A self-proclaimed “surfer dude,” Dan Bane is right at home among the Hawaiian shirt-clad crew members who give Trader Joe’s its laid-back vibe.
“I often tell people that I have the best job in the country,” says Bane on a video posted to YouTube.
Shoppers are just as fanatic about the Monrovia, Calif.-based chain’s carefully curated assortment, engaging staff and delightful atmosphere that’s been replicated in such a way that gives each of the more than 350 locations a neighborhood feel.
Consumers are also pleasantly surprised by their grocery bill. “It’s not the same as other places where you feel like you’ve been raked over the coals from a financial standpoint,” noted Jim Hertel, managing partner at Willard Bishop, Barrington, Ill.
Privately held Trader Joe’s sustains an EDLP strategy by limiting its selection to fewer than 4,000 fast-moving products, some of which are in limited supply. It does not advertise or accept coupons.
Ten to 15 new products replace slow movers or seasonal items each week, and the bulk of inventory is sold under the Trader Joe’s, Trader Jose’s and Trader Ming’s brand, depending on cuisine type.
“They have this adventurous whimsy and don’t take themselves too seriously. That translates pretty positively to create a halo over top of the whole shopping experience,” Hertel said.
Staff wear Hawaiian shirts “because we’re traders on the culinary seas, searching the world over for cool items to bring home to our customers,” according to Traderjoes.com, but observers paint a less exotic picture.
“CPGs make a significant amount of [Trader Joe’s] product,” according to Hertel.
The chain pays less for real estate than many of its competitors given the small footprint of individual stores.
In recent months, expansion has come at a rapid pace. More than 30 new locations were planned for 2012 and an additional 30 each year beyond, with openings in Austin, Dallas, and Evanston, Ill., planned for the near term.
Growth is likely spurred by a convergence of Trader Joe’s business plan with opportunity, as retail space has been vacated by retailers that have succumbed to economic pressures in recent years, noted Hertel.
“They know the neighborhood types and profiles of the places that are going to be good locations for them,” he said. “You put that together with the uncommon real estate values and it’s a perfect storm.”
One hurdle will be hiring suitable brand enthusiasts without diluting the Trader Joe’s brand.
“The big challenge will be the service, the in-store personnel and making sure the proper level of zealotry is maintained,” said Hertel.
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