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Trader Joe's

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Trader Joe's
Company typePrivate
IndustryRetail (Grocery)
FoundedPasadena, California (1958 (1958)) by Joe Coulombe
Headquarters
Monrovia, California
,
U.S.
Number of locations
367 (as of May 2013)[1]
Key people
Dan Bane, CEO
Theo Albrecht, Owner (1979–2010, his death)
ProductsPrivate label staple foods, organic foods, and specialty products[2]
RevenueIncreaseUS$8.5 billion (FY 2011)
(Estimate)[3]
Number of employees
20,000+[4]
ParentAldi Nord
Websitewww.traderjoes.com

Trader Joe's is a 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 471(?) 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

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 similar to 7-Eleven stores, so similar 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] 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 Market.[2]

The May 2009 issue of Consumer Reports ranked Trader Joe's the second-best supermarket chain in the nation, after Wegmans.[12] In June 2009, MSN Money released its third annual Customer Service Hall of Fame survey results. Trader Joe's ranks second in customer service.[13] 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.[14][15][16]

February 2012 protest at Trader Joe's Headquarters in Monrovia, California.

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, faith, and student organizations.[17] On February 9, 2012, Trader Joe's agreed to join the Fair Food program for Florida tomatoes.[18]

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.[2] Trader Joe's describes itself as "your neighborhood grocery store" or "your unique grocery store." Products sold 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.[19]

Trader Joe's discontinues individual products more often than larger grocery chains do, due to increased costs or poor sales, or to free up space for new items.[20]

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.[21]

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.[22]

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.[23]

In 2011, Consumer Reports rated Trader Joe's Truffle Brownie mix the best brownie mix on the market.[24]

Employees

Trader Joe's pays above-union wages: 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 "high six figures." The company contributes to an employee's standard 401(k) plan. As of 2013, pay for entry-level Crew Members was $10 to $20 an hour.[2][6]

Locations

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

As of May 2013, Trader Joe's had a total of 398 stores in the United States [1] with more 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 has 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

Trader Joe's was criticized for making dubious environmental claims in marketing brochures.[25]

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[26]

The retailer has been characterized as "notoriously secretive"[27] and has been criticized for a lack of transparency by management about the sources of products such as organic milk.[25] A New York Times reporter speculated that the retailer was able to sell caviar at $11 by purchasing smuggled sturgeon from the Caspian Sea.[28] Another report criticized Trader Joe's for throwing out unspoiled food.[29] Trader Joes was sued in 2013 for selling lead-tainted candies without appropriate warning labels.[30]

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.[31][32][33][34] 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.[35] The lawsuit was dismissed in October 2013.[36]

Crew and management have recently criticized the company's efforts to continually remain as a leader in employee care. The ethics and integrity of the company have compromised certain "perks" of working for Trader Joe's. Some employees have coined the term for the company: "Traitor Joe's", as a result of continuous changes to raise and benefit systems provided as a solid foundation of their successful business plan. Once known as "the happy place to shop", Trader Joe's friendly environment has been compromised and is looked at by insiders as now just another grocery store.

