Trader Joe's

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Trader Joe's
Type Private
Industry Retail (grocery)
Founded Pasadena (1958 (1958)) by Joe Coulombe
Headquarters Monrovia, California, U.S.
Number of locations 415 (as of March 2014)[1]
Key people Dan Bane, CEO
Theo Albrecht, owner (1979–2010, his death)
Products Private label staple foods, organic foods and specialty products[2]
Revenue IncreaseUS$11 billion (FY 2011)
(Estimate)[3]
Employees 20,000+[4]
Parent Aldi Nord
Website www.traderjoes.com

Trader Joe's is an American privately held chain of specialty grocery stores headquartered in Monrovia, California, in Greater Los Angeles. As of May 2013, Trader Joe's had a total of 408 stores.[1] Approximately half of its stores are in California, with the heaviest concentration in Southern California, but the company also has locations in 30 other states and Washington, D.C..[5]

Trader Joe's was founded by Joe Coulombe and has been owned since 1979 by a German family trust established by Aldi Nord's owner Theo Albrecht.[6] The chain has offices in Monrovia, California and Boston, Massachusetts.[7]

History[edit]

Store in Hadley, Massachusetts (2007).

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.[8] The original Pronto Markets were so similar to 7-Eleven that Coulombe felt the competition with 7-Eleven would be ruinous.[9]

He is said to have developed the idea of the Trader Joe South Seas motif while on vacation in the Caribbean.[10] The Tiki culture fad of the 1950s and 1960s was fresh in the cultural memory, and Trader Vic's was at its height with twenty-five 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 named "Trader Joe's" opened its doors 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 fresh squeezed orange juice. Theo Albrecht, of Aldi Nord, bought the company in 1979.[11] Coulombe was succeeded by John Shields in 1987; under his leadership the company expanded beyond California, moved into Arizona in 1993, and into the Pacific Northwest two years later.[2] In 1996, the company opened its first stores on the East Coast, in Brookline and Cambridge, both outside Boston.[2] Shields retired in 2001, when Dan Bane succeeded him.

Trader Joe's Rt.1, Saugus, Massachusetts.

A Business Week article about the store noted that, between 1990 and 2001, the chain quintupled the store numbers and increased its profits by ten times.[6] 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 2011."[3] In 2010, Trader Joe's sold what Fortune magazine estimated to be $1,750 in merchandise per square foot, more than double the sales generated by Whole Foods Market.[2]

In November, 2005 Trader Joe's announced it will ensure that all eggs it sells will be sourced from cage-free hens.[12]

The May 2009 issue of Consumer Reports ranked Trader Joe's the second-best supermarket chain in the USA, after Wegmans.[13] In June 2009, MSN Money released its third annual Customer Service Hall of Fame survey results. Trader Joe's ranked second in customer service.[14] Although Ethisphere magazine listed Trader Joe's among its most ethical companies in the United States in 2008, 2009, and 2010, Trader Joe's did not make that list in 2011.[15][16][17]

In 2011, Trader Joes' resistance to the Campaign for Fair Food initiated by the Coalition of Immokalee Workers (CIW) sparked nationwide protests and talk of consumer boycotts among labor, religious and student organizations.[18] On February 9, 2012, Trader Joe's agreed to join the Fair Food program for Florida tomatoes.[19]

In 2014, Consumer Reports again ranked Trader Joe's a top scoring supermarket chain.[20]

Products[edit]

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.[2] Trader Joe's describes itself as "your neighborhood grocery store" or "your unique 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 like 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.[11] In October 2007, Trader Joe's began to phase out foods imported from China amid concerns that standards on "organic" products from the country are not as stringent as they should be. Between February 2008 and April 2008, Trader Joe's claimed to have phased out single-ingredient products from China due to concerns over tainted goods. However, Trader Joe's does not provide Country of Origin disclosures on most of its private label brands, citing reasons of food source and supplier secrecy.[21]

Trader Joe's discontinues individual products more often than larger grocery chains, due to increased costs or poor sales, or to free up space for new items.[22]

