What makes Trader Joe’s, Trader Joe’s?

Discussion
Getty Images/NicolasMcComber
Mar 02, 2020
Tom Ryan

Joe Coulombe, who passed away Friday at the age of 89, retired long before the chain he founded in 1967, Trader Joe’s, expanded nationally, but he hatched many of the ideas behind its success.

An initial innovation was the chain’s aspirational, yet affordable, positioning. Reading about the rise of college graduates, Mr. Coulombe believed younger adults would seek out quality food and be more adventurous in their diets than prior generations. Anticipating the Boeing 747’s arrival in 1969, he saw more overseas travel driving interest in exotic foods. He also found research showing educated individuals drank more.

But Mr. Coulombe also knew many of his target consumers would be on budgets, often describing them as “the overeducated and the underpaid.”

“What that originally meant was, everyone from underpaid musicians to out-of-work PhDs could come to Trader Joe’s and find elements of the lifestyle they aspired to for not too much money,” he told Supermarket News in 2010.

Affordability became a bigger selling point after Trader Joe’s first private label, a granola, launched in 1972.

Trader Joe’s was also often out front on trends, including California wines and better-for-you items, and known for its eclectic selections. The chain early on earned a reputation for stocking certain items for only a short time.

The nautical theme also added character as “captains” and “crew members” worked the floor. The first Hawaiian shirt was worn in 1969, the maritime bell in-store communication system arrived in 1975 and the first plastic lobster used as decoration came in 1976. Quirky names and descriptions on private labels, as well as the Fearless Flyer newsletter — which Mr. Coulombe described as “a marriage of Consumer Reports and Mad magazine” — were also designed to appeal to those aspirational customers.

Finally, TJ’s built a friendly, devoted staff with higher-than-average pay and full benefits.

Mr. Coulombe sold Trader Joe’s to Aldi Nord in 1979 and retired as CEO in 1988 when the chain had only 19 locations. Dan Bane, the chain’s CEO since 2001, said in a statement, “Joe was the perfect person at the right time for Trader Joe’s. He was a brilliant thinker with a mesmerizing personality that simply galvanized all with whom he worked.”

DISCUSSION QUESTIONS: What are the biggest innovations that Joe Coulombe and Trader Joe’s brought to the grocery marketplace? What roles do the chain’s product value proposition and in-store shopping environment play in consumer perceptions of the brand?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Coulombe's genuine appreciation for his workers created a caring culture that extends to consumers. What an inspirational legacy."
"Joe Coulombe’s genius was his ability to look at the business from the outside in."
"TJs is the original gustatory treasure hunt. They win and keep customers because they have great products, people and value."

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23 Comments on "What makes Trader Joe’s, Trader Joe’s?"


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Neil Saunders
BrainTrust

There are so many good things about Trader Joe’s. The food is good, the prices are low, they are always innovating with new dishes and flavors, the environment is fun, they use social media well, and customer service is really good. In short, it is a great proposition! None of this comes about by default, it is purposely designed. For example, good customer service is a function of treating and paying staff well and empowering them. There is a lot that other retailers can learn from TJs!

Brad Johnson
Guest
6 months 26 days ago

I totally agree, and also find it odd that Aldi (the owner) hasn’t tried to adopt some of the Trader Joe’s magic. I went to an Aldi once … that was enough.

Richard Layman
Guest
6 months 22 days ago

A lot of the coverage about the ownership of TJ’s is facile, blurring the relationship with Aldi, and that includes this piece. The Albrecht Family branch that owns Aldi Nord separately owns TJ’s, “as an investment.” There isn’t shared corporate control. Except for Germany, Aldi Nord and Aldi Sud operate in separate countries, Aldi Nord mostly in Europe, Aldi Sud in some European countries but mostly overseas. Aldi Sud has the territorial rights for and operates in the US. And if you want to save money, Aldi (Sud) in the US is a far better place to shop than TJ’s. But it’s not a specialty store in the same way, it’s a hard discounter.

