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Trader Joe's: Successful, But Secretive

Trader Joe's Opens Its First Store In New York City

hide captionA shopping cart at Trader Joe's in New York City.

Michael Nagle/Getty Images

In the most-recent issue of Fortune magazine, reporter Beth Kowitt goes "inside the secret world of Trader Joe's," which she calls "an offbeat, fun discovery zone that elevates food shopping from a chore to a cultural experience."

It stocks its shelves with a winning combination of low-cost, yuppie-friendly staples (cage-free eggs and organic blue agave sweetener) and exotic, affordable luxuries — Belgian butter waffle cookies or Thai lime-and-chili cashews — that you simply can't find anyplace else.

Employees dress in goofy trademark Hawaiian shirts, hand stickers out to your squirming kids, and cheerfully refund your money if you're unhappy with a purchase — no questions asked.

Although it is wildly successful, Trader Joe's executives aren't shouting from the rooftops. The company is notoriously private. It rarely agrees to interviews. No signs identify the location of its headquarters in Monrovia, Calif.

So, what's the secret?

"It has a very streamlined distribution center, which takes out a lot of the costs, but also, they buy directly from producers whenever possible, which takes out a lot of costs," she told NPR's Renee Montagne.

There are no middlemen involved. No distributors. The company buys everything in bulk.

The chain was born in Pasadena, Calif., some 43 years ago, when Joe Coulombe opened a grocery store "to serve a sophisticated — but strapped — consumer."

According to Kowitt, "he had the idea that this growing class of well-educated consumers that was well-traveled was going to want things that remind them of being abroad."

In 1979, Coulombe sold Trader Joe's to Theo Albrecht, a German grocery mogul, for a price he claims he can't remember. Since then, the company's day-to-day operations have been shrouded in secrecy.

"They don't want to talk about who is supplying them," Kowitt said.

They don't want to talk about their streamlined distribution center. They don't really want their consumers to know that Stacy's, which is owned by PepsiCo's Frito-Lay, is making their pita chips. They would rather you think it's Trader Joe's brand.

According to Kowitt, as the chain continues to expand, it could lose some of its je ne sais quoi.

"I think they're going to have to work to keep that quirky offbeat vibe as they get bigger," she said.

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