Trader Joe's sells many items under its own private labels, at a significant discount to brand-name equivalents, and requires their brand-name suppliers not to publicize this business relationship.[2] Their labels are sometimes named in accordance with the ethnicity of the food in question, such as Trader Jose's (Mexican food), Trader Ming's (Chinese food), Baker Josef's (flour and bagels), Trader Giotto's (Italian food), Trader Joe-San (Japanese food), Arabian Joe's (Middle Eastern food), Pilgrim Joe's (New England specialties, like clam chowder), JosephsBrau (beer), Joseph Händler (wine),Trader Johann's (lip balm), Trader Jacque's (French food and soaps), Joe's Diner (certain frozen entrees), Joe's Kids (children's food), and Trader Darwin's (vitamins and health supplements). By selling almost all of its products under its own label, Trader Joe's "skips the middle man" and buys directly from both local and international small-time vendors.[23]

Interior of the Union Square, Manhattan store.

Trader Joe's is the exclusive retailer of Charles Shaw wine, popularly known as Two Buck Chuck[11] because of its $1.99 price tag in California; in some locales, it sells for more than $3 a bottle due to varying state liquor taxes and transportation costs. In January 2013, the California retail price of Charles Shaw increased to $2.49, the first increase since its introduction in 2002. 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.[24]

Through its ownership by Aldi (managed by Aldi Nord; the southern division, Aldi Süd, runs Aldi markets in the United States), products branded with its name have begun to appear in ALDI MARKT (stores administered by Aldi Nord or Aldi Süd, depending on location) in Europe.

Trader Joe's has stated that its private-label products contain no artificial colors, flavors, preservatives, MSG or trans fats; they are sourced from non-genetically modified ingredients; and in the case of dairy products, are made from milk from cows not given the artificial hormone rBST. This statement does not apply to products lacking a Trader Joe’s brand.[25]

In 2011, Consumer Reports rated Trader Joe's Truffle Brownie mix the best brownie mix on the market.[26]

Employees[edit]

As of 2010, supervisory crew members ("Merchants" and "Mates") can start at $45–75,000 per year and store managers ("Captain") can earn in the "low six figures". The company contributes to an employee's standard 401(k) plan. As of 2013, pay for entry-level Crew Members is $10 to $20 an hour.[2][6]

Locations[edit]

Some "Trader Joe" brand groceries are carried by ALDI supermarkets in Germany (pictured), Denmark, etc.

As of December 2013, Trader Joe's had 408 stores in the United States[1] with stores being added regularly. Most locations average between 8,000 and 12,000 sq ft (1,100 m2). In February 2008, Businessweek reported that the company had the highest sales per square foot of any grocer in the U.S.. 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.[2]

Criticism and controversies[edit]

Trader Joe's was criticized for making dubious environmental claims in marketing brochures.[27]

The chain ranked low on Greenpeace’s sustainable seafood report card. The packaging is excessive, with even the produce sealed in plastic. The business model forces consumers to buy in quantities large enough to encourage waste. And most of Trader Joe’s products are made on equipment shared with everything you might be allergic to (dairy, nuts) or philosophically opposed to eating (dairy, meat). - Reporter Cameron Scott in the San Francisco Chronicle 2013[28]
February 2012 protest at Trader Joe's Headquarters in Monrovia, California.

The retailer has been characterized as "notoriously secretive"[29] and has been criticized for a lack of transparency by management about the sources of products such as organic milk.[27] A New York Times reporter speculated that the retailer was able to sell caviar at $11 by purchasing smuggled sturgeon from the Caspian Sea.[30] Another report criticized Trader Joe's for throwing out unspoiled food.[31] Trader Joe's was sued in 2013 for selling lead-tainted candies without appropriate warning labels.[32]

In August 2013, Trader Joe's sued the owner of the Vancouver-area shop Pirate Joe's for trademark infringement, false designation of origin and false advertising, among other claims.[33][34][35][36] As the chain operates no stores in Canada, its owner had purchased a large number of products from Trader Joe's stores and resold them at a slightly higher price on a grey market basis.[37] In October 2013, Judge Marsha Pechman dismissed the case, ruling that Trader Joe's did not provide sufficient evidence of any economic harm caused by the operation, and that the store's owner could not be convicted under the Lanham Act because the alleged trademark infringements did not occur within the United States.[38]

In response to the passage of the Affordable Care Act, Trader Joe's announced in September 2013 that it would do away with health insurance options for its part-time employees rather than continuing to provide affordable options for health care to part timers (those working less than 30 hours weekly). In January 2014, the company will provide employees with a $500 check to help cover the costs of obtaining coverage under the new exchanges forming under the rubric of the Affordable Care Act. Those working full time remain unaffected.[39]

