Working World

When 7-Eleven markets arrived in Los Angeles, Joe Coulombe knew his chain of convenience stores, Pronto Markets, would not survive. He wanted to come up with something different in a food store, so he spent a year and a half traveling and working out ideas for a new kind of grocery retailer. Admitting he was not aiming for perfection, he conceived the idea for Trader Joe’s and designed it for people who were “overeducated and underpaid.” His goal was “to make it possible every night to have a decent bottle of wine, a decent loaf of bread, and a decent pound of cheese on the table.”

Trader Joe’s started out in 1967 selling an eclectic variety of gourmet food items and low-priced wine. The stores were decorated with a South Seas motif and the staff dressed in Hawaiian shirts, adding a bit of exotic playfulness to grocery shopping. In the '70s, the stores went “green” by offering net-free tuna, organic produce, seafood processed without sulfites or chemicals and free-range eggs.

Trader Joe’s has always been able to offer value for low prices by avoiding the middleman/distributor in the supply chain, dealing directly with the manufacturers of food products. They often develop products especially for TJ’s, with formulations free of preservatives and artificial ingredients, which are then private-labeled (sometimes as Trader Giotto’s, Trader Ming’s, or Baker Josef’s, in keeping with the global trader theme). To keep operational costs low, TJ’s rents or buys cheap real estate for their stores. Keeping those stores small, they stock only items that prove to be good sellers.

Although nonunion, Trader Joe’s employees (or “crew members”) get above-average wages and a generous company-funded retirement plan. This pays off with a loyal staff that provides excellent customer service. In two decades of shopping at TJ’s, I have rarely encountered an employee who did not seem genuinely happy to be there, actively and sincerely engaged with the customers, friendly and eager to help.

A wide variety of interesting food products, low prices and friendly staff actually make it fun to shop. It’s a formula that’s worked extremely well. BusinessWeek once reported that, while the number of store locations quintupled over 11 years, the chain’s profits over the same period increased tenfold. From its humble beginnings as a regional hybrid convenience store, Trader Joe’s has grown into a $3-billion-a-year national chain with over 200 stores in 19 states.

Coulombe sold out to German billionaire Theo Albrecht in 1979. The stores have become a little more conventional: Bar code scanning finally replaced those little price stickers, and the apparel is now T-shirts with a simple two-tone floral band.

Thankfully, some things remain the same. The décor is "Gilligan’s Island" meets early Tiki hut. The main means of advertising is the Fearless Flyer catalogue on pulp paper, full of Victorian-style drawings and silly captions along with the product descriptions. The same casual vibe in the stores survives. Each still feels like a small offbeat local shop, and the spirit of the place makes grocery shopping recreational. You never know what new and unusual product you are going to find: perhaps a relish from India, marinated wild white salmon fillets or a pretty decent bottle of $3 wine. And the smoked chicken cashew and basil pesto empanadas are awesome.

Suzanne Ridgway is a freelance writer and regular columnist for Working World Magazine, and writes grant proposals for nonprofit organizations.

1 COMMENTS

• Catherine Rhodes

  Thank you for Trader Joes! My family lives there.

  Jun 13, 2009