After that, Romania is on the list.

Philipp Westermeyer:
And the USA?

Ulrich Wolters:
I was with the management team a few weeks ago, and we decided to take the plunge – we’re going to the USA.

Philipp Westermeyer:
Really? Aren’t you worried about the Chinese players like Temu and Shein? That seems a bit comparable, doesn’t it?

Ulrich Wolters:
Not at all. Anyone who looks closely knows that the quality from Temu and Shein is generally poor. Sustainability? They don’t even know what that means.

Frankly, it should be much faster to put a stop to this business model. Here’s what they do: They take a single T-shirt, pack it in an envelope, and ship it directly with subsidized postage from China to the customer in Germany.

The German customs system can’t even process it properly. They don’t pay any duties. Is that right? In my opinion, absolutely not.

Philipp Westermeyer:
Do you think the Temu and Shein phenomenon will resolve itself?

Ulrich Wolters:
Yes.

Philipp Westermeyer:
You mean the same way Gorillas went under?

Ulrich Wolters:
Exactly, I believe so.

Philipp Westermeyer:
And what about Alibaba and others like it?

Ulrich Wolters:
I’m very skeptical about them as well. Let me be clear: Price is great, but there has to be solid quality behind it – that’s my stance.

Philipp Westermeyer:
How many Action stores could there eventually be in Germany? There are 500 now – could it reach 3,000?

Ulrich Wolters:
I’d estimate somewhere between 2,000 and 2,500 stores.

Philipp Westermeyer:
In the next 5–6 years?

Ulrich Wolters:
Yes, we’re opening as many stores as we possibly can. This year, it’ll be 65 – that’s actually below what we’d like to do. But everything has to align: A location needs to be leased, remodeled, and the logistics have to be ready.

The logistics at Action are quite interesting. Their warehouses are all at least 50,000 square meters, and the largest is 100,000 square meters. They have a significant advantage over food retailers because there are no perishable goods. That allows for longer transportation distances.

Philipp Westermeyer:
I really need to check one of these stores out.

Ulrich Wolters:
You’ll even notice them on the highways. The trucks are double-deckers and make full use of the cargo space, practically all the way down to the axles.

Philipp Westermeyer:
You mean the trucks themselves?

Ulrich Wolters:
Yes, they have two levels because the goods don’t weigh much. They pack the trucks completely full – no one else has thought of this approach.

And they always run fully loaded trailers. Every store is designed with a ramp so an entire trailer can be unloaded at once.

Philipp Westermeyer:
What’s the endgame for Action? Will 3i eventually exit, or do they plan to stay?

Ulrich Wolters:
Not at the moment, no. But at some point, they’ll have to exit because Action now accounts for, I think, 62% of their total portfolio.

For a private equity firm, that’s not an ideal mix. But everyone in the industry admits: There’s nothing else like it out there.

So for now, they’ll keep going. But there’s really only one way forward: They’ll eventually have to go public, likely in segments. With a valuation of 24 billion now, and probably 30 billion next year – no one can afford to buy it outright.

Philipp Westermeyer:
What do you mean by "no one can afford it"?

Ulrich Wolters:
Who’s going to buy it?

It’ll probably involve taking parts of the business public. That seems to be the likely route. But for now, there’s no talk of that – not with the kind of growth they’re seeing.

Philipp Westermeyer:
So they’re keeping it private for as long as possible?

Ulrich Wolters:
Yes, exactly. And as I mentioned, the numbers I just quoted don’t even include the U.S. There, I could easily see thousands more stores opening.

Philipp Westermeyer:
Does 3i own 100% of Action?

Ulrich Wolters:
No, 3i brought in other investors, but they hold the majority and have control. The others are essentially just financial backers.

Philipp Westermeyer:
Have you ever heard of Hellman & Friedman?

Ulrich Wolters:
Yes, exactly – they had shares in ProSiebenSat.1 Media SE.

Philipp Westermeyer:
Right, I remember that.

Ulrich Wolters:
Yes, they’re the ones. A few years ago, they casually invested 500 million. One of their partners even sits on the board at Action.

He’s probably laughing himself to sleep – even though he doesn’t know much about retail. But the dividends they’re receiving are absolutely incredible.

Philipp Westermeyer:
Looking back on your life, what are the top 10 retail concepts you’ve ever seen? Is ALDI number one?

Ulrich Wolters:
Yes, and the second I’ve already mentioned: Action. In other areas, of course, there’s Amazon. I have to admit, it’s impressive. But there are aspects of Amazon I don’t respect.

For instance, the way they treat people on their marketplace – Amazon can be quite ruthless. It’s often brutal.

And here’s something else that’s important to me: We talked earlier about respect for people. Amazon isn’t exactly a poor company, but in Germany, they don’t even pay union rates in their big warehouses – they’re below collective agreements. I don’t think that’s right.

Philipp Westermeyer:
Did you ever meet anyone from Amazon? Did you have any exchanges with them?

