For a grocery store with a relatively small footprint, limited selections, and measured national growth, Trader Joe's is, perhaps surprisingly, a massive success. Customers act more like devoted fans, and new store openings attract the types of crowds more often associated with the launch of a new iPhone. What's the secret behind Trader Joe's Tasty Bite Indian dinners, Two-Buck Chuck, and folksy, neighborhood feel? Fortune spent two months trying to find out…
"You'd think Trader Joe's would be eager to trumpet its success, but management is obsessively secretive," writes Fortune's Beth Kowitt. The company declined to speak, so the reporter relied on interviews with "former executives, competitors, industry analysts, and suppliers, most of whom asked not to be named" to discover the secrets of Trader Joe's success, it's German ownership, and its suppliers.
One of the more interesting aspects of the article was an examination of the store's limited selections:
Swapping selection for value turns out not to be much of a tradeoff. Customers may think they want variety, but in reality too many options can lead to shopping paralysis .... Studies have found that buyers enjoy purchases more if they know the pool of options isn't quite so large. Trader Joe's organic creamy unsalted peanut butter will be more satisfying if there are only nine other peanut butters a shopper might have purchased instead of 39. Having a wide selection may help get customers in the store, but it won't increase the chances they'll buy.
And who is making that peanut butter (and chips and hummus and cheese...)? Trader Joe's does not publicize its supplier relationships – and forbids vendors from doing the same – but Fortune was able discover a few interesting details.
Read the article:
• Inside the secret world of Trader Joe's (Fortune)
Related: Trader Joe's Pantry Staples: What Are Your Favorites?
(Image: Flickr member Eric Fischer licensed under Creative Commons)
Martha Concrete Lam...

It's true. I used to talk about TJs all the time to my family in NC. Now that they have one, (my mother and her friends have to drive an hour south to get there) and it's just an event! It's funny really how quickly they have come over to the dark side.
Interesting article. I just love it there.
I'm a fan. My main beef with them is excessive packaging, but the convenience factor can't be beat. Oh, and I wish there were a warning when they're going to cycle something out. I've fallen in love with products that run out/get withdrawn and then am bummed that I didn't get a hint to stock up.
The article is right about how limiting choice increases confident shopping - but it's also about building trust. I'll wander around Whole Foods for an hour and buy four things that actually seem like value for money, or I'll go to Trader Joe's and have an overflowing cart in ten minutes.
As far as distributors go, I've seen them unload their frozen burritos (or tamales, can't remember which) from a deli-mex box.
Personally I think trader joe's should be used as a supplement to other stores. Their produce is downright scary, asparagus cling-wrapped in foam containers like pork chops? Their bread also always seems to be stale.
I also kinda like how Trader Joe's actually responded (in the positive direction) to the Traitor Joe's protests. Good for them.
I go to TJ's for luxury items, like their gingersnap cookies and bruschetta and mozzarella. Delicious for snacks, but I continue to go to more mainstream supermarkets for my staples.
The little icons for special diets on the packaging are wonderful. I still check the ingredients but they make the initial scan much quicker.
I think TJ's, along with the rise in cooking television, has turned people on to ingredients and flavors (and wine!) that many people didn't have exposure to or thought too haughty for their tastes. Life's too short--there's a decent quaff of Vinho Verde or Torrontes and boxes full of heat and serve spanikopita and shu mai for everyone. If you're feeling extra indulgent, grab a bottle of truffle oil to drizzle in the mashers. Depending on where you're at, some of the TJ's products could be made by excellent local operations. Some of the beer in Chicago used to be made by Goose Island if I'm not mistaken. Most of their bread is made by Labriola. TJ's is a big chain, no doubt. But they take the place of that little store or deli that could be on every block in the city. I'd still like to see that little store or deli but until then...
! <3 TJ's!
