15
Trader Joe’s – An Experiential
Discount Retailer Conquers the
Culinary Seas
Claus Ebster
1
& Riem Khalil
2
”I think we should be traders on the culinary seas.”
Joe Coulombe, Founder of Trader Joe’s
1. A new kid in town
Orlando, FL, April 10, 2015, 5:00 a.m. The warm Florida sun had not risen and yet,
there were already long lines of people in front of a new, nondescript strip mall on Orlando’s
Sand Lake Road. Inside the building, staff members were hurriedly preparing for its
8:00 a.m. grand opening. Observers, looking at the people waiting in line, were reminded
of groupies eagerly awaiting a pop star or Apple aficionados waiting for the opening of a
shiny new Apple store. Their object of desire was, however, far humbler: A discount grocery
store. Trader Joe’s had arrived in town.
Not only were shoppers eagerly awaiting the opening of this new store; retail analysts
shared their enthusiasm. In the OC&C Retail Proposition Index, based on factors such as
service, trust, store look and feel, quality of products and value for money, Trader Joe’s
ranked second among all U.S. retailers, after online merchant Amazon.com. In a survey by
Market Force, American consumers declared Trader Joe’s their overall favorite supermarket.
Moreover, Trader Joe’s is highly successful economically. Since the company is privately
held and has a reputation for secrecy, retail statistics are hard to come by. However, in 2014,
sales per square foot (approx. 0.09 square meters), a key retail metric, was estimated to be
around $1,734. This is more than double the $930 reported by Whole Foods Market, one
of its fiercest competitors now owned by Amazon.
Who is Trader Joe’s and which factors account for the company’s success?
2. The original Trader Joe and his German brothers in spirit
There is, in fact, an actual Trader Joe. Joe Coulombe is a Stanford graduate and
entrepreneur who grew up in Southern California. After graduating from college, he started
working for a drugstore chain and soon after, in 1958, launched a small chain of convenience
stores he named Pronto Markets. It was a favorable time for retailing because in the late
1
Claus Ebster ist Universitätsdozent am Lehrstuhl für Marketing der Universität Wien und Geschäftsführer
von Market Mentor Shopper Marketing Consulting.
2
Riem Khalil ist Account Executive bei Market Mentor und Lektorin an der Donau-Universität Krems.
1 CEO of Market Mentor Shopper Marketing Consulting and Associate Professor
at University of Vienna
2 Account Executive at Market Mentor and University Lecturer at Danube University Krems