A closer look at its selection of items underscores the brilliance of Coulombe's limited-selection, high-turnover model. Take peanut butter. Trader Joe's sells 10 varieties. That might sound like a lot, but most supermarkets sell about 40 SKUs. For simplicity's sake, say both a typical supermarket and a Trader Joe's sell 40 jars a week. Trader Joe's would sell an average of four of each type, while the supermarket might sell only one. With the greater turnover on a smaller number of items, Trader Joe's can buy large quantities and secure deep discounts. And it makes the whole business -- from stocking shelves to checking out customers -- much simpler.
Employees dress in goofy trademark Hawaiian shirts, hand stickers out to your squirming kids, and cheerfully refund your money if you're unhappy with a purchase -- no questions asked. At the Chelsea store opening, workers greeted customers with high-fives and free cookies. Try getting that kind of love at the Piggly Wiggly.Except for the "goofy" shirts, this is all at my local Market Basket. Plus they ask about the kids if I leave one at home. Oh AND I can by the "yuppie" cage-free eggs (seriously, CNN?).
Joe Coulombe (pronounced COO-lomb), now 80, opened the first Trader Joe's 43 years ago in Pasadena to serve a sophisticated -- but strapped -- consumer. He named the store Trader Joe's to evoke images of the South Seas. He stocked it with convenience-store items and good booze, and at one time his shop boasted the world's largest assortment of California wine. Coulombe then added health food -- a seemingly odd combination that totally worked in 1970s California. By the late 1970s he was operating more than 20 locations.posted by AceRock at 10:33 AM on August 25, 2010 [5 favorites]
The company's success did not go unnoticed. German grocery mogul Theo Albrecht, who died in July at age 88, coveted Trader Joe's -- not as part of a major U.S. expansion but as a smart financial investment... In 1979, Coulombe sold his company to Albrecht. Coulombe tells Fortune he "can't remember" the selling price.
The Albrechts, who own Trader Joe's through a family trust, have generally stayed out of the business.
Trader Joe's is a supplier's dream account: It pays on time and doesn't mess with extra charges for advertising, couponing, or slotting fees that traditional supermarkets charge suppliers to get their products onto the shelves. "It's all transparent -- no BS," says a former executive.Or maybe this part:
The Tasty Bite Punjab Eggplant ran $3.39 at a Whole Foods in Manhattan. The seemingly identical Punjab Eggplant that the Stamford, Conn., company makes for Trader Joe's is more than $1 cheaper.posted by Lemurrhea at 11:06 AM on August 25, 2010 [2 favorites]
Trader Joe's is named after its founder, Joe Coulombe. The chain began in 1958 as a Greater Los Angeles area chain of "Pronto Market" convenience stores. The original Pronto Markets were similar to 7-Eleven stores, so similar Coulombe felt the competition with 7-Eleven would be ruinous.[5] He is said to have developed the idea of the Trader Joe South Seas motif while on vacation in the Caribbean.[6] He had noticed that Americans were traveling more and returning home with tastes for food and wine they had trouble satisfying in supermarkets of the time.[7] The first store named "Trader Joe's" opened its doors in 1967. This store, on Arroyo Parkway in Pasadena, California, remains in operation. In response to competition from 7-Eleven, the chain differentiated its stores' offerings and doubled the floor space in 1967. In the first few decades of operation, some of the stores offered fresh meats provided by butchers who leased space in the stores. Trader Joe's at one time had sandwich shops, freshly cut cheese, and fresh squeezed orange juice. Theo Albrecht bought the company in 1979.[8] Coulombe was succeeded by John Shields in 1987; under his leadership the company expanded beyond California, moving into Arizona in 1993 and the Pacific Northwest two years later.[1] In 1996, the company opened its first stores on the East Coast, in Brookline and Cambridge, both outside Boston.[1] Shields retired in 2001, turning the reins over to Dan Bane. Shields still does consulting for the company.posted by Mental Wimp at 11:52 AM on August 25, 2010
A Business Week article about the store noted that, between 1990 and 2001, the chain quintupled the store number and increased its profits by ten times.[4] Supermarket News estimates that Trader Joe's total sales for 2009 were $8 billion, which gave it a ranking of No. 21 on the list of "SN's Top 75 Retailers for 2010."[2] As of 2010, Trader Joe's sells what Fortune magazine estimated to be $1,750 in merchandise per square foot, more than double the sales generated by Whole Foods.[1]
Can Trader Joe's maintain that kind of charm as it expands? Former employees worry that the company is losing its entrepreneurial zeal and that CEO Dan Bane has made the place more corporate, adding more senior vice presidents, and creating new titles such as product developer. At headquarters Bane encourages employees to wear Hawaiian shirts and name tags. But putting systems in place isn't necessarily a bad thing. "You have to grow up at some point," says a former employee.Statements like that always irk me. How is being less corporate somehow not "grown up"? That kind of attitude is awfully demeaning to companies with cultures that are tolerable to human beings.
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"So, who do you think owns Trader Joe's? How do you think it got started?"
"I dunno. Some guys from California? Seems like it started as a family business that went huge."
"Would you believe it's an arm of the biggest grocery chain in ... Germany?"
"No way!"
"Way, dude. Way."
posted by Cool Papa Bell at 10:23 AM on August 25, 2010 [2 favorites]