Ulrich Wolters:
No.

Philipp Westermeyer:
So, even if you’re building something as massive as ALDI, there’s no opportunity to collaborate or exchange ideas with Amazon?

Ulrich Wolters:
We actually didn’t exchange ideas with anyone.

Philipp Westermeyer:
That was part of the ALDI philosophy, right? You do your own thing, focus on yourself, and nothing else?

Ulrich Wolters:
Yes, and I still believe that today. We were always proud that we knew our business better than anyone else in our sector. In all those 30 years, I didn’t bring a single consultant into the company.

Philipp Westermeyer:
No McKinsey or anything like that?

Ulrich Wolters:
None at all. We already knew better.

Philipp Westermeyer:
We were talking about number three, Amazon. What else comes to mind? What would be next on your list?

Ulrich Wolters:
Well, I’d also have to include Walmart. What they’ve built is absolutely gigantic – just in terms of scale. Their stores are also quite interesting.

Of course, there are a few others as well.

Philipp Westermeyer:
Rossmann?

Ulrich Wolters:
Yes, and DM would also belong in that category. What impresses me even more about DM is their philosophy – they have a very strong one.

However, it’s worth noting that they’ve never really made a lot of money. Typically, they operate on a profit margin of about 1% of revenue – which, for the drugstore business, isn’t exactly ideal, in my opinion. But they still do an excellent job.

Philipp Westermeyer:
Are there any other retail concepts where you’d say, “That’s a good one”? I think I’ve already gathered that you don’t believe in Galeria’s future. Is there anything more modern you see and think, “This is a great concept”? Shein and Temu don’t seem to be on your list either.

Ulrich Wolters:
No, but of course, there are specialty stores. Retailers like Zara and H&M come to mind. Even though H&M has faced some challenges recently, these are still solid concepts.

They’ve essentially taken over the role of the Galeria department stores. Did you know that Karstadt used to be the largest textile retailer in Germany?

Philipp Westermeyer:
I didn’t know that.

Ulrich Wolters:
They used to sell more men’s suits than anyone else. That’s not the case anymore.

But yes, there are other specialty stores. We’ve already touched on this today – the market for DIY stores, like Obi and other home improvement chains, is well-established.

That said, from my perspective with Action, I’d say these stores often have quite good margins in certain categories. That makes them relatively easy to undercut.

Philipp Westermeyer:
Okay, so if an entrepreneur is listening right now and looking for a new retail idea, would you say targeting DIY stores in the low-price segment could be a good opportunity?

Ulrich Wolters:
It’s not that simple. DIY stores come with their own challenges, such as assortment management, regional differences, and so on – it’s not straightforward.

And as you mentioned earlier, purchasing is absolutely critical, and I can only confirm that. At Action, for instance, we have an incredible CEO.

Two years ago, we celebrated her 25th work anniversary. We organized it in the canteen, with all the employees wearing blue shirts with the Action logo. At that anniversary, she was just 42 years old.

She started at 17, stacking shelves after school for the founders.

Philipp Westermeyer:
And now she’s leading seventy thousand people?

Ulrich Wolters:
Yes, and she’s doing a fantastic job. She knows the company inside and out.

Philipp Westermeyer:
A Dutch woman?

Ulrich Wolters:
Yes, she’s Dutch. When I met her over ten years ago, she was the head of store operations. Later, she moved on to another role.

I believe she then spent four years managing the department where everything converges – purchasing, marketing, logistics, and so on. During that time, she really positioned the company excellently. She did an outstanding job.

Philipp Westermeyer:
Final question, Uli: Over the years, as I’ve gathered, you’ve done quite well financially. Have you invested in other concepts, the stock market, or what do you do with it?

Ulrich Wolters:
Yes, I still mentor several young companies. In one or two cases, it’s related to medicine. Around 20 years ago, I founded something directly opposite the Karstadt headquarters in Essen: the Präventikum.

It’s a clinic for preventive medicine. To date, we’ve treated over 100,000 people.

Philipp Westermeyer:
So you’re also a clinic entrepreneur?

Ulrich Wolters:
Yes, and alongside a friend, I’ve built a chain of physiotherapy centers. We currently operate 70 centers.

This is a field that hasn’t been widely consolidated yet. It’s mostly run by individual entrepreneurs or small practices.

We’ve brought together 70 of these facilities with the aim of industrializing the market – using modern IT systems and establishing our own contracts with health insurance providers. That’s something an individual practice simply can’t achieve.

Philipp Westermeyer:
So you’re financing all of this?

Ulrich Wolters:
Partially, yes. I’m involved as an investor alongside my friend.

And, as I briefly mentioned earlier, I’m also advising someone who’s planning to launch a chain system for tax consultancy offices. That’s another intriguing concept.

Philipp Westermeyer:
And are you invested in that too?

Ulrich Wolters:
Yes.

Philipp Westermeyer:
But when it comes to the stock market – like Amazon or similar – you didn’t jump in early?

