Trader Joe’s – A German-American Success Story
Trader Joe’s is one of the grocery chains that help Germans keep in touch with their basic culinary roots. TJ’s is the store of choice when it comes to get Westphalian smoked ham if you don’t live close to a German-style deli. The quality of the food is excellent, and the employees are friendly. And many items at TJ’s are sold only here. One of the reasons for TJ’s success is the concept of the original Trader Joe, Joe Coulombe, who opened the first store in Pasadena 43 years ago and ventured into affordable health food in the 1970s. Today Trader Joe’s is owned by the famous German Albrecht family through a family trust, and has 344 stores in 25 states in the US.
by Alexander Hast
Theo Albrecht, with his brother, among Europe’s richest men with an estimated fortune of 17 billion euros, died at age 88 in July. He was the co-founder of Germany’s worldwide discount supermarket chain ALDI, called Hofer in Austria and a co-owner of Trader Joe’s in the United States. With his brother Karl Albrecht he built a discount supermarket chain that spread all across Europe, expanding stores to France, Spain, Portugal, Poland and the United States, among other countries. The acronym Aldi stands for “Albrecht Discount,” and Aldi has over 8,000 stores around the world,.
The chain, based in Monrovia, California, offers good jobs and excellent pay for their employees, so this enthusiasm also has financial backing. In surveys employees have voted TJ’s one of the best places to work.
The company’s sales in 2009 were about $8 billion, and profit does not come through expansion of the chain by opening many stores. Trader Joe’s has a very conservative strategy. It is opening just five new locations in 2010. The company selects relatively small stores with a specific selection of items. While a typical grocery store carries 50,000 so called stockkeeping units, or SKUs; Trader Joe’s sells only about 4,000 SKUs, and about 80% of them are Trader Joe’s brand. The result: Their stores sell double the amount in merchandise per square foot than Whole Foods. The company has no debt and funds all growth from its own capital.
Few customers realize the chain is owned by Germany’s ultra-private Albrecht family, the people behind the Aldi Nord supermarket empire. A different branch of the family controls Aldi Süd, parent of the US Aldi grocery chain. Most German immigrants are aware of it, because they find many of the products they know from the ALDI chain. They also find the quality missing from many products in bigger chains.
The rise of Trader Joe’s reflects Americans’ changing attitudes about food. While Trader Joe’s is not a health food chain, it offers lots of organic food. It sells billions of dollars in food and beverages that years ago would have been considered upscale. The genius of Trader Joe’s, so some business insiders claim, is staying a step ahead of Americans’ increasingly adventurous palates with interesting new items that shoppers will collectively buy in big volumes.
Joe Coulombe opened the first Trader Joe’s to serve a sophisticated consumer. He named the store Trader Joe’s to evoke images of the South Seas. He offered convenience store items and good booze. Trader Joe’s continued the wine tradition with it’s famous Two-Buck Chuck, the $1.99 Charles Shaw label. After Coulombe added health food and was operating more than 20 locations by the end of the 1970s, German grocery mogul Theo Albrecht wanted to be part of Trader Joe’s as a smart financial investment. In 1979 Coulombe sold his company to Albrecht. Coulombe stayed on and led the company for another decade with his secret of success: happy employees and excellent merchandise for sophisticated shoppers.
About 1,000 ALDI stores exist in the US, operating under the Aldi banner. The website www.aldifoods.com helps you to find an Aldi in your area; www.Traderjoes.com will help you to find your neighborhood TJ’s.
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