In 2008, Greenpeace started ranking America’s major supermarket chains on their seafood sustainability practices because, according to Phil Radford, Greenpeace U.S. CEO, “three quarters of global fish stocks are suffering from overfishing,[40] and 90% of top marine predators are already gone.”[41][42] Criteria included the number of threatened fish species supermarkets sold, their seafood purchasing policies, and ocean legislation policies they supported.[43] Greenpeace annual Carting Away the Oceans (CATO) report ranks 20 supermarkets on a scale of 1 to 10, with 1 being least sustainable with seafood policies and 10 being the most sustainable with seafood policies. Between 2012 and 2013, Trader Joe's moved from 15th on the CATO scale to 3rd by removing six unsustainable species of fish from its shelves and getting involved in efforts to protect the Bering Sea Canyons.[44]

In January 2014, the company became a co-defendant in a lawsuit filed by the former manufacturer of its highly successful peanut butter-filled pretzel snack food, alleging that Trader Joe's and ConAgra Foods had conspired to take over the market for the product.[45][46]

References[edit]

  1. ^ a b c "Trader Joe's and The Coalition of Immokalee Workers Sign Fair Food Agreement". Trader Joe's. Retrieved September 23, 2012. "With the opening of the Naples, Florida location, Trader Joe's operates 367 neighborhood grocery stores across the nation." 
  2. ^ a b c d e f g h Kowitt, Beth (August 23, 2010). "Inside the secret world of Trader Joe's". Fortune. CNN.com. Retrieved August 23, 2010. 
  3. ^ a b "SN's Top 75 Retailers for 2011". Supermarket News. January 2011. Retrieved January 25, 2011. 
  4. ^ http://www.manta.com/c/mm33crv/trader-joe-s-co-inc
  5. ^ "Where in the dickens you can find a Trader Joe's?". Trader Joe's. Retrieved October 28, 2011. 
  6. ^ a b c Armstrong, Larry (April 26, 2004). "Trader Joe's: The Trendy American Cousin". BusinessWeek. Retrieved November 27, 2009. 
  7. ^ "Office Crew." Trader Joe's. Retrieved on September 20, 2011.
  8. ^ Gardetta, Dave (September 2011). "Enchanted Aisles". Los Angeles. 
  9. ^ "For Trader Joe's, a New York Taste Test", The New York Times, March 8, 2006.
  10. ^ "Trader Joe's targets 'educated' buyer". Seattle Post-Intelligencer. Associated Press. August 30, 2003. 
  11. ^ a b c The American Way of Aldi, Deutsche Welle, January 16, 2004.
  12. ^ [1] Humane Society November 2005 http://www.humanesociety.org/issues/confinement_farm/timelines/eggs_timeline.html] Humane Society November 2005].  Missing or empty |title= (help)
  13. ^ Kroll, Kathie (April 6, 2009). "Consumer Reports ranks top supermarkets". Cleveland.com. Retrieved February 13, 2010. 
  14. ^ "10 Companies that treat you right", MSN Money, June 10, 2009.
  15. ^ "2008 World's Most Ethical Companies". Ethisphere. 2008. Retrieved February 13, 2010. [dead link]
  16. ^ "2009 World's Most Ethical Companies". Ethisphere Magazine. April 2009. Retrieved February 13, 2010. [dead link]
  17. ^ "2010 World's Most Ethical Companies". Ethisphere Magazine. April 2010. Retrieved April 26, 2010. [dead link]
  18. ^ Tom Broderick. "Why we picketed Trader Joe's". OakPark.com. Retrieved May 2, 2012. 
  19. ^ Eidelson, Josh (February 13, 2012). "Trader Joe’s Caves to Coalition of Immokalee Workers, Signs Fair Food Agreement - Working In These Times". Inthesetimes.com. Retrieved May 2, 2012. 
  20. ^ "Wegmans, Trader Joe’s, Publix, Costco & Sprouts Top Consumer Reports Supermarket Ratings". Consumer Reports. 26 March 2014. Retrieved 5 April 2014. 
