Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

I believe in ruthlessly dumping the dogs at whatever cost. Why? Because their real cost is in management energy. You always spend more time trying to make the dogs acceptable than in raising the okay stores into winners. And it’s in the dogs that you always have the most personnel problems.

the Byzantine management atmosphere at first Rexall and then Hughes Aircraft had convinced me that the only real security lies in having your own business, and this left-hander was well ahead of the curve on that one. Also, I was convinced that I was on a holy mission in preserving a company owned significantly by its employees. My

We really didn’t pay more per hour than union scale, but we gave people hours. Because union scale is so high, the supermarkets are very stingy with hours and will do anything to avoid paying overtime. I simply built overtime into the system: everyone was to work a five day, forty-eight-hour week. Actually, because of fluctuations in the business,

The people in the stores were long-tenured, partly because most of our full-timers had risen from the ranks of the part-timers; and partly because of the slow growth of the number of stores, so there weren’t scads of promotion opportunities.

We fundamentally changed the point of view of the business from customer-oriented to buyer-oriented. I put our buyers in charge of the company.

Trader Joe’s buying objective was to get just one, dead-net price, delivered to our distribution centers. This was quite similar to the policy that Sam Walton was developing at about the same time, a practice called “contract pricing.”

Given the number of households, I would judge the degree of suitability based on my experience since 1954 in looking at California real estate, and then based on driving the area thoroughly. I would never trust a broker’s judgment. If I saw lots of campers and speedboats in the driveways, I’d ax the location. People who consume high levels of fossi

We instituted full health and dental insurance back in the 1960s when it was cheap. When I left, we were paying about $6,000 per employee per year! Why? If the employees are stressed by medical bills, they may steal. That’s one good reason for Trader Joe’s generous health and dental plans. On the other hand, we were cheap, cheap, cheap on life insu

We never had “closeout” sales. What a terrible practice! You train your customers to wait for the “sale.” Any product that failed to sell was given to charity. We were developing new products all the time; sometimes they didn’t pan out. So we gave them away. I do not believe in “market testing” new products.