
Inside the secret world of Trader Joe's   - jakarta
http://money.cnn.com/2010/08/20/news/companies/inside_trader_joes.fortune/index.htm
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ben1040
The Trader Joes return policy is pretty amazing. For the first 5 years I
shoped there I never even thought to bring something back, but then once a few
years back I felt the need to give it a test -- and honestly I couldn't
believe they'd even accept a label off a microwave dish and my word that it
tasted awful.

The manager was cheerful about it, and told me I wasn't the first person to
bring back that particular item. Then he reeled me in:

"I'll gladly get you a refund; did you have any other shopping to do today? I
can have the checker credit your order."

"Oh... I suppose I do."

I returned an item that cost less than $2, and then ended up buying a week's
worth of groceries at $50.

Zappos may be the only other company I can think of that has the kind of
return policy that increases revenue in the long run.

~~~
portman
Amazing timing - I returned my first ever item to Trader Joe's today, and the
experience was memorable.

My wife bought blackberries this morning. Tonight, after dinner, we realized
they were moldy. I went to exchange them at about 8:30 pm, just before
closing. The store was out of blackberries, though. I called home to ask if
there was anything else I should get.

"Olive oil" was the answer. So I walk up to the counter, ready to do an
exchange, and the cashier looked at the $8 bottle of Olive Oil, the $3 carton
of moldy blackberries, and said:

"Yeah those are about even. Have a good night." He then shooed me out the door
without even ringing anything up on the computer.

That kind of autonomy is not what you expect from ANY retail establishment,
let alone a grocery store.

~~~
qq66
I once bought a package of smoked salmon at Trader Joe's. It was gross, so I
took it back, and the guy asked me to try a different brand instead. I said
"OK," and it was gross again. I went back very apologetic just asking for a
refund, and he asked me to try a third type. I refused entirely, until he MADE
me take the third type of smoked salmon. That third type was really good and
I've probably bought $200 worth of it since that day.

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anigbrowl
FYI, the rather reclusive owner of the company, Theo Albrecht, died quite
recently. It may surprise you to know he was one of the world's richest men.

TJs has the lowest number of different products in it stores of any major
supermarket, plays employees significantly above the industry average
($40-60k; managers can earn 6 figures), gets a far greater $/sq foot return
than competitors, and does over $8 billion a year in sales. And pretty much
everyone likes them.

Herr Albrecht is a pretty good role model if you ask me.

[http://www.guardian.co.uk/business/2010/aug/05/theo-
albrecht...](http://www.guardian.co.uk/business/2010/aug/05/theo-albrecht-
obituary)
[http://online.wsj.com/article/SB1000142405274870489500457539...](http://online.wsj.com/article/SB10001424052748704895004575395251115540766.html?mod=europe_home)

~~~
rivo
If you would like to know more about what made the Albrecht brothers' stores
so successful, you should read Dieter Brandes's book. It think the English
version is this one:

[http://www.amazon.com/Bare-Essentials-ALDI-Way-
Retailing/dp/...](http://www.amazon.com/Bare-Essentials-ALDI-Way-
Retailing/dp/0954282973/)

~~~
sammyo
Yikes, used for $500! Looks like a publishing model that is seriously being
missed. I know a screenwriting book that sells for a couple hundred if it can
be found. A lot of work to get the copyrights for a short publishing run but
sure looks like it could be lucritive.

------
iamelgringo
Trader Joe's is a boostrapper's dream: cheap, tasty and quick meals.

Their prepared foods and marinated meats are really pretty good. Their cheese
and wine selections are quite good. I found a Petite Syrah I absolutely _love_
there for $3.99. We buy it by the case. Bread is consistently some of the
better bread I've found outside of dedicated bakeries here in the US (our
bread generally sucks). A glass of wine ($3.99 a bottle), a loaf of bread
($1.99 a baguette lasting a day or two), a bit of low fat goat's milk brie
($2.99 a round lasting several days), a bit of sliced salami ($2.99 a for 2
salami's lasting 4 meals), some dried almonds ($3.00 for a pack of 20 mini
bags), and I have very tasty no-cook meals for a day or two.

