INSIDE TRADER JOE’S FORTUNE MAGAZINE Caitlan Fetzer, Julia Hale, Ashley Warney.

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Presentation transcript:

INSIDE TRADER JOE’S FORTUNE MAGAZINE Caitlan Fetzer, Julia Hale, Ashley Warney

Health Food Store?

Private labels  80% of Trader Joe’s SKU’s are private labels  Some resemble familiar brands (Joe’s O’s)  Some well known manufacturers will make a variation of their product specifically for the Joe’s label Example: Trader Joe’s pita chips are made by Stacy’s, a division of Pepsi-Co’s Frito Lay

Their Secrets to Success?  Limited Selection-High Turnover Model  Example: Joe’s sells 10 varieties of peanut butter while the average grocery store sells 40 varieties  Sells about 4,000 SKU’s vs. average 50,000 SKU’s  “With greater turnover on smaller number of items, Trader Joe’s can buy large quantities and get deep discounts”  Smaller number of items makes stocking shelves and checking out customers much simpler  Sells estimated $1,750 in merchandise per sq. ft  More than double what Whole Foods sells

Their Secrets to Success?  They’re trendy  “Trader Joe’s doesn’t pick up on trends – it sets them”  High list celebs are consistently seen at its stores  Mom & Pop feel (neighborhood stores)neighborhood  While being a national chain, it maintains the small town feel  Smaller selection = happier customers  “A wide selection can lead to shopping paralysis”  Specialty Items  “Exotic affordable luxuries”

Too Secretive?  They keep their image by keeping things “hush hush”  Declined many requests to speak to Fortune about business operations  Few customers know they are actually owned by the Albrecht family (ultra private supermarket empire)  Famous in Germany for not talking to press  This article was obtained over a 2 month period by speaking with former executives, competitors, industry analysts, and all involved asked not to be named.

Relation to Class?  Trader Joe’s supply chain (minimize length of channel)  Purchase directly from manufacturers  Product then shipped directly to Trader Joe’s distribution centers  Keeps costs low and supplier relations strong

Sources  Kowitt, Beth. "Inside Trader Joe's." Fortune Magazine 6 Sept. 2010:   es/inside_trader_joes_full_version.fortune/index.ht m es/inside_trader_joes_full_version.fortune/index.ht m