The 2012 bankruptcy of the Schlecker chain caused more than 25,000 job losses in Germany.
Also in the dock in the western city of Stuttgart are his wife Christa, his son Lars and daughter Meike, and two auditors from accountancy firm Ernst and Young
The 2012 bankruptcy of the Schlecker chain -- which sold personal hygiene and household articles but no pharmaceuticals -- caused more than 25,000 job losses in Germany.
It was the single biggest wave of lay-offs in the post-war history of western Germany, the Verdi services union said at the time.
Anton Schlecker, 72, and his relatives did not publicly comment before the start of the trial and entered the court building through a back entrance.
Prosecutors charge that Schlecker, when he knew the family empire was going bust, withdrew more than 20 million euros ($21 million) in assets which would otherwise have gone to creditors.
This allegedly included a one-million-euro home renovation for son Lars, a holiday for the children that cost tens of thousands of euros, and 800,000 euros worth of financial gifts to four grandchildren.
The ex-tycoon's wife Christa is accused of having received tens of thousands of euros under the guise of consultancy fees.
Prosecutors also accuse Schlecker of having misrepresented the company's financial situation and making false claims before the insolvency court.
Schlecker, a butcher by training, founded his first shop in 1975 and grew the business into a multi-billion-euro company with more than 13,000 branches across Europe and a peak of around 50,000 employees.
Schlecker now faces 36 counts of embezzlement, contraventions of bankruptcy laws and other charges.
If found guilty, the family patriarch could face a maximum of 10 years' jail.
The trial started with the reading of a 270-page indictment, and the court set an initial 26 days of hearings until October.