Explains business history using overlaysfrom @douggrindstaff

Transcript

That quarter you put in Aldi's shopping cart explains everything about why its owners bought Trader Joe's, which sounds bizarre because these two stores good nothing alike, but by the end of this the quarter will make perfect sense to you. This is part two on the Aldi brothers. After Theo and Carl split over cigarettes, both sides sides eventually made their way to America. Carl's side opened Aldi, but in 1979, Theo's side bought a little California grocery chain called Trader Joe's. Its founder, Joe Colombe, had an interesting parallel to the Albrecht brothers. After serving in the Tier Force, Colombe noticed the GI Bill created this growing population college educated Americans with increasingly sophisticated better, but not necessarily a sophisticated income. He referred to them as over educated and underpaid. So he built Trader Joe's specifically for that person. Now, here's the fascinating parallel. The Albrecht brothers also came home from war to a very changed economy, except it was in a devastated Germany where the people had very little money. So they built Aldi around extreme efficiencies and low prices. Both built grocery stores for price conscious customers following the same war. And a few decades later, one bought the other's company. But you'll notice today, the stores feel very different. Aldi is bare better. They leave their products in their original shipping boxes, and they make you bag your own groceries. Trader Joe's has Hawaiian shirts, cookie butter, and frozen orange chicken with seed oils. But underneath, they're remarkably similar businesses. Both carry far fewer products than a traditional supermarket, and they both rely heavily on private label. This gives them a profit margin that most grocery stores operating at 1% couldn't dream of, which brings us back to that quarter. You return your own car no Aldi needs fewer employees collecting them. The quarter is yet another way they reduce the need for labor, and it's indicative of the Aldi philosophy. Eliminate worst the customer doesn't value. Trader Joe's uses similar economics, but rank them in a completely different customer experience, targeting a completely different customer. And as someone who sells businesses for a living, that's what I love about Theo buying it. You should always look to buy buy businesses where your existing knowledge gives you an unfair advantage. In part three, the grandkids sue each better, and that lawsuit is the reason Aldi might become one company again for the first time since 1961. Follow so you don't miss