Trader Joe's Case Study

Submitted By Mjlynn
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Progress In Grocery Retail

Trader Joe’s

Michael Lynn
0234-6599

April 12, 2013

Abstract
The purpose of this research paper is to reveal the unique philosophy and operations of Trader Joe’s. This paper also will highlight some of the problems and opportunities that Trader Joe’s is presented with. The information in this paper ranges from the history of Trader Joe’s to where it is today. It will also include what separates Trader Joe’s from other major grocery retailers. The history of Trader Joe’s is a story of rapid growth and expansion. It started as a small convenient store chain and grew into one of the most profitable grocery store chains in America. This growth was due to unique philosophy and strong management. Some of the unique business operations include the Trader Joe’s buying system. Buyers that are employed by Trader Joe’s are sent around the world to acquire unique and tasty products to sell at their stores. Another unique operation is their private label. Good portions of Trader Joe’s products wear the Trader Joe’s label. The Trader Joe’s label has served as a major asset for the company as it indicates that the product is free of GMOs and other artificial ingredients. In addition to attracting customers, the private label also helps reduce costs and increase profit margins. Because of the rapid growth and expansion that the company experiences, Trader Joe’s is presented with increased competition and a challenge to place its valuable employees in the right positions to optimize the company’s growth.

Introduction
Trader Joe’s is an organization that thrives to set an example in the community of what a grocery store experience should be. This report will illustrate how Trader Joe’s is progressive in the grocery retail industry and how it has expanded its operations to more than thirty states. This report will also bring to the forefront what separates Trader Joe’s from other grocery stores and some of the problems that arise from its unique operations and philosophies.
Background
Trader Joe’s started with a vision from one man, Joe Coulombe. Before Trader Joe’s was founded, it was a small convenience store called Pronto Market that was very similar to 7-Eleven. Pronto Market was founded in the late 1950’s and served as a stepping-stone to the founding of Trader Joe’s. The main focus of the early Pronto Market was the sale of wine and cheese. Joe Coulombe thought the similarity of his store and 7-Eleven was going to create a barrier for the expansion he desired for his company, so he put on his thinking cap in order to find his niche in the grocery retail market.
Joe Coulombe came up with the concept for Trader Joe’s while on vacation in the Caribbean. Coulombe noticed how people were traveling more, and developing a taste for foods from around the world that couldn’t be satisfied in most grocery stores in the United States. Also, he realized that buyers were becoming more educated and were demanding more from the products they purchased. Coulombe decided to incorporate unique food items from around the world while putting an emphasis on health and transparency throughout the organization; he had found his niche.
The first Trader Joe’s was opened in 1967 in Pasadena, California. Coloumbe and his store were still evolving and adapting to the ever-changing market during a tough economic time in the United States. Trader Joe’s started to solidify its market by offering unique products that were grown and produced sustainably.
Trader Joe’s was bought by a couple of extremely wealthy German brothers, the Albrecht family, in 1979, but Joe Coulombe remained the CEO of the company. At this point, the main focus of the company was to supply consumers with value. Coulombe was targeting consumers who were well educated with shallow pockets by supplying high-quality products with clean ingredients at a relatively low price. One of the main reasons that Coulombe was able to
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