Trader Joe's

“This is the unlock for thinking about Trader Joe's. They are wine merchants, and they merchandise everything in the same way you would merchandise wine.”

“Listeners, just so you know, there have been a billion bottles sold of Charles Shaw.”

“I mean, I saw one stat that they turn over their inventory 60 times per year, which is more than once a week they sell through everything in the store.”

“10% of Trader Joe's forty million bottles of wine that they sell every year is Charles Shaw.”

“Part of the reason why all the employees in Trader Joe's work Every part of the store and everybody does the cash register and everybody does bagging is to maximize interaction with customers.”

“In the fullness of time, I bet Trader Joe's will be worth at least TEDx that.”

“The average tenure of a crew member is, like, 10 to 12 years.”

“Trader Joe's today average about, call it 15 thousand-ish, maybe a little less square feet per store. The average supermarket is like 50,000 square feet, and the average Walmart is like a 150,000 square feet.”

“There's no dedicated cashiers. There's no dedicated baggers. There's no dedicated stockers. Everybody does everything.”

“This is how the fearless flyer starts. They call it the Trader Joe's Wine Insiders Report. And it's this whole newsletter. Imagine you're a wine merchant. This eventually, once they get more into grocery in 1985, this becomes the fearless flyer.”

“They aren't focused on the margin percentage of each item. We didn't talk about this yet, but they actually don't apply a consistent markup. They focus on the absolute dollars of margin in each item.”

“If you go to the Pirate Joe's website that used to exist, it now just redirects to the Wikipedia article all about Pirate Joe's and the international legal incident that it caused.”

“They don't stock all the things you need to buy each week. You can't buy online. You can't get it delivered in any way, even as the whole world turns to grocery e-commerce.”

“Well, I wish that you and I had investments in this company, but unfortunately, only one person in the world does, and he's deceased, as we will see at the end of the episode.”

“Trader Joe's employee turnover I think is five or six percent annually, so.”

“And so the core insight is that Pronto Markets is effectively just an empty vessel to sell the same products. In a situation like that, it is a race to the bottom on your margins, and scale will determine the winner.”

“This is all happening, call it five to eight years before John Mackey starts Whole Foods in Austin, Texas.”

“You just have cash as soon as you drop something off at their loading dock. This gives them a huge edge of being a preferred customer for these vendors. That those companies never have any cash flow issue or a waiting issue. As soon as they drop it off, Trader…”

“As of 1976, so three years before the sale, Trader Joe's carried no fixed interest-bearing debt, never recorded a loss, and became more profitable every year.”

“Trader Joe's probably trades at north of one X, but probably not all the way at Costco 1.6 X. I don't know, maybe around there. So on that 23, twenty four billion in revenue that we estimated, call it a 32 to thirty four billion dollar company, maybe a thirty …”

“The average Trader Joe's customer came in once per month, and Dan says in a podcast interview about when he started, at the time, we weren't really a grocery store. We were that store that sold wine, cheese, and nuts. We were sort of a party store.”

“You can build a much better business on being known for, I will be surprised and delighted when I come to the store, and you have selected interesting items for me, than you can on, you are an empty vessel through which to provide me milk.”

“I mean, there's an alternative world where Trader Joe's basically becomes Total Wine or BevMo or something like that.”

“For context, Trader Joe's today in twenty-twenty-five has 600 stores.”

“Today we dive into how this travel themed pseudo healthy national neighborhood grocery chain came to exist from the unlikeliest of places as a clone trying to rip off Seven 11 in the 19 sixties.”

“So the sales per square foot is estimated to be over 2000 dollars today. That is the single highest sales per foot of any grocery store And twice its nearest competitor in Whole Foods.”

“They've grown just as fast in the internet era as the non-internet era.”

“Yeah, so he says on this podcast that when he retired in 2023, they were doing north of twenty billion a year in revenue. And they had just hit one billion when he joined the company in the late nineties. The estimates that had been going around the internet a…”

“Wine By nature is branded. It's not big brands, but it's the brand of the winery and the label, and that carries a huge amount of value. Health foods, nuts, dried fruit, bran, granola, this stuff is unbranded at the time. And thus emerges the opportunity for T…”

“Basically every employee at Trader Joe's get paid between 40 and a 150% over what average compensation is for their roles in retail.”

“To be super clear, Aldi does not own Trader Joe's. One, the Aldi that exists in the United States is Aldi Sood, the other half of the Aldi empire that split in the, like, late sixties, early seventies. The relationship that owns Trader Joe's is the founder of …”

“They have 70,000 employees, and a hundred percent of their captains, this is the store manager, were promoted from the first mate role, or the mate role, which is effectively the number two, and 80% of those came from crew members.”

“The funny thing is, today, most of what you're buying from them Is processed, packaged food. It's just story told very well, and like, you know, you go to grab stuff in the freezer, it's a lot of salt, there's a lot of deep fried stuff. You can't make giant fr…”

“And Joe Colom says the Jungle Cruise was one of his two inspirations for embracing this traitor idea, this tiki traitor thing. The other of which is a book that he was reading called White Shadows in the South Seas.”

“There's never any sales or discounts, and they don't offer any coupons.”

“Trader Joe's has this philosophy of we only make money one way, and that's when someone checks out an item and pays money to us. We don't make money from our suppliers, whereas those other grocery stores, they actually make a lot of money from the suppliers. T…”

“On growth, since selling to the Albrecht family, they've grown stores at about 10% each year, and over the last 20 years or so, they've grown revenue at a little over 11% per year.”

“So by 1970, the year they launched the Insider's Report, and three years after this first Trader Joe's launches on Arroyo Boulevard, Trader Joe's becomes the largest wine retailer in California.”

“They didn't even have price scanners until Dan Bain became CEO in 2001.”

“Over 80% of the stuff is Trader Joe's.”

“Trader Joe's and Costco both only stock about 4000 items at a time.”

“And in order to justify all the radio ad spend, they needed a density of stores in a certain area. And so when they were going to launch a new city, they would have to make sure they had sufficient number of stores to amortize buying radio ads for all the diff…”

“The other retailers want to use the house brand brand name to signal to customers this is the same product at a cheaper price. Trader Joe's Wants to signal to customers with all of their products, this is an N of one product.”

“Eater, the website, submitted a FOIA request to the US government to the USDA and the FDA. To figure out, via food recalls, who makes Trader Joe's items. And by the Freedom of Information Act, they have to provide that information. And so there's a whole bunch…”