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January 27, 2006

"The Trader Joe's Adventure"

I've just finished a really interesting book on hip urban retailer Trader Joe's: "The Trader Joe's Adventure" I'd seen a recent mention of it in a magazine, and managed to snag it from the SPL.

Now, I'm a fan of Trader Joe's - I love their selection of quirky products, and I dig their eclectic (and generally inexpensive) wine collection. What I didn't know, however, was anything about the history of the business or its general strategy.

Short version: California entrepreneur Joe Coulombe started the business as a chain of convenience stores in the '60s. When 7-11 started getting popular, he changed his strategy in order to differentiate himself. He started buying and stocking "affordable gourmet" foods from obscure vendors, and quickly gained a cult consumer following from people who wanted quality, hard-to-find luxuries at low prices. In the late 1970s, Coulombe sold his business to German retailer Aldi. (Coulombe now blogs about his main passion, wine, at www.winejoe.com.)

Today, Trader Joe's is a privately-held grocery store that flaunts most industry conventions. Their stores are small. They stock only a handful of products relative to a generic Safeway or QFC. Where most grocers push national brands, some 80% of Trader Joe's products are private-label, designed exclusively for the store, and completely unique. TJ's is also different in its real estate strategy, hiring/retention policies, marketing, and approach to growth.

The book is good, but does suffer from two things. First, it's a bit booster-ish - the author, Len Lewis, is an industry insider, and clearly loves Trader Joe's. This hurts his objectivity a bit. Second, both Aldi and Trader Joe's don't talk much to the press. Lewis was therefore unable to secure interviews with Trader Joe's management, and the book is rife with statements like, "Jane Smith, Trader Joe's CFO, was once quoted as saying..." Lewis was able to interview a lot of people who work with Trader Joe's (real estate professionals, other grocery analysts, and so on), but statements from the business itself are conspicuously absent.

That said, at 200 pages, it's a good, quick read. Recommended.

Posted by Gavin Shearer at January 27, 2006 9:20 AM. Posted to Entertainment.

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