Inside the bizarre business strategies of Trader Joe’s

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The entrance of Trader Joe’s in Culver City, California. More than 500 of these stores exist nationwide. Photo by Amy Ta.

Whether it’s the “Two-Buck-Chuck,” those peanut butter-filled pretzel nuggets, or that “Everything But The Bagel” seasoning blend, most Southern Californians are well-familiar with the quirky grocery staple Trader Joe’s.

First opened in Pasadena in 1967 by founder Joe Coulombe, it has grown to become a national chain with more than 500 stores.

In his memoir, “Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys,” which came out posthumously earlier this year, Coulombe dives deep into the out-of-the-box business strategies that still to this day separate his stores from the rest.

He started his entrepreneurial career as the owner of a chain of California convenience stores called Pronto Markets, which was being threatened by 7-Eleven. 

“He started to notice little things here and there about the business and about what was happening in culture,” explains Carrie Battan, a contributing writer at The New Yorker who read and reviewed the memoir. “There were certain, what he called, discontinuities in products that he could exploit. Like if somebody had leftover eggs or … weird batch of milk … some unusual product that they couldn’t necessarily get rid of, he could find a way to package it and sell it.”

She adds, “He sort of learned a lot of little loopholes and particularities of the grocery business that he leveraged when he launched Trader Joe’s,”

Coulombe was an expert on local legislation, and he always found ways to outsmart California’s legislation on alcohol, tobacco, and coffee, she says. 

He was also about respecting his workers and customers (allegedly), and when he sold Trader Joe’s to a German company in the late 1970s, it’s unclear whether the new ownership and management stuck to his fixation on ethics, explains Battan. 

Over the past few years, the grocery chain has been criticized for using ethnic-sounding labels and disguising products made by PepsiCo and other brand giants in its packaging. But you won’t find Coulombe’s response to that pushback in his memoir, since he wrote the manuscript in the 2000s.

Battan recommends the memoir to eager business entrepreneurs as well as TJ loyalists, like herself, who are curious about how his quirky business model worked.

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