If you're in Silicon Valley (or anywhere that has a Joe's), and trying to eat
well on a budget visit Trader Joe's.

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pwim
Perhaps the most relevant point:

 _A closer look at its selection of items underscores the brilliance of
Coulombe's limited-selection, high-turnover model. Take peanut butter. Trader
Joe's sells 10 varieties. That might sound like a lot, but most supermarkets
sell about 40 SKUs. For simplicity's sake, say both a typical supermarket and
a Trader Joe's sell 40 jars a week. Trader Joe's would sell an average of four
of each type, while the supermarket might sell only one. With the greater
turnover on a smaller number of items, Trader Joe's can buy large quantities
and secure deep discounts. And it makes the whole business -- from stocking
shelves to checking out customers -- much simpler._

~~~
barrkel
I see the opposite side of that here in London. All the main supermarkets -
Tescos, Asda, Morrisons, etc. - have very little in the way of product choice.
Living in east London, I have to go well out of my way to find a different
branch of Sainsburys or Waitrose to get certain products.

For example, "McCains Simply Gorgeous Chunky Chips", a variety of oven chips
in beef dripping, is vanishingly rare; there's a Sainsburys in Bethnal Green
which sells them, but that's going well into the city.

Similarly, for The Berry Company juices - things like açaí, blueberry, goji
berry - I have to go to Waitrose in Canary Wharf. Other Waitrose outlets are
hit and miss, with patchy coverage of the line; and there's virtually no
chance of finding the products elsewhere.

I was amused to find once I went to a Tescos Extra that they largely just had
twice the space on the shelf for the same number of SKUs.

~~~
parallax7d
From what I've read, Brits don't have the insane supermarkets we do here in
the states.

~~~
adw
Tesco's one of the world's most profitable retailers (I think it's #4
globally) and ASDA is a subsidiary of Wal-Mart. London's just a special case -
where do you put an out-of-town superstore in zones 1 or 2 of the Tube map?

~~~
barrkel
I wouldn't mind if they were in zones 4 or 5, but it still doesn't add much
choice. Tesco Extra stores aren't exactly small, but they still don't have
much choice in the grocery side.

If a different store had the range, I'd go there instead. But each store
targeting a slice of the demographic pie has very much the same limited range
with a tiny bit of diversity outside of store brands.

------
ryanricard
Wow, I've been a regular Trader Joe's shopper ever since one opened up down
the street about a year ago. Frankly, I was always a bit worried that between
the price and the quality there was a "too good to be true" angle that I was
missing. But from this article, it seems like they rely on:

* Buying good food

* Distributing it efficiently

* Paying their employees well.

I don't really care how "quirky cool" they are or are not, that's pretty
sweet.

------
jswinghammer
I love Trader Joe's. They have an excellent supply of fancier foods and a
pretty good selection of pantry items at good prices. I feel as though I get
the same level of quality from them without paying for it like I do at Whole
Foods.

I love the New Zealand Cheddar they sell there. I have no idea why but it's my
favorite cheese. My two year old daughter can't get enough of it either so
maybe it's genetic.

~~~
TheEzEzz
My understanding is New Zealand cows are grass fed. Makes a difference, I
think. (Irish cows too. Try the Kerrygold Dubliner cheese at TJs. Try the
Kerrygold butter too. Now _that's_ butter!)

------
speek
Trader Joe's and GE are two of my favorite companies mostly because of their
amazing depth of vertical integration. They've got this stuff down to an art
form.

~~~
splat
GE really is an incredible "behind-the-scenes" sort of company. When you first
think of GE, you probably think something along the lines of "Oh yeah, don't
they make light bulbs or something?" But the more you look into them, the more
you realize just how big and diversified that company is. Taking a look at
[http://en.wikipedia.org/wiki/List_of_assets_owned_by_General...](http://en.wikipedia.org/wiki/List_of_assets_owned_by_General_Electric)
is a good starting point, and then start clicking on the links therein and
you'll probably find that GE is behind a lot of products and involved in a lot
of industries that you'd never have guessed.

~~~
rdtsc
I was surprised to learn that GE owns NBC, Telemundo, and Universal Pictures.

