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Trader Who? 25 April 2006


Trader Joe. Trader Giotto. Trader Juan. Trader Ming. Trader Jacques. Trader Darwin. Trader Jose. Arabian Joe. Trader Josef. Trader Zen. Trader Joe San.

A nationwide grocery retailer, Trader Joe’s is hard to categorize. It is a gourmet store in iffy neighborhoods. The offerings are inexpensive, yet the clientele is usually well-off. It calls itself a grocery store, but staples like rice, grain, and sugar are difficult to find. And if the products are so popular, why don’t major grocery chains offer them too?

Trader Joe’s “category leaders” (chefs, nutritionists, and food scientists) roam the earth. They look for good food everywhere: farmer’s markets, artisanal pasta makers, restaurants, supermarkets, etc, and then work in tandem with the local producer to bring the product to the United States. Ever had Trader Joe’s Tiramisu? It was discovered in a small restaurant on the Amalfi Coast of Italy. Trader Joe’s Thai Lime & Chili Peanuts? Discovered in a Thai airport.

The products then undergo rigorous testing by the company’s tasting panel – a picky bunch known to have held up products for months, even years. And just in case consumers disagree with the panel’s choices, Trader Joe’s constantly cycles out of existence the bottom 10%-selling products.

Itinerant chefs, nit-picky tasting panel, international foods – sound expensive? Actually, it’s quite cheap. By keeping secret the identity of their source products, Trader Joe’s can get a low price from their supplier by being the only customer. Furthermore, international foods gives Trader Joe’s a niche where it’s simply not economical for the major grocery chains to invest, and Trader Joe’s refuses to compete where the grocery chains rule the roost – in grains, toilet paper, etc. Finally, Trader Joe’s opens in failed retail locations, avoiding both high-priced neighborhoods and choice commercial real estate.

With 250 stores nationwide, Trader Joe’s has chosen to spread its wings fast, instead of saturating one metropolis before moving to the next. Brand identity – the playful Polynesian theme, the rapid national expansion, the myriad catchy in-house brands – is Trader Joe’s strategic endgame, its only sustainable edge over would-be competitors. Whether the strategy pays off in the end, only time will tell. But we can go along for a hell of a ride: according to Stephen Dowdell of the Progressive Grocer magazine,

Trader Joe’s is radically different in many ways from other food retailers. The stores are small, they don’t rely on national brands, you can’t do price comparisons and they definitely don’t offer one-stop shopping. But every product has a story.



1. Koonj - 26 April 2006

i love their canned stews and their frozen chicken fried rice. anythign that’s healthy YET I dont have to work on it, has got to be good.

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