We know you love Trader Joe's. We know you sprout a little food boner every time you see that logo or think, maybe, about the aisles teeming with fresh produce, cheap tortilla chips, naan bread, bags of frozen orange chicken and boxed pizzas and cut-rate wine and pies. But did you ever wonder exactly how the place is able to offer the goods at such low prices? What it is about Joe's business model that allows it to feel and act like a little neighborhood grocery store while maintaining nearly 350 stores in 24 states?
Yeah, well you're not the only one. There are actually two ways that Trader Joe's is able to do this. The first is by cutting out as many middlemen as possible and having the bulk of their product brought straight from the producer to their distribution centers--having farmers and growers and companies produce stock for them as though they were some kind of weird, privately-held farmers market bringing everything from organic lemons to the olives for their olive medley to the cheeses in their cheese section and all that frozen, prepared food straight from the field or factory to your neighborhood store with as few stops as possible in between. This (along with the volume of their purchases), allegedly saves them a ton of money and allows them to sell their products cheaper than pretty much any other grocery store around.
And the second way they're able to sell so cheaply?Well that's the thing... No one really knows how else they do it. And the people from Trader Joe's (which is headquartered in Monrovia, California, but is owned by the Albrecht family in Germany), perhaps having taken a cue from the Albrechts, who also run the German supermarket chain Aldi and are notoriously tight-lipped around the press, ain't talking.
As a matter of fact, things around Joe's HQ are so secretive that Fortune magazine recently spent two months trying to get the inside scoop on how Trader Joe's runs its business. And when that failed utterly (they couldn't get anyone from inside the company to speak on the record--no surprise since no one from Trader Joe's has ever participated in a major story about its business practices), what they got was the outside scoop: "To get inside the mysterious world of Trader Joe's," the magazine wrote, "Fortune spent two months speaking with former executives, competitors, industry analysts, and suppliers, most of whom asked not to be named."
Still, what they came out with after two months of investigating was an interesting tale of limited supply, voracious demand, $2 wine and the particular genius of founder Joe Coulombe. Even though it doesn't patly answer a lot of the questions that more skeptical consumers have about Joe's, the story is a good one, and you can read the full version by clicking through this link right here.
As for me, reading the whole thing just made me hungry. Luckily, I've got a few bucks, a wicked hunger for some white cheddar popcorn and frozen orange chicken, and a Trader Joe's right around the corner from my house.