Yahoo Finance: Inside the Secret World of Trader Joe's

[Ellis]

http://finance.yahoo.com/family-home/article/110437/inside-the-secret-world-of-trader-joes

VERY interesting article.

a couple of clips...

You'd think Trader Joe's would be eager to trumpet its success, but management is obsessively secretive. There are no signs with the company's name or logo at headquarters in Monrovia, about 25 miles east of downtown Los Angeles. Few customers realize the chain is owned by Germany's ultra-private Albrecht family, the people behind the Aldi Nord supermarket empire. (A different branch of the family controls Aldi Süd, parent of the U.S. Aldi grocery chain.) Famous in Germany for not talking to the press, the Albrechts have passed their tightlipped ways on to their U.S. business: Trader Joe's and its CEO, Dan Bane, declined repeated requests to speak to Fortune, and the company has never participated in a major story about its business operations.

Some of that may be because Trader Joe's business tactics are often very much at odds with its image as the funky shop around the corner that sources its wares from local farms and food artisans. Sometimes it does, but big, well-known companies also make many of Trader Joe's products. Those Trader Joe's pita chips? Made by Stacy's, a division of PepsiCo's (NYSE: PEP - News) Frito-Lay. On the East Coast much of its yogurt is supplied by Danone's Stonyfield Farm. And finicky foodies probably don't like to think about how Trader Joe's scale enables the chain to sell a pound of organic lemons for $2.

photographed brandishing Trader Joe's shopping bags — but Supreme Court Justice Sonia Sotomayor reportedly is a fan too. "What's not to like?" says Costco (NasdaqGS:COST - News) co-founder and CEO Jim Sinegal. "They're very good retailers, and we admire them a lot." Visit a Trader Joe's early in the day, and there are senior citizens on fixed incomes shopping for bargains; on weekends and evenings a well-heeled crowd takes over. Kevin Kelley, whose consulting firm Shook Kelley has researched Trader Joe's for its competitors, jokes that the typical shopper is the "Volvo-driving professor who could be CEO of a Fortune 100 company if he could get over his capitalist angst."

The rise of Trader Joe's reflects Americans' changing attitudes about food. While Trader Joe's is not a health food chain, it stocks a dizzying array of organics. It sells billions of dollars in food and beverages that years ago would have been considered gourmet but are now mainstays of the U.S. diet, such as craft beers and white-cheese popcorn. The genius of Trader Joe's is staying a step ahead of Americans' increasingly adventurous palates with interesting new items that shoppers will collectively buy in big volumes.

Well, it was only a matter of time.

[PokerPacker]

you wanna make the text NOT black?

[zoony]

Well, it was only a matter of time.

for what?

[Predicto]

I's not sure what the "truth" here is supposed to be.

Trader Joe's has been a major source of groceries for my home for 15 years, because it has good products, good prices, and is very reliable. Pretty simple, really.

[McD5]

The new thing down here, and I am sure in many parts of the country, is that the large chain supermarkets are now offering drive-thru service.

You place your grocery order online, then drive up to the store, where workers load it into your trunk.

It will be interesting to see how it catches on.

[Destino]

I's not sure what the "truth" here is supposed to be.

Trader Joe's has been a major source of groceries for my home for 15 years, because it has good products, good prices, and is very reliable. Pretty simple, really.

I was thinking the same thing. What exactly is supposed to surprise me here? I've known store brand foods and other products are made by major manufacturers for a long time.

[zoony]

The new thing down here, and I am sure in many parts of the country, is that the large chain supermarkets are now offering drive-thru service.

You place your grocery order online, then drive up to the store, where workers load it into your trunk.

It will be interesting to see how it catches on.

Kroger tried that back in the 1990s and into 2000 in Columbus, OH. (not sure if it was nationwide). It failed. You called in your groceries though.

However, consumers are much more savvy with that kind of thing today, so might be worth another shot.

I'd say about twice a week I ask my wife to pick something up on the way home. So I'd think there would be a market for this.

HOWEVER- much like the foolishness of gas stations embracing pay at the pump, I think this is overall a pretty dumb thing for retailers to be pushing. You are completely cutting out the possibility of impulse sales... which is the heart of a retailers profitability.

[@DCGoldPants]

not sure what the issue is.

The prices are good. I've never had bad service there. I'm not going to get everything there. But there are items like the Half-Caf coffee which I really like.

Viva Joe's!

[Ellis]

for what?

It seems, at least to me, when a successful chain such as Trader Joe's begins to expand/grow, it loses a bit of what it began as. The article cites Starbucks as a good example. I could add others such as Ben&Jerry's. The article pointed out that there is already changes taking place at the top level.

My comment was more about a good thing coming to an end. Once the chain gets to a certain size, it'll change dramatically and become just like all the other retail establishments. And if THAT doesn't happen, then their competitors will change to being like them which will lead customers to buy the cheaper product thus putting the ambitious original against the ropes.

