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Inside trader joe’s Fortune magazine

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

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Inside trader joe’s Fortune magazine

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  1. Inside trader joe’sFortune magazine Caitlan Fetzer, Julia Hale, Ashley Warney

  2. Health Food Store?

  3. 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

  4. 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

  5. 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) • 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”

  6. 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.

  7. 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

  8. Sources • Kowitt, Beth. "Inside Trader Joe's." Fortune Magazine 6 Sept. 2010: 86-96 • www.traderjoes.com • http://money.cnn.com/2010/08/20/news/companies/inside_trader_joes_full_version.fortune/index.htm

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