Trader Joe’s Does More With Less

Jul 28, 2003
George Anderson

By George Anderson

The average Trader Joe’s store carries approximately 2,500 items compared to
the 25,000 or more found in other stores. It operates stores, in some instances,
that are barely larger than a good-sized convenience store. How then does this
199-store chain generate billions of dollars in sales?

It concentrates on offering unique specialty and natural food items, mostly
under its own store labels, at prices at or below mainstream supermarkets.

Trader Joe’s chief executive officer and chairman, Dan Bane described what
makes his company different to the New York Times. “It’s a company that
is kind of a loose-tight company. We’re very controlling and tight about the
cost structure and processes; we’re very loose about how we want the stores
to run.”

Knowing what makes Trader Joe’s successful and duplicating it are two very
different things according to Gary Giblen, research director, C.L. King Associates.
“It’s really a world-class format. It’s not that easy to copy because they have
thousands of vendor relationships all over the world. That takes some skills
to develop.”

Moderator’s Comment: Why aren’t there more Trader Joe-like
companies in food retailing?

Judi Brosnan, a Trader Joe’s customer, says it the human
touch that differentiates the store from all others. “It’s much more personal.
They’ll (crew members) recommend stuff. Like: ‘Oh, did you try this? If you
haven’t tried it, go get it. Try it, you’ll love it.’ ”

Anderson – Moderator

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