References

  1. ^ a b c "Trader Joe's and The Coalition of Immokalee Workers Sign Fair Food Agreement". Trader Joe's. Retrieved 2012-09-23. With the opening of the Naples, Florida location, Trader Joe's operates 367 neighborhood grocery stores across the nation. Cite error: The named reference "tjnumber" was defined multiple times with different content (see the help page).
  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 2010-08-23.
  3. ^ a b "SN's Top 75 Retailers for 2011". Supermarket News. January 2011. Retrieved 2011-01-25.
  4. ^ http://www.manta.com/c/mm33crv/trader-joe-s-co-inc
  5. ^ "Where in the dickens you can find a Trader Joe's?" (PDF). Trader Joe's. Retrieved 2011-10-28.
  6. ^ a b c Armstrong, Larry (April 26, 2004). "Trader Joe's: The Trendy American Cousin". BusinessWeek. Retrieved 2009-11-27. {{cite journal}}: Italic or bold markup not allowed in: |magazine= (help)
  7. ^ "Office Crew." Trader Joe's. Retrieved on September 20, 2011.
  8. ^ Gardetta, Dave (September 2011). "Enchanted Aisles". Los Angeles. {{cite journal}}: Italic or bold markup not allowed in: |journal= (help)
  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. ^ Kroll, Kathie (April 6, 2009). "Consumer Reports ranks top supermarkets". Cleveland.com. Retrieved 2010-02-13.
  13. ^ 10 Companies that treat you right, MSN Money, June 10, 2009.
  14. ^ "2008 World's Most Ethical Companies". Ethisphere Magazine. 2008. Retrieved 2010-02-13.
  15. ^ "2009 World's Most Ethical Companies". Ethisphere Magazine. 2009. Retrieved 2010-02-13. {{cite web}}: Unknown parameter |month= ignored (help)
  16. ^ "2010 World's Most Ethical Companies". Ethisphere Magazine. 2010. Retrieved 2010-04-26. {{cite web}}: Unknown parameter |month= ignored (help)
  17. ^ "Why we picketed Trader Joe's". OakPark.com. Retrieved 2012-05-02.
  18. ^ Eidelson, Josh. "Trader Joe's Caves to Coalition of Immokalee Workers, Signs Fair Food Agreement - Working In These Times". Inthesetimes.com. Retrieved 2012-05-02.
  19. ^ Hirsch, Jerry (February 12, 2008). "Trader Joe's halting some Chinese imports". Los Angeles Times.
  20. ^ "Why does TJ's frequently discontinue products?". Trader Joe's. Retrieved 2010-01-15.
  21. ^ 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.
  22. ^ Franson, Paul. "The Origins of Trader Joe's and Why Americans Don't Drink More Wine". Novus Vinum. Retrieved 2008-11-05.
  23. ^ "Trader Joe's". Traderjoes.com. Retrieved 2012-05-02.
  24. ^ "Best Brownie Mix: Consumer Reports". Consumer Reports Magazine. 11. p. 9. {{cite web}}: Check date values in: |date= and |year= / |date= mismatch (help); Unknown parameter |month= ignored (help)
  25. ^ a b Tracy Moore, May 24, 2010, The Nashville Scene, That Not-So Fresh Feeling: Why Is Trader Joe's Tight-Lipped About Its Food Sources?, quoting a report in Sustainable Industries magazine, Accessed March 30, 2013
  26. ^ San Francisco Chronicle,Trader Joe’s Gets It Easy?, Accessed March 30, 2013
  27. ^ Julia Moskin, The New York Times, March 8, 2006 For Trader Joe's, a New York Taste Test, Accessed March 30, 2013
  28. ^ Marian Burros, The New York Times, February 27, 2002, EATING WELL; Unraveling a Caviar Mystery
  29. ^ Jim Kavanagh, CNN, July 29, 2011, Freegans go Dumpster dining at Trader Joe's, Accessed March 30, 2013
  30. ^ article on lawsuit: http://money.msn.com/now/post.aspx?post=c53cd00c-e1e2-473e-8349-52bfd07e698f&goback=%2Egde_734897_member_238795506
  31. ^ "Trader Joe's drags a pirate to court". By Patricia Yollin of San Francisco Chronicle (August 16, 2013). Retrieved Sept 29, 2013. {{cite web}}: Check date values in: |accessdate= (help)
  32. ^ "Trader Joe's Sues Canadian Pirate Outlet". By Chris Roberts of NBC Bay Area (August 16, 2013). Retrieved Sept 29, 2013. {{cite web}}: Check date values in: |accessdate= (help)
  33. ^ "Trader Joe's sues Canadian 'Pirate' reselling items in Vancouver". By Michelle Lanz of KPCC (89.3 MHz FM) Take Two (August 27, 2013). Retrieved Sept 29, 2013. {{cite web}}: Check date values in: |accessdate= (help)
  34. ^ "Pirate Joe's: Vancouver business sued for reselling Trader Joe's faves". By Rene Lynch of Los Angeles Times (August 27, 2013). Retrieved Sept 29, 2013. {{cite web}}: Check date values in: |accessdate= (help)
  35. ^ "Trader Joe's pursues lawsuit against Canadian 'pirate'". CBC News. Retrieved 28 August 2013.
  36. ^ "Trader Joe's lawsuit against Canadian 'pirate' dismissed". CBC News. Retrieved 4 October 2013. {{cite web}}: Check |url= value (help)
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