TJ's is one of my all-times favorite stores. Many reasons. The prices are good, especially for things are a little more gourmet and therefore more expensive in other stores -- like nuts, quinoa, rice, etc. Also, I agree with an above reviewer that their listing of ingredients is very clear -- I'm a vegetarian and don't eat rennet, and they make it very obvious which cheeses are made with vegetable vs. animal rennets (even have a list on the website). Lastly, the staff has ALWAYS been extremely nice. It makes shopping there, which is often stressful due to the crowds (at least in NY), a pleasant experience. Everyone is willing to go out of their way to help you -- staff members will even bring you items while you wait on line to pay if you forget something. Checkout cashiers always strike up conversation.
But, yes, agreed, I never get produce there (except maybe onions). And I almost always have to go to another grocery store for things that TJs doesn't have.
i LOVE trader joe's and since moving back to canada, i miss it terribly. in fact we sometimes plan special trips south of the border just to get our TJ fix. my husband is addicted to their dried chili mango and has friends bring him dozens of bags whenever they visit.
i agree about their produce being over-packaged, but their pantry staples and gourmet goodies are amazing.
I agree with an earlier comment - why is their produce all wrapped up in styrafoam and plastic??? that stuff is not fresh. and i am the only 25 year i know who doesnt eat frozen food so that stuff doesnt appeal to me either.
I go WF or local produce stands. I am not trader joe's girl.
WF is too far away for me. I like TJ's just fine for my fruits, veggies, nuts and gluten-free items. I just wish they had a pasta similar to Tinkyada pasta.
I heard a teaser about this story on NPR this morning and they played this cute song that someone posted on YouTube:
http://www.youtube.com/watch?v=OdB7GDZY3Pk
Oh how I miss Trader Joe's.. (army wife moved from California to Kentucky)!
The selection at TJs is far too small to be my normal grocery store, but they do have a handful of really great items that keep me coming back for the occasional stock-up trip.
Especially their whole wheat pizza dough for 99c. I buy five at once and freeze them to use later!
I do agree that they probably are an *awesome* store if you're the type that doesn't like cooking but does appreciate nice frozen meals all ready to go. Or if you're putting on a party and want great stuff to serve but don't want to cook or cater.
Atrocious produce section, though. I'm not really sure why they bother.
i really hate TJs. their produce section is TERRIBLE: limited in selection, and not fresh at all. i also find their dairy section disappointing, and they don't carry much beer.
then again, maybe i am just spoiled by berkeley bowl & andronico's.
We no longer shop at a regular grocery store for anything. Just the farmer's market, WF, and TJs with a weekly visit to a butcher.
Sadly, I don't really trust TJs. Their secrecy drives me crazy but I never know if I should trust their private label organics. The store sales seems to cater to the lowest-possible-price (horrible story about their use of the recalled egg provider on npr the other day) and the cheapie-organic crowd. I fall into the later category surely but I wouldn't buy their milk if I new for sure it was from Horizon for instance they won't.ever.tell.you.
apf - my Trader Joes doesn't carry beer/wine at all...some beer is better than no beer!
i hit TJs every couple of months to stock up on some staples & frozen goods. not everything there is of great quality (agree with above re: produce), but definitely worth an occasional trip. hell, i've seen plenty of stuff in whole foods with high fructose corn syrup!
I'm pretty sure whole foods has a ban on foods that contain HFCS...that may have been lifted, though, I'm not sure.
Anyhow, I LOVE TJs. Whenever people talk about the food there being stale or nasty, I never understand what they are talking about. Perhaps the TJ's in larger cities just have a higher turnover so nothing has a chance to get stale in Chicago? I think its a great place for people who cook at home - I go to TJs for brown basmati rice, baking staples, alcohol free vanilla, almond milk, tofu, canned beans and tomatoes for chili, yukon gold potatoes, pink himalayan sea salt (in a grinder!), nuts, dried fruit, coffee, english breakfast tea for making iced sweet tea with, frozen fruit (insanely good quality, so flavorful) for smoothies and protein shakes, pasta, garlic, TONS of cheap cheap organic bananas - i eat one a day, whole grain bread, earth balance, frozen cubes of basil in seasons where I can't get it fresh or to just keep on hand to throw in soups/sauces when I'm out of the fresh stuff at home, sparkling water, trader joe's o's high fiber cereal, vegan sausages, soy yogurt, balsamic vinegar, peanut butter, jam...I get most of my produce at the farmer's market or through my CSA, with an occasional trip to Whole Foods for treats. It works out fabulously. Even their hand soaps and body washes and lotions are awesome.
