Trader Joe's

Trader Joe's

Type	Private
Industry	Retail (grocery)
Founded	1958 (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	US$ 9.38 billion (2014)
Net income	US$ 578 million (2014)
Number of employees	10,000+[3]
Parent	Aldi Nord
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, with about half of them located in California, with the highest prevalence in Southern California. The company also has locations in 40 other 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

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.^[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.

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 2009 at $8 billion, and placed Trader Joe's 21st on the list of "SN's Top 75 Retailers for 2011."^[11] In 2010, 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 November 2005, Trader Joe's announced that all eggs under its label would come from cage-free hens.^[12]

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

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 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 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

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" 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 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 concerns that standards on "organic" products from the country are not as stringent as they should be. From February to April 2008, Trader Joe's claimed to have phased out single-ingredient products from China due to concerns over tainted goods.^[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 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 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.^[23]

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.^[24]

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

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

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^[25]

• The retailer has been characterized as "notoriously secretive"^[26] and has been criticized for a lack of transparency by management about the sources of products such as organic milk.^[27][28]
• 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.^{[29][30][31][32]} 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.^[33] 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.^[34] On April 12, 2015, Pirate Joe's Owner, Michael Hallatt was featured on CBS Sunday Morning national newscast where he discussed the lawsuit and took the cameras behind the scenes to show his system of buying Trader Joe’s supplies and hauling them up north to Vancouver, B.C., Canada.^[35]
• In September 2013, in response to the implementation of the Affordable Care Act (ACA), Trader Joe's explained that it would drop health insurance options for its part-time employees in order for most of them to become eligible for the less expensive plans available under the ACA (but available only to those whose employers do not offer them an insurance plan). In January 2014, the company issued part-time employees 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 were unaffected.^[36]
• 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.^[37][38]

References

External links

Wikimedia Commons has media related to Trader Joe's.

• Official website
• "Meet the original Joe", Fortune Magazine, August 23, 2010