Trader Joe's

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Trader Joe's
Private
Industry Retail (grocery)
Founded 1958; 58 years ago (1958) (as Pronto Market)
1967 (1967) (as Trader Joe's)
Pasadena, California, U.S.
Founder Joe Coulombe
Headquarters Monrovia, California, US
Number of locations
460 (as of October 28, 2016)[1]
Key people
Dan Bane, CEO
Products Private label staple foods, organic foods and specialty products[2]
Revenue IncreaseUS$ 13 billion (2015)
Number of employees
38000+[3]
Website www.traderjoes.com

Trader Joe's is a privately held chain of neighborhood grocery stores based in Monrovia, California, in Greater Los Angeles. As of October 28, 2016, Trader Joe's had 460 stores nationwide in 41 states and in Washington, D.C.[1] By 2015, it was a competitor in "fresh format" grocery stores in the United States.[4][5]

Trader Joe's was founded by Joseph "Joe" Coulombe and has been owned since 1979 by a German family trust established by Aldi Nord's owner Theo Albrecht.[6] The company 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's 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 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.

Theo Albrecht of Aldi Nord bought the company in 1979 as a personal investment for his family.[6] 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.[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 as CEO after being the President of the Western Division. When Dan became CEO there were 156 stores in 15 states.[11]

Trader Joe's, Saugus, Massachusetts

BusinessWeek reported that Trader Joe's quintupled the number of its stores between 1990 and 2001, and multiplied its profits by ten.[6] 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."[12] 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.[2]

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 2015."

The May 2009 issue of Consumer Reports ranked Trader Joe's the second-best supermarket chain in the United States (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 from 2008 to 2010, Trader Joe's did not make the list in 2011.[15][16][17] In 2014, Consumer Reports again ranked Trader Joe's a top-scoring supermarket chain.[18]

Locations[edit]

Trader Joe's is known for its unusual store locations – this Trader Joe's store in Cobble Hill, Brooklyn, New York, is in a converted bank building

As of October 28, 2016, Trader Joe's had 460 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.[2]

Products[edit]

Interior of Trader Joe's in the Alabama Theatre in Houston

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. 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.[19] In October 2007, Trader Joe's began to phase out foods imported from China amid customer concerns. From February to April 2008, Trader Joe's phased out single-ingredient products from China because of customer concerns.[20] 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.[21]

Trader Joe's discontinues individual products based of customers' reactions more often than larger grocery chains to free up space for new items."Why does TJ's frequently discontinue products?". Trader Joe's. Retrieved January 15, 2010. </ref>

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.[2] Their 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 (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 label, Trader Joe's "skips the middle man" and buys directly from both local and international small-time vendors.[22]

Two Buck Chuck for sale at Trader Joe's

Trader Joe's is the exclusive retailer of Charles Shaw wine, popularly known as Two Buck Chuck[19] 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.[23]


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), or MSG. In addition, its private-label dairy products use milk from cows not given the artificial growth hormone rBST.

Employee compensation[edit]

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

Criticism[edit]

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

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

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).

— Cameron Scott, San Francisco Chronicle, 2013[24]
  • The retailer has been characterized as "notoriously secretive"[25] and has been criticized for a lack of transparency by management about the sources of products such as organic milk.[26][27][needs update]
  • In August 2013, Trader Joe's, which has no stores in Canada, filed a lawsuit in Washington state against the owner of Pirate Joe's, a Vancouver, B.C.-area Canadian grocery store, for trademark infringement, false designation of origin and false advertising, among other claims.[28][29][30][31] The owner of Pirate Joe's bought large quantities of products from Trader Joe's stores in Washington, and resold them at a slightly higher, grey market price in Canada.[32] 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.[33] On August 26, 2016 the Ninth Circuit Court of Appeals overturned the lower court's decision, ruling that TJ's case could proceed because the Canadian store could devalue and American-held trademark. [34]
  • In September 2013, in response to the implementation of the Affordable Care Act (ACA), Trader Joe's explained that it would require part-time employees to work an average of 30 hours per week to qualify for medical insurance (with free coverage for basic dental and vision care still available for all Crew Members who work an average of 15 hours or more per week). Part-time employees not qualifying would now be eligible for the less expensive plans available under the ACA (but available only to those whose employers do not offer them an insurance plan). Those working full-time were unaffected.[35]