Whole Foods does sell a few products with HFCS. They don't have a ban on it. Lee and Perins Worchestshire sauce for instance. But the vast majority of products do not. Nothing in the 365 label does.
Trader Joes has some products without it and some with. They often use straight corn syrup in their private label rather than the HFCS version.
"Their produce is downright scary, asparagus cling-wrapped in foam containers like pork chops?"
I agree.
They sell very few scalable items. By prepackaging produce there is less time spent at registers, unfortunately the produce quality suffers a little. However sometimes I do get good produce at tj's. It's hit or miss.
I love Tjs- and buy most of my produce there. Maybe it's just here in San Diego, but all the stores have single organic fruits (so no packaging) and most of the other fruit is sold in compostable packaging. Is that not how it is everywhere else?
1. TJ is really great for single folks or couples without kids.
2. I generally really like their prepared foods -- whether frozen or refrigerated. They usually have a small number of ingredients and all usually recognizable ingredients.
3. You really can't beat them on most pricing -- peanut butter, nuts. I get the Alvarado Street Bakery sprouted grain bread there, because it's usually $1 cheaper than at other stores.
4. I do love how TJ's will eventually create their own versions of products they used to sell there -- Tasty Bite, Calistoga sparkling water.
Just read the Fortune article. I take that back about TJ's creating their own versions. 1/2 true -- they work with the vendors to create a TJ version. Now it makes sense why they use the exact same bottle as Calistoga.
I like many of TJ's products, but a mystery is how they can have a huge aisle of chips but not one organic potato chip! I have tried asking and even emailed but no response, other than the clerk saying they'd "write it down".
Also i agree that there should be a warning when some product is being discontinued.
I am a non fan, for the most part. I can't stand how people lollygag in front of a certain section and block a whole freaking aisle! It drives me insane and it's a horribly frustrating shopping experience.
I always hear of friends who rave about it, but I can't even get my foot in the door without wanting to punch someone for "reverse following" me.
I'm always disappointed with most of the selection there.
The pro's are: nice workers, shelled pistachio nuts, and their chocolate. That's the only thing I get there. Their organic dark chocolate is the best!
I sure wish they would open on in Colorado it's unreal that we don't have one! I miss my TJ's in Chicago and was even more upset to find a brand new gorgeous one opened up steps from my old house there :( Come on TJ's open up!
Trader Joe's is great! I agree with the article about offering too much of selection, it really does get overwhelming! Especially when you have little ones shopping with you. I like knowing that I can see a couple different varieties and pick a healthy one without any artificial this or that.
Anymore now food distributors are putting so much junk in our food we really need to be careful what we are actually eating and feeding our families. I feel like Trader Joe's stuff, although some stuff is processed, you can find more stuff there less processed. I live in California and am amazing at my grocery store Ralph's. More like appalled. I've brought home cottage cheese that was spoiled and they have a super small section of organic fruits and veggies.
My family and I are definite fans of Trader Joe's!
i usually cook from scratch, but the V on the front of their vegan prepared stuff makes my life a LOT easier when I am in rush. Instead of a full ingredient list read-thru, i can just grab and go.
Trader Joe's saved my bacon when I was in a bike crash and in a full arm cast while my partner was away on a research trip. I loaded up on the frozen entrees, and just used my one (semi good) arm to hat them up. And still ate well until the Guy came home to cook for me.
Like the majority here I steer clear of the produce section. Thats what the farmers market is for... right!
