Tuesday, October 7, 2014

Tell me again why you love Trader Joe's?

Posted By on Tue, Oct 7, 2014 at 12:46 PM

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The coming Friday birth of Trader Joe's on the city's north end has revealed a weird dichotomy in some of Colorado Springs' food nuts: They're opposed to pre-made frozen food, unless it's pre-made frozen food sold to them by Trader Joe's. So let's look at the inestimable TJ and try to figure it all out.

Trader Joe's is an American brand owned by a division of supermarket chain ALDI Einkauf GmbH & Compagnie, oHG., a global German company with revenues around $53 billion. (For comparison, Whole Foods Market last year saw revenue peak at just under $13 billion.)

It wasn't always that way. The chain started as a series of grocery stores rebooted by a Los Angelan named Joe Coulombe. He opened the first Trader Joe's in 1967, and nothing was ever the same, writes Los Angeles magazine:

"Born out of L.A.’s optimistic postwar expansion and the food revolution of the ’70s, when pamphleteers like Alice Waters in Berkeley and Michael McCarty in Santa Monica issued their screeds in squid ink on pasta plates, Coulombe’s influence cannot be overstated," reads a piece from September 2011. "He transformed the way we shop and what we eat."

Then Aldi bought it in 1979, and developed it into the pimper of cheap cookie-peanut-butter you see today. Business Insider says the chain will open 38 additional stores this year, and manages to rake in sales of $1,734 per square foot, as opposed to $930 PSF at the much higher-priced Whole Foods.

The main reason? "Consumers view Trader Joe's as high-quality but inexpensive," says BI, so they pack the stores. For example: "A bag of quinoa is $9.99 at Whole Foods, but $4.99 at Trader Joe's. Meanwhile, gluten-free cheese pizza is $7.49 at Whole Foods vs. $4.99 at Trader Joe's ..."

As this "Stunning Look at the 17 Most Popular Items at Trader Joe's" piece offers, you can also buy: imitation Oreos, Greek yogurt guacamole, microwaveable mac-and-cheese and an ass-load, literally, of candy. And as these items are highlighted in part, but craved as a whole, never send to know for whom the bells tolls, bag of frozen mandarin-orange chicken — it tolls for thee.

And, of course, all this delightful expansion, like the store opening at University Village Colorado, comes at a cost, and as usual it's borne by the employees (who are still compensated better than most in the industry). While it was laudable that part-time workers used to receive insurance, that's no longer the case, writes Huffington Post:

"But with low-wage workers eligible for tax subsidies to buy health insurance next year, the company has apparently calculated that offering medical coverage to part-timers who work 18 hours or more is no longer worth the cost."

Also: "[CEO Dan Bane informed] workers that corporate contributions to employee retirement accounts would be drastically scaled back, by a third for some and two-thirds for others. Bane argued that the company's 'very generous' contribution rates had been too high for the industry."

So, basically, we're looking at some billion-dollar hybrid of Whole Foods and Walmart expanding its dominance in a market where chain stores flourish and local gasps for air. Sounds like a good business move on the company's part, but tell me again why you love Trader Joe's?

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