Trader Joe's

History

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 so similar to 7-Eleven that Coulombe felt the competition with 7-Eleven would be ruinous.

He is said to have developed the idea of the Trader Joe's South Seas motif while on vacation in the Caribbean. The Tiki culture fad of the 1950s and 1960s was fresh in the cultural memory, and Trader Vic's was at its height with 25 locations worldwide. 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.

The first store branded as "Trader Joe's" opened in 1967. This store, on Arroyo Parkway in Pasadena, California, remains in operation. 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 freshly squeezed orange juice.

Germany's Theo Albrecht of Aldi Nord bought the company in 1979 as a personal investment for his family. Coulombe was succeeded as CEO by John Shields in 1987. Under his leadership the company expanded beyond California, moving into Arizona in 1993 and into the Pacific Northwest two years later. In 1996, the company opened its first stores on the East Coast: in Brookline and Cambridge both outside Boston. Shields retired in 2001 when Dan Bane succeeded him as CEO after being the President of the Western Division. When Bane became CEO there were 156 stores in 15 states.

BusinessWeek reported that Trader Joe's quintupled the number of its stores between 1990 and 2001, and multiplied its profits by ten. Supermarket News estimated Trader Joe's sales for 2015 at $13 billion, and placed Trader Joe's 21st on the list of "SN's Top 75 Retailers for 2016." In 2016, Fortune magazine estimated Trader Joe's sales per square foot of floor space to be $1,750 — more than double that generated by Whole Foods Market.

In February 2016, due to customer feedback Trader Joe's announced the following goals regarding cage-free eggs "to have all the eggs they sell in western states (CA, OR, WA, AZ, NM and CO) come from cage-free suppliers by 2020 and all the eggs we sell nationally to come from cage-free suppliers by 2025."

The May 2009 issue of Consumer Reports ranked Trader Joe's the second-best supermarket chain in the United States (after Wegmans). In June 2009, MSN Money released its third annual Customer Service Hall of Fame survey results. Trader Joe's ranked second in customer service. Although Ethisphere magazine listed Trader Joe's among its most ethical companies in the United States from 2008 to 2010, Trader Joe's did not make the list in 2011. In 2014, Consumer Reports again ranked Trader Joe's a top-scoring supermarket chain.

Locations

As of February 16, 2017, Trader Joe's had 461 stores in the United States with stores being added regularly. Most locations averaged between 10,000 and 15,000 sq ft (1,400 m²). In February 2008, BusinessWeek reported that the company had the highest sales per square foot of any grocer in the United States. Two-and-a-half years later, Fortune magazine estimated sales to be $1,750 in merchandise per square foot, more than double the sales generated by Whole Foods.

Products

While a typical grocery store may carry 50,000 items, Trader Joe's stocks about 4,000 items, 80% of which bear one of its own brand names. Trader Joe's describes itself as "your neighborhood grocery store." Products include gourmet foods, organic foods, vegetarian foods, unusual frozen foods, imported foods, domestic and imported wine and beer (where local law permits), "alternative" food items, and staples such as bread, cereal, eggs, dairy, coffee, and produce. Non-food items include personal hygiene products, household cleaners, vitamins, pet food, plants, and flowers.

Many of the company's products are environmentally friendly. In October 2007, amid customer concerns, Trader Joe's began to phase out foods imported from China, and from February to April 2008, Trader Joe's phased out single-ingredient products from China because of customer concerns. Between 2012 and 2013, Trader Joe's moved from 15th on Greenpeace's CATO (Carting Away the Oceans) scale to third by removing six unsustainable species of fish from its shelves and getting involved in efforts to protect the Bering Sea Canyons.

Trader Joe's discontinues individual products based of customers' reactions more often than larger grocery chains to free up space for new items.

Trader Joe's sells many items under its own private labels, at a significant discount to brand-name equivalents, and requires its brand-name suppliers not to publicize this business relationship. Trader Joe's labels are sometimes named in accordance with the ethnicity of the food in question, such as "Trader Jose's" (Mexican food), "Baker Josef's" (flour and bagels), "Trader Giotto's" (Italian food), "Trader Joe-San's" (Japanese food), "Trader Ming's" (Asian food), "JosephsBrau" (beer), and "Trader Jacques'" (French food and soaps). By selling almost all of its products under its own labels, Trader Joe's "skips the middle man" and buys directly from both local and international small-time vendors.

Trader Joe's is the exclusive retailer of Charles Shaw wine, popularly known as "Two Buck Chuck" because of its original $1.99 price tag in California (local prices vary). Of the wine selection at Trader Joe's, Coloumbe has said, "We built Trader Joe's on wine first, then food. I tasted 100,000 wines, and most weren't wonderful. They were submitted to us by desperate vintners." Along with Charles Shaw, Trader Joe's is known for stocking a very large selection of California and New World wines.

Trader Joe's has said its private-label products contain no artificial flavors, no artificial preservatives, no colors derived from anything other than naturally available products, no genetically modified ingredients, no partially hydrogenated oils (adding trans fat), no MSG. In addition, its private label dairy products use milk from cows not given the artificial growth hormone rBST.

Employee compensation

Trader Joe's compensates its Crew well. Store Managers ("Captains") have earnings in the six figures and supervisory Crew ("Mates") can start at $45,000–$75,000 per year. Crew Members are reviewed twice a year and on average have the potential to receive a 7%-10% annual increase. The company provides a great retirement plan and currently contributes 10% of annual salary to eligible Crew, and the plan allows Crew to save pre-tax dollars towards their own retirement. Medical, dental and vision plans are offered to eligible Crew at a low cost (currently $75/month). All crew obtain a 10% discount on all products available at the store and paid time-off that increases with tenure.

Criticism

From an article titled "Trader Joe's Gets it Easy?":