Ulrich Wolters:
No, I was never really interested in that. I still enjoy working with young people and building something from the ground up.

I know it might sound odd, but money doesn’t matter much to me.

Philipp Westermeyer:
Well, you certainly have enough of it.

Ulrich Wolters:
I don’t lack anything. Building something meaningful brings me much more joy – that was the case at ALDI too.

For example, Metro once wrote to me, asking me to join them. Salary? They said I wouldn’t need to negotiate; I could just write a number on a piece of paper, and they’d pay it. It didn’t interest me.

There’s another topic as well: the quality of leadership. Out of the roughly 80 people who made up the top three levels of management worldwide, only one person left in 30 years. Just one.

And that’s despite the fact they were constantly receiving offers. The standard pitch was always "double income" – they could have earned twice as much immediately, at Lidl, Metro, or back in the day, Kaufhof or Karstadt. But they all stayed.

The one who left was a good man in England. He got an offer to become the sole CEO of the largest supermarket chain in New Zealand. And, well, if you’ve ever been to New Zealand – yeah, I’d want to live there too.

That wasn’t the end, though: after America, we expanded to England. Today, ALDI is the fourth-largest player in the UK market.

Philipp Westermeyer:
In the UK, with ALDI?

Ulrich Wolters:
Yes, and then we moved into Ireland. Amazing people there – the Irish absolutely love ALDI.

My last big active project was something many found strange. I said, "Now we’re going to Australia." We truly started from scratch there, with just two stores in Sydney. That was over 20 years ago.

Today, there are more than 600 ALDI stores in Australia.

Philipp Westermeyer:
And why didn’t they do it themselves?

Ulrich Wolters:
Nobody had done it. In Australia, there were two dominant players. One is called Woolworths – not connected to the Woolworth we know here. It’s the largest supermarket chain there.

Then there’s Coles Myer. They sort of leaned back, both making good money, and together, they held around 60–70% of the market.

Then we came in – and now things look a little different.

Philipp Westermeyer:
And what’s your relationship with Edeka or Rewe? They probably don’t like you very much, do they?

Ulrich Wolters:
Oh no, I’d say it’s quite relaxed today. They’ve come to accept us by now.

I have a lot of respect for those two chains, especially Edeka. And for a specific reason: they can do something that neither ALDI nor Lidl can.

An entrepreneur running an Edeka or Rewe store – or even several – is a completely different personality than a store manager. They’re true entrepreneurs. They have a unique relationship with their customers.

What I mentioned earlier – they don’t need to be taught that. It’s their business. They still decide what’s in their assortment. They don’t have to sell everything Edeka or Rewe offers.

And they’re deeply rooted in their local communities. They’re independent entrepreneurs who leverage the advantages of the larger network – like IT, and so on.

So yes, they absolutely have their place. And generally speaking, they perform better than the so-called corporate-owned stores.

Philipp Westermeyer:
So, corporate-owned stores don’t perform as well as those run by independent entrepreneurs?

Ulrich Wolters:
Exactly.

Philipp Westermeyer:
Thank you very much.

Ulrich Wolters:
You’re welcome.

Philipp Westermeyer:
This has been incredibly fascinating.

Ulrich Wolters:
Did you learn something new?

Philipp Westermeyer:
Yes, absolutely. I feel like I’ve gotten a glimpse into a rich and impactful life.

Ulrich Wolters:
And just so you know, I’m not done yet. I used to think people my age...

Philipp Westermeyer:
How old are you now?

Ulrich Wolters:
82.

In the past, I would’ve said that’s a very old man. Now I feel like I’m just in the middle of life.

Philipp Westermeyer:
Honestly, you come across as incredibly vibrant and full of energy. What’s your secret?

Ulrich Wolters:
Enjoying work and enjoying people.

I never had to deal with much frustration in my career.

Philipp Westermeyer:
But you’re not doing anything special in terms of sports or diet?

Ulrich Wolters:
Well, I play golf and ride my bike, but not excessively. I’ve been playing golf for 50 years, for example. Golf is actually quite interesting – people often say those who play golf aren’t very hard-working. You know the saying: "What’s your handicap?" If it’s low, it reflects how many days you work.

For me, it was different. When I joined the company’s leadership, Karl Albrecht asked me: "Do you want to play golf?" I said, "Sure, why not?" And he replied: "You have to play with your wife too, because playing alone is pointless – golf is a family sport." I said, "Why not?"

He arranged for me to become a member of the Essen Golf Club. I’ve been a member there for 50 years now.

He even reminded me a few times and seriously said: "You need to take half a day during the week to go play golf." And I replied: "You can do that; I can’t. I don’t have the time."

And a bit of it is certainly genetics, but I think if you find joy in what you do, if you love learning – today something new, tomorrow something else – it’s so much better than sitting at home thinking about getting older.

That keeps me going, and I enjoy it.

Philipp Westermeyer:
Thank you so much.