Shep Hyken
BrainTrust

The answer to the big question of “What makes Trader Joe’s Trader Joe’s?” is simple: Culture. From the very beginning you could walk into a store and feel the difference between Trader Joe’s and most other retail stores (not just grocery). The theme is the theme. Many retailers try to create a look and feel. The quality of their products and the way they price has been consistent. From the beginning, they were known for having “something.”

Lee Kent
BrainTrust

Yes, every time I walk into Trader Joe’s, I feel like I’m at a party. And that does not happen by accident. They get my 2 cents every time.

Cathy Hotka
BrainTrust

My tiny Trader Joe’s is a zoo, but no one ever waits in line. That and the inexpensive fresh flowers, abundant cheese selection and unique snacks make it a must-visit. RIP “Trader” Joe Coulombe, and thank you.

Jeff Sward
BrainTrust

Joe really nailed the most important first step by clearly profiling his customer: “the over-educated and underpaid.” Informed and thrifty. And then he took it a step further by putting so much of the product under one umbrella, one brand. A private label becomes a proprietary label becomes a brand unto its own. Standing very simply for quality and value. And the density of shoppers at my local Trader Joe’s bears testimony to the lasting high level of execution. Trader Joe’s proved that distinction of choice, quality and value add up to a pretty good formula for success in retail.

Richard Layman
Guest
6 months 22 days ago

That’s part of it. But I once had a conversation with Herbert Haft, one of the earliest creators of discounting in the US (Dart Drug, etc.) and as he said, “it’s the people with money who are motivated to spend the least.” Given the RTA household income numbers for a typical TJ store, I think Herbert Haft must be right.

Suresh Chaganti
BrainTrust
Suresh Chaganti
Co-Founder and Executive Partner, VectorScient
6 months 27 days ago

They have clarity as to which customer segment and persona they are serving, and ensure the assortment and pricing is consistent with who they are serving. That is always a winning combo.

Richard Hernandez
BrainTrust

The nearest Trader Joe’s is three and a half hours from me, and I drive to it once a month. I think for me, it’s definitely the treasure hunt aspect of shopping there. Very helpful staff, I rarely have to wait in line and the pricing is not outrageous for a specialty store. Many retailers have copied the products over time. Does everyone remember when Cookie Butter was only available at Trader Joe’s?

Lisa Goller
BrainTrust

Trader Joe’s private label leadership has made elevated culinary experiences affordable. The chain’s marketing prowess, including limited-time offers, motivates consumers to visit more frequently to see what’s new (and grab the innovative goods while they’re available). Also, Coulombe’s genuine appreciation for his workers created a caring culture that extends to consumers. What an inspirational legacy.

Bob Amster
BrainTrust

Some of the very good things one sees in a typical Trader Joe’s are not even innovations. Example: if I ask for a product, an associate almost takes me by the hand to the exact spot and then asks me if s/he can help with anything else. Most other retailers do not do that. The stores are cheerful; not all others retailers’ stores are cheerful. The presentation is attractive and the value proposition is there. Not all other retailers offer that combination. The associates are polite, happy people (obviously, they are payed well). We can go on…

Dave Bruno
BrainTrust

One of the greatest innovations that Trader Joe’s brought to grocery retail is the absence of loss-leading promotions and the need for clipping coupons. When you shop at Trader Joe’s, the price on the shelf is the price at the register. What a concept. The Fearless Flyer promotes the attributes of their new additions to their assortment, not the deals of the week. Unfortunately, far too few have followed suit, as most of the rest of the industry continues to train shoppers to shop for loss leaders.

David Naumann
BrainTrust
David Naumann
Retail Industry Analyst
6 months 27 days ago

Neil Saunders nailed it with his statement that “there is a lot that other retailers can learn from TJs.” Beyond quality foods at fair prices, Trader Joe’s has cultivated a loyal following and some of the key contributors to that include: friendly staff that make every visit delightful, unique products that are only available at TJs, Fearless Flyer which customers look forward to and fold corners and mark up to remember to add products from it to their next shopping trip, and the list goes on…

Mohamed Amer
BrainTrust

Joe Coulombe’s genius was his ability to look at the business from the outside in. He faced impending severe competition from 7-Eleven when they came into the Southern California market. His courage to buck the taken-for-granted industry assumptions was unique, he created smaller, colorful and fun to shop stores full of private labels and exemplary service by happy and helpful employees. Trader Joe’s has come to represent the highest quality products, superior sourcing, hot coffee and taste stations, low prices, fastest checkouts, and a food treasure hunt atmosphere within a limited assortment. And all of that is executed flawlessly by putting great trust in their people. Simply put, Trader Joe’s remains unique in nearly every business aspect of the retail grocery industry.