  21. ^ Hirsch, Jerry (February 12, 2008). "Trader Joe's halting some Chinese imports". Los Angeles Times. 
  22. ^ "Why does TJ’s frequently discontinue products?". Trader Joe's. Retrieved January 15, 2010. 
  23. ^ Thayer, Warren (June 1, 2002). "Trader Joe's is not your 'average Joe!' With perhaps 85% of sales coming from private label, this secretive bi-coastal chain has a playful -- and highly effective -- formula.". Private Label Buyer. 
  24. ^ Franson, Paul. "The Origins of Trader Joe's and Why Americans Don't Drink More Wine". Novus Vinum. Retrieved November 5, 2008. 
  25. ^ "Trader Joe's". Traderjoes.com. Retrieved May 2, 2012. 
  26. ^ "Best Brownie Mix: Consumer Reports". Consumer Reports. August 11, 2011. p. 9. 
  27. ^ a b Tracy Moore, "That Not-So Fresh Feeling: Why Is Trader Joe's Tight-Lipped About Its Food Sources?", The Nashville Scene, May 24, 2010, quoting a report in Sustainable Industries magazine. Accessed March 30, 2013
  28. ^ Cameron Scott, "Trader Joe’s Gets It Easy?", San Francisco Chronicle, March 26, 2009. Accessed March 30, 2013
  29. ^ Julia Moskin, "For Trader Joe's, a New York Taste Test", The New York Times, March 8, 2006. Accessed March 30, 2013
  30. ^ Marian Burros, "EATING WELL; Unraveling a Caviar Mystery", The New York Times, February 27, 2002,
  31. ^ Jim Kavanagh, "Freegans go Dumpster dining at Trader Joe's", CNN, July 29, 2011. Accessed March 30, 2013
  32. ^ Jason Notte, "Whole Foods and Trader Joe's sued over lead", MSN Money, May 2, 2013
  33. ^ Whole Foods and Trader Joe's sued over lead (August 16, 2013). "Trader Joe's drags a pirate to court". San Francisco Chronicle. Retrieved January 26, 2014. 
  34. ^ Chris Roberts (August 16, 2013). "Trader Joe's Sues Canadian Pirate Outlet". NBC Bay Area. Retrieved September 29, 2013. 
  35. ^ Michelle Lanz (August 27, 2013). "Trader Joe's sues Canadian 'Pirate' reselling items in Vancouver". KPCC (89.3 MHz FM) Take Two. Retrieved September 29, 2013. 
  36. ^ Rene Lynch (August 27, 2013). "Pirate Joe's: Vancouver business sued for reselling Trader Joe's faves". Los Angeles Times. Retrieved September 29, 2013. 
  37. ^ "Trader Joe's pursues lawsuit against Canadian 'pirate'". CBC News. Retrieved 28 August 2013. 
  38. ^ "Trader Joe's loses fight with Vancouver's Pirate Joe's". CBC News. Retrieved 5 January 2014. 
  39. ^ Denver Nicks (September 17, 2013). "Trader Joe's Explains why its cutting health benefits for part timers". The Washinton Post (reprinted at swampland.time.com). Retrieved October 8, 2013. 
  40. ^ "General situation of world fish stocks". United Nations Food and Agriculture Organization (FAO). Retrieved November 6, 2013. 
  41. ^ Tremblay-Boyer, Laura, Didier Gascuel, and Daniel Pauly. "A global map of the relative impact of fishing on the biomass of marine ecosystems from 1950 to 2004". Ecopath 25 Years Conference Proceedings: Extended Abstracts. Eds. Maria Lourdes D. Palomares, et al. Vol. 17. Fisheries Centre Research Reports, 17. 2009. 132-133. Retrieved November 6, 2013. 
  42. ^ "Protecting our oceans, one supermarket at a time". The Seek Radio. Retrieved October 13, 2013. 
  43. ^ "Carting Away the Oceans". Greenbiz.com. Retrieved July 20, 2013. 
  44. ^ "Carting Away the Oceans 7". Retrieved November 2, 2013. 
  45. ^ Lee, Alfred (February 17, 2014). "Pretzel Supplier Alleges Twisted Tale". Los Angeles Business Journal. Retrieved 2014-02-18. 
  46. ^ Hubbard, Russell (January 24, 2014). "Suit targets ConAgra in dispute over snack". Omaha World-Herald. Retrieved 2014-02-18. 

External links[edit]