It's a cycle that has repeated numerous times in America. Of course, I hope that I'm completely wrong about TJ's though. They're the only ones who sell a certain dog treat that doesn't make my dog's breath smell like a sewer. His breath could kill someone, I swear.

[TheLongshot]

The new thing down here, and I am sure in many parts of the country, is that the large chain supermarkets are now offering drive-thru service.

You place your grocery order online, then drive up to the store, where workers load it into your trunk.

It will be interesting to see how it catches on.

Probably about as much as them delivering them to your house. Maybe less so since there is a market for delivery. If you have to drive there, you might as well pick your groceries yourself as well.

[zoony]

It seems, at least to me, when a successful chain such as Trader Joe's begins to expand/grow, it loses a bit of what it began as. The article cites Starbucks as a good example. I could add others such as Ben&Jerry's. The article pointed out that there is already changes taking place at the top level.

oh sure. like Wilt Chamberlain said, 'nobody roots for goliath'

It's what we love to do in this country. Lob arrows at anyone who is on top and sing the praises of start-ups. Same is true in all of corporate america, not just retail. Apple is getting a nice taste of this, for instance.

And so is Lebron

[Predicto]

I was thinking the same thing. What exactly is supposed to surprise me here? I've known store brand foods and other products are made by major manufacturers for a long time.

Yep. Trader Joe's Vanilla Ice Cream is fantastic, precisely because it is really repackaged Double Rainbow ice cream, which is made here in San Francisco and is really top tier. Now if they were selling repackaged generic Lucerne Vanilla, it would be a problem.

[Predicto]

Several must buy items at Trader Joes:

The vanilla ice cream

The frozen jasmine or brown rice that reheats perfectly in the microwave in 3 mins

The prepackaged carne asade or marinated tri tip for the grill

The nuts, dried fruit and frozen fruit

All the cookies, but especially Joe-Joes (like oreo's that don't suck)

The frozen woodfired pizzas and the alsacian flatbread pizza

And if you drink, the Two Buck Chuck wine is the bargain of the century

[Jeeb]

I was thinking the same thing. What exactly is supposed to surprise me here? I've known store brand foods and other products are made by major manufacturers for a long time.

I do merchandising work for Safeway and at one point found a few cases of Wegmann's canned corn.

[Chump Bailey]

I love Trader Joe's - my favorite grocery store by far.

[Bang]

I love Trader Joes and wish there was one closer than 50 miles away.

when we do get up that way, we definitely stock up on all kinds of goodies, including my favorite cherry preserves, and their salsa is delicious.

~Bang

[Predicto]

I do merchandising work for Safeway and at one point found a few cases of Wegmann's canned corn.

Oh man. Tell your superiors that Safeway needs to start selling a brand of basic milk without rBHG it, like every other chain does. Both Lucerne and the other generic brand contain it.

I shouldn't have to pay six bucks for organic just to avoid putting growth hormones into my preteen daughters. Monsanto sucks.

[lovetoaster]

Several must buy items at Trader Joes:

The vanilla ice cream

The frozen jasmine or brown rice that reheats perfectly in the microwave in 3 mins

The prepackaged carne asade or marinated tri tip for the grill

The nuts, dried fruit and frozen fruit

All the cookies, but especially Joe-Joes (like oreo's that don't suck)

The frozen woodfired pizzas and the alsacian flatbread pizza

And if you drink, the Two Buck Chuck wine is the bargain of the century

If I may add another, their frozen Orange Chicken

[#98QBKiller]

Several must buy items at Trader Joes:

The vanilla ice cream

The frozen jasmine or brown rice that reheats perfectly in the microwave in 3 mins

The prepackaged carne asade or marinated tri tip for the grill

The nuts, dried fruit and frozen fruit

All the cookies, but especially Joe-Joes (like oreo's that don't suck)

The frozen woodfired pizzas and the alsacian flatbread pizza

And if you drink, the Two Buck Chuck wine is the bargain of the century

Their peach, garlic and chipotle salsas are some of the best salsas I've ever had. I usually keep a jar of each in my fridge at all times.

[zoony]

I'm a big fan of the World Market pasta sauces, personally. And their gourmet salami :hungry:

[Rudechain]

Several must buy items at Trader Joes:

And if you drink, the Two Buck Chuck wine is the bargain of the century

That wine is quite a bargain. We generally will buy a case of it for cooking needs. I have drank better wines, but at that price it works very well as a marinade.

[Mufumonk]

Their peach, garlic and chipotle salsas are some of the best salsas I've ever had. I usually keep a jar of each in my fridge at all times.

I'm going to have to try the peach salsa. I LOVE the garlic salsa. We go through a jar of that a week.

[Predicto]

I'm going to have to try the peach salsa. I LOVE the garlic salsa. We go through a jar of that a week.

The roasted tomato salsa and the black bean dip are also yummy.

[MattFancy]

The best thing at Trader Joe's are the chocolate chip dunker cookies. Those are the best cookies ever!

[SellersHappens]

Trader Joe's needs to get their butt into Austin. We certainly have enough dirty hippies to provide a nice consumer base.