Art Suriano
Guest

Simply said, Trader Joe’s is a fun place to shop. You will always find great products and exciting new items to try. And it is all delivered in an enjoyable shopping atmosphere. No other retailer has been able to duplicate the concept, although some have tried. One thing that is positive about Trader Joe’s is their smart growth, with only about 500 stores they have not oversaturated their market. It’s not uncommon to hear consumers wish for a Trader Joe’s closer to them, which means Trader Joe’s is not worried about closing stores. Each day you shop at Trader Joe’s, you’re bound to find something new and exciting. I don’t see Trader Joe’s doing anything but remaining successful.

Bob Phibbs
BrainTrust

He saw private label and knew what curation was about long before it was a buzzword with little meaning. His goal of culling laggards quickly set the bar for knowing what customers will purchase and what they won’t. Their store just feels better — as an ops guy, I know that it is a challenge to be brilliant on the basics. Doing that right started with Joe. And don’t overlook his passionate philanthropy for the arts — something sorely missing from most execs these days.

Frank Riso
BrainTrust

Trader Joe’s was one of if not the first informal grocer. I mean no white shirt and ties. They also innovated within the store and had a very FUN attitude toward their customers. They also have always been the best at selling mostly their own brand products which were of a higher quality. Their product proposition is not only a higher quality but at a lower or even equal price than the other chains. Lastly the staff makes the shopping experience a real pleasure with very helpful clerks, and the cashiers always seem to be having fun. Sometimes I think of Trader Joe’s as a mini-Costco since you never know what other items you will find there!

Richard J. George, Ph.D.
BrainTrust

Trader Joe’s was the innovator long before today’s leading innovator, Amazon, was even born. My favorite innovations: 1.) Trader Joe’s own-label including exotic products at terrific prices. Trader Joe’s gave legitimacy, to what at the time was private label, which up to that point had been viewed by customers as inferior products. 2.) Crew members who are not only friendly and engaging, but also extremely knowledgeable about Trader Joe’s products and services. Like Jeff Bezos and Sam Walton, Joe Coulombe left a treasure trove of terrific ideas. Success does leave clues, as evidenced by Trader Joe’s 50+ years of unheralded performance in the grocery industry.

Craig Sundstrom
Guest

As much as Mr. Coulombe should be given credit for his innovations, I think we should also give some credit to Herr Albrecht et al (under whom most of the company’s expansion has taken place). This was a happy case where new ownership left well enough alone … ah, that all grocery acquisitions could only go “sehr gut”!

Richard Layman
Guest
6 months 22 days ago

Good point. Just think what Steve Burd could have learned from the Albrechts with regard to their hands-off ownership. It’s amazing that billions of dollars of value in store chains in Chicago, Philadelphia, and Texas was destroyed by the wrong kind of hands-on management.

Patricia Vekich Waldron
Staff

TJs is the original gustatory treasure hunt. They win and keep customers because they have great products, people and value.

Ricardo Belmar
BrainTrust

Trader Joe’s innovated on so many different levels — unique, high-end quality and luxurious private labels, well-paid associates, low prices, the thrill of the treasure hunt, limited availability to drive interest, and overall great customer service. Where did all of this come from? A great corporate culture that not only promotes and rewards but just delivers a complete feeling of “something different” from the moment you enter the store. They didn’t just create a unique look and feel, they ARE a unique look and feel throughout the organization — and customers both see and feel it every they come back to the store! That’s why customers want to come back time and time again.

wpDiscuz
Braintrust
"Coulombe's genuine appreciation for his workers created a caring culture that extends to consumers. What an inspirational legacy."
"Joe Coulombe’s genius was his ability to look at the business from the outside in."
"TJs is the original gustatory treasure hunt. They win and keep customers because they have great products, people and value."

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