Posted: November 14, 2013
Chef Laura: Trading up
Trader Joe’s aims its arrow at Colorado on Valentine’s DayBy Laura Cook Newman
Attention, shoppers! Hold onto your carts, because grabbing groceries is going gangbusters.
California-based Trader Joe’s just announced it will open three stores in Colorado on February 14, 2014. So this Valentine’s Day, skip the token stop at Lehrer’s, and head to TJ’s for a bottle of Two Buck Chuck, a jar of Speculoos, and your imagination.
Lately, the retail gods have been smiling on Colorado. In October we got our first Massachusetts-based Dunkin’ Donuts. Not to be outdone, the delightfully weird Oregon-based Voodoo Donuts opens this month. And now…Joe’s! At long last, these coastal businesses can no longer dismiss the inland pull of Coloradan consumers’ buying power.
If you’re asking “why all the fuss?” it can best be answered two ways:
1. The Eyes of the Consumer
Unless your DVR is programmed to record every episode of TLC’s Extreme Couponing, most people aren’t too jazzed about a trip to their local supermarket. They rank the joyless obligation somewhere between standing in line at the DMV and listening to their right winged in-law’s opinion on Obamacare.
Trader Joe’s brings a thrill to the shopping experience without breaking the bank. (Yeah, I’m talking to you Whole Foods, aka “Whole Paycheck”). In addition to the Hawaiian shirt clad clerks signaling secret Morse code to their peers via bells, you’ll find:
- Tasty vegan products that would otherwise collect dust at a Wal-Mart Supercenter
- Memorable private labels that outshine Safeway Select or O Organics
- Global items never to be seen on a shelf at Super Target
- Prices that go head-to-head with Kroger. No Soopers card required.
Unlike the amusement-park that is Ohio’s Jungle Jim’s International Market, Trader Joe’s layout is manageable. This allows for a leisurely browse or just a quick trip to “pick up a dozen cage free eggs”. Despite the colorful shirts and grand opening “lei-cutting”, the South Seas theme doesn’t interfere with your ability to find wholesome products at a good value.
2. Business Brass Tacks
Trader Joe’s has been making other retailers scratch their heads since opening in 1967. TJ’s does things differently to deliver a unique shopping experience to their loyal patrons.
Trader Joe’s is privately held with 400 locations in the US – but that’s hardly what upholds the bottom line. It’s the way they buy in bulk, cut out the middle man and don’t believe in coupons. One of their mantras is “SALE is a four-letter word.”
They also don’t let manufacturers dictate what to sell. In the grocery industry, there is a hierarchy called Category Kings. Think of it like a name association cheer: “When I say ‘cream cheese’, you say ‘Philadelphia’. When I say ‘cereal’, you say ‘Kellogg’s. When I say ‘b-o-l-o-g-n-a’ you say ‘Oscar Mayer’”.
Brand royalty pays big bucks in extortion - I mean “marketing’ - to secure prime real estate on the shelf. Does Folgers just miraculously appear at eye level in the hot beverage aisle, blocked out in perfect formation by size, format, and flavor? Wake up and smell the…oh, never mind!
That perfectly “faced” plan-o-gram was developed using state of the art technology; then negotiated for weeks in a war room where money is tossed around like a bachelor party at the new Shotgun Willie’s.
Trader Joe’s is to David, as Ahold is to Goliath. TJ’s strategically works lean. Their stores are, on average, 10,000 square feet housing only 4,000 items. Compare that to most grocers at 46,000 square feet of space selling 42,000 SKU’s. Despite their petite stature, Trader Joe’s sells $1750 of merchandise per square foot – double Whole Foods’ and almost quadruple Sprouts’ efforts.
Malcolm Gladwell and the bible were right about this allegedly unbalanced battle: bigger is not always better.
Trader Joe’s - poised for greatness in the Centennial State
The inaugural launch of three locations will quickly be followed by two more. But because of Colorado’s wacky liquor laws, much stricter than California’s, Two Buck Chuck will be more like Three Buck Chuck and only available at one (gasp!) location.
You’ve got three months to get psyched. Come Feb. 14 if you forget to book a romantic table for two at Barolo Grill, head over to the East. 8th Avenue and Colorado Blvd. store. Celebrate the grand opening with a sip of Charles Shaw’s finest and, if you’re lucky, a lei.
Laura Cook Newman is a professional Chef and Training Manager for a Fortune 500 food manufacturer. She earned her chops at Johnson & Wales University, has an MBA in Marketing and hosts a blog for behind-the-scenes insights on the food service industry. Contact her at www.ThreeHotsAndaCot.net