12 Trader Joe's strategies to success. Trader Joe's is one of the most popular chain grocery stores in US.

1. Presented by: Athar Naemi
Trader Joe’s
Strategy

2. • American chain of grocery stores
• has 560 stores across the United
States.
• known for its unique food products,
including seasonal offerings, as well
as for its low prices.
• Number of employees: 50,000+
• headquartered in Monrovia,
California.
Resource: CNN, Wikipedia

4. Ranking Top Food Retailers in
North America 2021
Resource: Progressivegrocer

5. Trader Joe’s Strategy:
12 Keys to its Success
Resource: https://www.indigo9digital.com/blog/traderjoesstrategy

6. 1. Low prices
As Trader Joe’s writes on its website: “we know that maintaining our everyday focus on value is vital,
which is why we don’t have sales, we don’t offer coupons, and there are no loyalty programs or
membership cards to swipe at our stores. Trader Joe’s believes every customer should have access
to the best prices on the best products every day.
To consistently deliver value:
• We buy direct from suppliers whenever possible, we bargain hard to get the best price, and then pass
the savings on to you.
• We buy in volume and contract early to get the best prices.
• If an item doesn’t pull its weight in our stores, it goes away, making room for another innovative new
product.
• Most grocers charge their suppliers fees for putting an item on the shelf. This results in higher prices... so
we don’t do it.
• We keep our costs low because every penny we save is a penny you save.”

7. 2. A fun and friendly atmosphere
3. Details that matter
Trader Joe’s feels like your
neighborhood grocery store.
It’s stores are small, fun and
cheerful. While its stores do not
have the most expensive design
elements they are inviting,
encouraging customers to come
inside and stay a while.
What makes a retailer memorable?
It’s all of the small things it does
along the way that together form a
great customer experience. Trader
Joe’s has put considerable thought
into details like store signage.

8. 4. Excellent customer service.
Mark Gardiner took a job as an entry level
employee at Trader Joe’s for a year to gain
insight into why the retailer is so successful.
“even as a new crew member (the lowest-
level employee) I was empowered to do
almost anything for a customer. Spend 15
minutes in the storeroom looking for a $5
item at a customer’s request? No problem.
If I encountered a customer who seemed to
be having a bad day, I could give her a
bouquet of flowers on my own initiative.
Any time a customer asked, “What are
these like?” I could open a package and
give them a free sample.”

9. 5. Best in class private branded products.
In 1972 Trader Joe’s introduced its first private label product, a brand of granola.
As Trader Joe’s has written on its website: “focusing on private label (products with
“Trader Joe’s” name on them) simplified a lot of things, and removed a lot of
costs – no more slotting fees, marketing fees, middlemen fees… We passed
along those savings to our customers (still do), because the value of Value is
invaluable. And to us, “Value” means offering the best quality products for the
best, everyday prices.”
Many of Trader Joe’s private branded products are customer favourites meaning that
customers have to go to Trader Joe’s to get them, generating additional foot
traffic and sales for the retailer.

10. 6. Only the best products.
Unlike retailers that have tens of thousands of SKUs Trader Joe’s
only has about 4,000 skus.
This gives shoppers more confidence that when they find a new
product it will be a good one since Trader Joe’s can only stock so
many items.

11. 7. Products with limited availability.
Trader Joe’s also has many limited trial run products which draw customers in
who do not want to miss out. This is a tactic that many retailers use to keep
customers curious about what is coming out next, enticing customers to visit their
stores on a frequent basis.

12. 8. Managed growth
“We won't open a store just because we can, we want to open a store that's run by
the right kind of people doing the right kinds of things, and that's really important
to us” says Dane Bane, Trader Joe’s CEO.
it has chosen not to fall into the trap of growing so fast that it cannibalizes its own
success, an issue that retailers like Starbucks have faced in the past.

13. 9. Word of mouth marketing.
Customers can sample anything they want to in the store as long as it does not
have to be cooked. The investment Trader Joe’s puts in making high quality on trend
products pays off when customers discover new items and tell others about it.
There are several Instagram accounts dedicated to Trader Joe’s fans that are run by
people that aren’t even employed by the brand who discover and share products with
millions of followers at no cost to Trader Joe’s.
Resource: Learn G2

14. 10. A tried and tested brick and mortar shopping experience
Trader Joe’s does not offer online shopping and does not plan on offering it even
after the COVID-19 pandemic pushed more and more consumers to shop online.
"While other retailers were cutting staff and adding things like self-checkout,
curbside pickup, and outsourcing delivery options [during the pandemic], we
were hiring more crew and we continue to do that.”
Another benefit of not having an online presence is that an eCommerce business is
expensive to run and not offering online shopping forces customers to shop at
stores which is a more profitable selling channel.

15. 11. Trader Joe’s pays its employees well
Part time crew members (an entry level store position) can make up to $24 per hour which is
nearly twice the highest average minimum wage in the United States.
Captains (store managers) make around $100,000 per year.
Joe Coulombe, Trader Joe’s now deceased Founder once said that: “the fundamental
difference between Trader Joe's and all other retailers is the income level of
employees.” Speaking about his dad, Joseph Coulombe said: “he loved and believed in his
employees and he wanted to keep them. And the only way to do that was to pay them
well.”
Resource: CNBC

16. 12. Trader Joe’s makes it a priority to hire nice people
Trader Joe’s president and COO Bryan Palbaum said that Trader Joe’s explicitly tries
to find people that have “outwardly nice” personalities since it is hard to “train
someone to be nice”.
One of Trader Joe’s former CEOs, John Shields, said that he wouldn’t hire someone
if they didn’t smile within the first 30 seconds of an interview.
John Shields Bryan Palbaum An Employee

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