~~~
shrikant
Clearly you haven't watched/heard of 30 Rock.

~~~
rdtsc
I know what it is. I don't really watch TV shows much.

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314159265
The vicinity of Trader Joe's is actually a significant consideration whenever
I relocate.

~~~
rtyuioiujhygf
As a european grad student at Caltech - I can say that the pasadena Trader
Joe's bread and cheese is the only thing that allowed me to survive American
(or at least LA) cuisine.

~~~
Anjin
Uhhhhhh, I'm guessing that you were eating cheap. There's no reason that you'd
have to "survive" LA cuisine unless you actually didn't spend money on it and
just went to McDonalds. There are amazing restaurants in LA. Lots.

~~~
waterlesscloud
There's plenty of good cheap places to eat in LA too, especially if you
broaden your horizons a bit. The range of cuisines here is quite extensive.

~~~
rtyuioiujhygf
Well it was Pasadena, so Mexican or McD were the options.

Go into an American supermarket and there are dozens of types (or at least
shapes) of bread - all the same oversweet soft wonderloaf inside, and dozens
of types (or colors) of cheese - that all taste the same.

When I lived there, live cheese was banned, pot is being legalized but Brie is
illegal !!!!

------
Cowboy_X
This fan-made commercial says it
all:[http://www.youtube.com/watch?v=OdB7GDZY3Pk&feature=youtu...](http://www.youtube.com/watch?v=OdB7GDZY3Pk&feature=youtube_gdata_player)

And now it's stuck in your head! _ding_

~~~
illumin8
Great commercial. I recognized almost every product there. TJ really does have
a unique and eclectic mix of food. The thing I notice is that I can find 99%
of all the items I need when grocery shopping there but I only end up spending
$50-60 a week instead of $100 or more that the same items would cost at a Stop
and Shop or Whole Foods.

The one thing they seem to be lacking is a meat and seafood department. All
their meat is shipped in; it's not bad, but it can't compare to Whole Foods.
My solution is to get everything at TJ, then stop by Whole Foods to buy a
pound of fish and chicken. Best of both worlds...

~~~
amalcon
This works extremely well for me also. The Cambridge Trader Joe's is extremely
close to a whole foods.

------
zwieback
It's a real tragedy when TJs discontinues one of your favorite items. Still
mourning the loss of those flat New Zealand buiscuits filled with apricots and
raisins. Also the pomegranate syrup is gone...

------
daveambrose
My GF and I have done a lot of shopping at the Chelsea store from the article.
Funny the author pointed out "random Manhattan strangers" as I noticed this
yesterday when we did our week shopping.

I think the Chelsea store opened a few weeks back, as someone from our office
stumbled upon it and brought back peanut butter filled pretzels nuggets -
which were awesome. Needless to say, once I heard they opened a TJ in the
area, I had to stop by and experience it.

The Chelsea store is so much more open with high ceilings compared to the
Union Square location. If you live in NYC, I recommend shopping in this
location.

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YiddishPolice
Trader Joe's, come to Colorado, you can make the long haul work, I promise.

~~~
matrix
Hey, not before they come to Utah first!

Kidding aside, I used to live one block away from a Trader Joe's and am sort
of over them now. It can be a frustrating place to shop when you just want
'regular stuff', rather than paying the markup for fancy varieties of things.
It's very nice to have as a supplement to a normal grocery store though.

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joe_the_user
Trader Joe's is pretty clever.

I go there and there are about fives things I want and which are good deal.
Then there are ten things I'd buy if I was in a hurry and are only a good deal
if want I to pay premium for processed stuff. I get a good deal there but I
suspect most customers throw down a lot of money for convenience that isn't
cheap or healthy - but I suppose that's what they want.

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siculars
A Trader Joe's is opening in the on 72nd and Columbus in Manhattan that. It's
already causing the local groceries to change their game and they haven't even
opened yet.

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analyst74
Among a generally critical-minded crowd like HNers, Trader Joe has not gotten
a single bad comment.

I am impressed.

