The Aldi Family Feud And Its Connection to Trader Joe's

From Rubble to Riches

On the heels of World War II, brothers Karl and Theo Albrecht returned to their war-torn hometown Essen, Germany, and transformed their mother’s corner store into a multinational grocery empire. They called it Aldi, short for Albrecht Discounts. Today, their stores number in the thousands, stretching from Europe to Australia and the United States, where Aldi also controls Trader Joe’s (yep, Aldi owns Trader Joe’s). Despite their success, the Albrecht family has also been prone to family feuds, tiffs, and legal disputes that continue to affect Aldi, Trader Joe’s, and the future of the family’s fortune.

The “Aldi Equator”

That story starts in the early 1960s. The two brothers had already revolutionized the supermarket industry, having opened Germany’s first self-service grocery store in the image of the Memphis-based Piggly Wiggly chain. But the brothers reached an impasse.

While Theo wanted to stock cigarettes, Karl thought that carrying them would attract shoplifters, according to the Guardian. Rather than compromising, the brothers split the brand and its 300 stores into two branches in 1961, with Theo ruling in the south and Karl overseeing the north. Aldi Süd and Nord continued to collaborate, but the two branches are distinct entities with their own logos, products, and management styles.

Aldi Expands Despite Split

In the face of their cigarette dispute, Aldi stores flourished and the Albrechts amassed billion-dollar fortunes. That’s in part thanks to the brothers’ expansion in the U.S., where Karl planted his Aldi Süd flag in 1976 and Theo purchased Trader Joe’s in 1979.

Photo credit: Ralph Orlowski / Stringer / Getty Images

The secret to the Albrechts’ success here and abroad has been their commitment to frugality and lower prices. Even in the U.S. — where some of Aldi’s cost-cutting measures are less common — consumers are encouraged to bring their own shopping bags, and products are displayed in the containers they were shipped in. At both Trader Joe’s and Aldi, most of the goods are also discounted private-label products, some of which are the result of supplier partnerships.

In 2022, Aldi continues to grow, even after Karl and Theo’s deaths. According to Grocery Dive, the discounter was the fastest-growing chain in the U.S last year in both square footage and new stores. Those recent additions have made Aldi the nation’s third-largest grocery chain by the number of stores, only behind Kroger and Walmart. But behind the curtain, it hasn’t been smooth sailing for the family business on the Aldi Nord side.

The “Merry Widow”

The death of Theo Albrecht’s second son, Berthold Albrecht, in 2012 triggered the current fight over the $17 billion Aldi Nord (and Trader Joe’s) fortune. Babette Albrecht, Berthold’s widow, is at the center of the feud, as key members of the Albrecht family have accused her of lavishly spending the family’s money. The German media even began calling Babette the “lustige Witwe,” or merry widow, because her appearance and personality so starkly contrast the rest of the typically staid and frugal Albrecht family.

Case in point, Cäcilie Albrecht, Theo’s late wife, cut Babette and her grandchildren out of future business decisions in her will.

“With this document I undertake to ensure the preservation of the philosophy of our family, which is to serve the consortium Aldi Nord and to foster this, at the same time as setting aside self-interests and practicing a modest and abstemious way of life,” Cäcilie wrote, according to the Guardian. 

Ouch.

Embezzlement Charges

The most recent legal dispute between Babette and the rest of the Albrecht family stems from Berthold’s will, which limited his wife’s and his children’s control of the three foundations that hold the company’s wealth, the Guardian reports. 

The feud escalated in 2020, when Nicolay Albrecht, Babette’s son, sued his mother, sisters, and their lawyer for embezzlement, claiming that they used their boardroom influence to violate the family trust and improperly withdraw millions of euros. To make matters more complicated, the German outlet Merkur reports that two of Nicolay’s sisters gained legal control of his life and finances after a car crash in 2019.

As for the businesses at the heart of this legal battle, the Guardian reports that Aldi Nord’s three-part structure — designed to prevent hostile takeovers — might mean that the retailer and its Trader Joe’s subsidiary could be paralyzed by further litigation.

The latest? In January, the German press reported that Düsseldorf’s prosecutor will drop the embezzlement case, though the prosecutor office’s spokesperson did not want to comment further given the case’s sensitive nature.

Nicolay seems undeterred.

“I’m going to sue them all,” he told a person familiar with the case in January, according to the Kölner Stadt-Anzeiger.