References[edit]

  1. ^ a b "Where in the dickens you can find a Trader Joe's?" (PDF). Trader Joe's. Retrieved June 6, 2016. 
  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. ^ "Trader Joe's CO Inc". Manta. Retrieved March 26, 2015. 
  4. ^ Lutz, Ashley (October 7, 2014). "How Trader Joe's Sells Twice As Much As Whole Foods". Business Insider. Retrieved June 28, 2015. 
  5. ^ "Whole Foods Is Slowly Killing Traditional Supermarkets". Retrieved 2016-09-22. 
  6. ^ a b c d Armstrong, Larry (April 26, 2004). "Trader Joe's: The Trendy American Cousin". BusinessWeek. Retrieved November 27, 2009. 
  7. ^ "[1]." Trader Joe's. Retrieved on April 2, 2016.
  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. ^ Supermarket News 2001
  12. ^ "SN's Top 75 Retailers for 2016". Supermarket News. January 2017. Retrieved January 25, 2017.  Check date values in: |access-date= (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. Archived from the original on January 11, 2010. Retrieved February 13, 2010. 
  16. ^ "2009 World's Most Ethical Companies". Ethisphere Magazine. April 2009. Archived from the original on January 10, 2010. Retrieved February 13, 2010. 
  17. ^ "2010 World's Most Ethical Companies". Ethisphere Magazine. April 2010. Archived from the original on April 19, 2010. Retrieved April 26, 2010. 
  18. ^ "Wegmans, Trader Joe's, Publix, Costco & Sprouts Top Consumer Reports Supermarket Ratings". Consumer Reports. March 26, 2014. Retrieved April 5, 2014. 
  19. ^ a b The American Way of Aldi, Deutsche Welle, January 16, 2004.
  20. ^ Hirsch, Jerry (February 12, 2008). "Trader Joe's halting some Chinese imports". Los Angeles Times. 
  21. ^ "Carting Away the Oceans 7" (PDF). Retrieved November 2, 2013. 
  22. ^ 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. 
  23. ^ Franson, Paul. "The Origins of Trader Joe's and Why Americans Don't Drink More Wine". Novus Vinum. Retrieved November 5, 2008. 
  24. ^ Cameron Scott, "Trader Joe's Gets It Easy?", San Francisco Chronicle, March 26, 2009. Accessed March 30, 2013
  25. ^ Julia Moskin, "For Trader Joe's, a New York Taste Test", The New York Times, March 8, 2006. Accessed March 30, 2013
  26. ^ 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
  27. ^ MSN Money, May 2, 2013 Archived May 4, 2013, at the Wayback Machine.
  28. ^ 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. 
  29. ^ Chris Roberts (August 16, 2013). "Trader Joe's Sues Canadian Pirate Outlet". NBC Bay Area. Retrieved September 29, 2013. 
  30. ^ 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. 
  31. ^ Rene Lynch (August 27, 2013). "Pirate Joe's: Vancouver business sued for reselling Trader Joe's faves". Los Angeles Times. Retrieved September 29, 2013. 
  32. ^ "Trader Joe's pursues lawsuit against Canadian 'pirate'". CBC News. August 20, 2013. Retrieved August 28, 2013. 
  33. ^ "Trader Joe's loses fight with Vancouver's Pirate Joe's". CBC News. October 4, 2013. Retrieved January 5, 2014. 
  34. ^ Gersham, Jacob (August 26, 2016). http://blogs.wsj.com/law/2016/08/26/trader-joes-vs-pirate-joes-apeals-court-revives-cross-border-trademark-fight/
  35. ^ Denver Nicks (September 17, 2013). "Trader Joe's Explains why its cutting health benefits for part timers". The Washington Post (reprinted at swampland.time.com). Retrieved October 8, 2013. 

External links[edit]