Traders is good for specialty items though. I love there chicken sausages that I eat as hot dogs. All their non dairy icecreams are delicious... I think I'm gonna half to go pick up some mango icecream now : )
I know that produce varies at different TJs. Ours used to be awful, then it got revamped and is now great. I very rarely go to a regular grocery store now, and my family of four including two preschool age kids can find all we need there. Some things are so much cheaper: cereal, milk, frozen fruit, bread, hummus, avocados, cheese, any kind of greens, meats. I love their red pepper soup, tamales, chocolate yogurt, snap pea crisps, brown rice, tomato sauce, brownie mix, tea, nuts, sausage, and all their fresh fruit as well....I could go on. True there is no baby food but I just bought that at Target since I was getting diapers there anyway! Second the pp about lotions/soaps, unbeatable value, and I also know people who swear by their sunscreen. It may be made by someone else--but you get the feeling they have already researched the best value for the money so you don't have to. And the people who work there seem so happy. It makes it a pleasant experience to shop, rather than a chore.
I agree with the others on TJ's produce...it's shockingly bad at my local one, even though I'm in the Bay Area, and therefore close to good produce. Fortunately it's across the street from our WF.
The store layout is also terrible. I have confirmed this at Bay Area, Los Angeles, and DC Trader Joeses. The DC Trader Joes is just painful.
BUT. I do love TJs because I "know what I want" when I go, as the post mentions. It also carries Chimay, a large/inexpensive variety of cheeses [WF's cheese selection is overwhelming], and great pantry & frozen foods.
Soy Corn Dogs FTW! [and I'm a carnivore!]
TJ's is to Whole Paycheck what Aldi's is to your local ginormous, overpriced supermarket. As only ONE other commenter pointed out, they are owned by the same company (and have been for a long time; see http://articles.chicagotribune.com/2008-08-10/business/0808090027_1_aldi-store-brands-grocery).
Do they have a large selection? No. (Neither does Aldi's -- part of its success). Does TJs tell you who makes its store brand organics? No. That is the POINT of a store brand: it is not a brand name, so it does not have a brand name PRICE. Hello!
What you get at TJs -- which is a great selection of organic foods and a lot of gluten-free and dairy-free foods, important for families with food allergies -- is great prices on food that is ridiculously overpriced at Whole Foods and Treasure Island and most other large supermarkets. So if TJ's can sell the same products (or same types of products) as Whole Paycheck, for less, and still make a good profit, what is the markup by Whole Paycheck?? Enormous. And an outrageous rip-off.
Also, from what I have seen, there is little staff turnover at both TJs and Aldi's. I have seen the same employees working at them for years. Why? Because, from what I've been told and have read, both companies treat their employees decently. These days, that's a rare company indeed.
I see no reason to ever shop at Whole Foods (except maybe for free-range, organic meats) when you have a TJ's nearby, just as I see absolutely no reason to shop at Jewel's/Dominick's/Kroger's/Meijer's when there is an Aldi's nearby.
Unless of course you simply must have that brand name... which is totally irrational, and can only be status-seeking. But if you feel the need to pay more at a prestigious store for the exact same thing you could get for less in a low-brow store -- in these times -- then no one can help you, because you probably already lost your house or declared bankruptcy because you didn't dump your expensive leased car for a cheaper, gas-efficient used car so you could make your mortgage.
We've been lied to for a very long time. Sadly, some people believed the lies. But you can't have it all; you can't have everything you want. When you wake up, realize that, wise up, and get over it and yourselves, TJs and Aldi's will still be there for you.
Please come to Denver!!
@kmancha: while I do agree with the basic principles of your post, and that researching and generally being aware of store policies and business standards is very important for all consumers, it is just not realistic for some Americans. When you have little time and money and Walmart/etc. is the only grocer for miles, you have to make do to feed your family. Not every city has local produce or even a Farmers Market. Sad that so many people are forced (basically) into such circumstances.