Trader Joe's Quotes

I still believe in the Holy Trinity, except now it's Target, Trader Joe's, and IKEA.

I do love Trader Joe’s,” I said, smiling at the bag. “Nothing like a grocery store that makes you have to visit another grocery store right after.

We don’t talk about it. There’s never so much as a knowing look. We sit here in silence, eating our lunch. But I know we are all here for the same reason. We’re all searching for a piece of home, or a piece of ourselves. We look for a taste of it in the food we order and the ingredients we buy. Then we separate. We bring the haul back to our dorm rooms or our suburban kitchens, and we re-create the dish that couldn’t be made without our journey. What we’re looking for isn’t available at a Trader Joe’s. H Mart is where your people gather under one odorous roof, full of faith that they’ll find something they can’t find anywhere else.

Sure, sex is fun, but have you ever been to Trader Joe’s right after a restock?

Everything already talks,” Joe told her. “Plants, animals, even that old truck of mine. The trick is figuring out their language, learning to hear what they’re saying so that it makes sense.

Plus, you don't go to Trader Joe's unless you're in it. It's grocery IKEA. Everybody knows that. You have to be prepared to fight. That's long relationship territory. Like, we're talking picking people up from the airport.

Live intensely," Joe tells me. "Live big. The cousins have a saying: 'Walk large as trees, with the blood quick in you and swift-running.' In other words, don't let there be holes in your life where somebody else can creep into your head...

In a lecture at the University of Southern California Business School, I talked about this. A young woman raised her hand: “But how could you afford to pay so much more than your competition?” The answer, of course, is that good people pay by their extra productivity. You can’t afford to have cheap employees.

It is better to be vaguely right than exactly wrong. —Carveth Read

Time and again I am asked why no one has successfully replicated Trader Joe’s. The answer is that no one has been willing to pay the wages and benefits, and thereby attract—and keep—the quality of people who work at Trader Joe’s. My standard was simple: the average full-time employee in the stores would make the median family income for California. Back in those days it was about $7,000; as I write this, it is around $40,000. What I didn’t count on back there in the 1960s was that so many spouses would go to work in the national economy. When I started, average family income was about the same as average employee income. The great social change of the 1970s and 1980s moved millions of women into the workplace. Average family income soared ahead. But we stuck with our standard, and it paid off.

I felt like I was failing at widowhood. I missed my husband, but no one knew that when they looked at me. They just saw a mom with blonde highlights going to yoga, picking up her daughter from school, buying groceries at Trader Joe’s. And now I was at a party with a date when I should have been home, grieving, all alone. I didn’t look like a widow. I wasn’t acting like a widow. But I felt like a widow. I guess I was just widowish.

While I'm waiting, I reach into the cupboard for dried pineapple. I added them to the grocery order because I find them reassuring, but they have to be the right kind. Ma started buying the fancy natural low-sulfur version from Trader Joe's in the past few years. Those are fibrous and taste good for you. These are the ones from my childhood, which just taste good. They are as yellow as lemons, crusted all around with sugar. The inside is as thick and wet as a gumdrop.

We sit here in silence, eating our lunch. But I know we are all here for the same reason. We’re all searching for a piece of home, or a piece of ourselves. We look for a taste of it in the food we order and the ingredients we buy. Then we separate. We bring the haul back to our dorm rooms or our suburban kitchens, and we re-create the dish that couldn’t be made without our journey. What we’re looking for isn’t available at a Trader Joe’s. H Mart is where your people gather under one odorous roof, full of faith that they’ll find something they can’t find anywhere else. In

I concluded that I didn’t have to find an optimum solution to Pronto’s difficulties, just a reasonable one. Trying to find an optimum solution in business is a waste of time: the factors in the equation are changing all the time. But you’ve got to have something to hang your hat on. The one core value that I chose was our high compensation policies, which I had put in place from the very start in 1958. This may sound like a strange way for polarizing a business, but I did not want to destroy the faith that Pronto Markets’ then-handful of employees had in me and in our common future. After all, they had just ponied up half the equity money needed to buy out Rexall.

We hold these stories and mad idea and events in our head and they run around and around telling us we are different, separate, broken. Then one day the mad idea escapes the asylum. Most times it’s unplanned. It just tumbles out on the lap of the man sitting next to us on the bus, or it slips sideways into a conversation on line at the Trader Joe’s or it falls out at the kitchen table when your neighbor comes to pick up her cat. And there is a terrifying moment when it first hits the light of day, where we think, “holy mother of God! What have I done? How could I have been to casual with my crazy ways?” But the man on the bus just smiles and nods his head, and the casher takes a moment to look us in the eye and the neighbor sits for a cup of tea and together we move into some new agreements that we are all in fact crazy and it’s so much nicer to be out of the closet with it all.

Vegan Chocolate Cupcake A chocolate cupcake with a soy milk base and organic chocolate frosting. 1 cup soy milk 1 teaspoon apple cider vinegar ⅔ cup agave nectar ⅓ cup canola oil 1 teaspoon vanilla extract ½ teaspoon almond extract 1 cup all-purpose organic flour ⅓ cup cocoa powder, unsweetened ¾ teaspoon baking soda ½ teaspoon baking powder ¼ teaspoon salt Preheat oven to 350. Whisk together soy milk and vinegar in a large bowl and set aside until it curdles. Add the agave nectar, oil, vanilla extract, and almond extract to the soy milk mixture and beat until foamy. In another bowl, sift together the flour, cocoa powder, baking soda, baking powder, and salt. Add to the wet ingredients and beat until no lumps remain. Pour into cupcake liners until they are ¾ of the way full. Bake 18–20 minutes until a knife inserted comes out clean. Cool on wire racks. Vegan Chocolate Frosting 1 cup cocoa powder, unsweetened ¾ cup organic margarine, softened 1 teaspoon vanilla 1 cup agave nectar In a small bowl, mix together the cocoa powder, margarine, vanilla, and agave nectar. Beat until it is smooth. Spread on top of cupcake with a rubber spatula. Vegan Vanilla Cupcake A vanilla cupcake with a soy milk base and an organic vanilla frosting. 1 cup vanilla soy milk 1 teaspoon apple cider vinegar ⅔ cup agave nectar ⅓ cup canola oil 2 teaspoons vanilla extract 1 cup all-purpose organic flour ¾ teaspoon baking soda ½ teaspoon baking powder ¼ teaspoon salt Preheat oven to 350. Whisk together soy milk and vinegar in a large bowl and set aside until it curdles. Add the agave nectar, oil, and vanilla extract to the soy milk mixture and beat with an electric mixer until foamy. In another bowl, sift together the flour, baking soda, baking powder, and salt. Add to the wet ingredients and beat until no lumps remain. Pour into cupcake liners until they are ⅔ of the way full. Bake 18–20 minutes until a knife inserted comes out clean. Cool on wire racks. Vegan Vanilla Frosting 6 tablespoons vanilla soy milk 2 tablespoons Trader Joe’s Vanilla Bean Paste ¼ cup organic margarine 1 16-ounce package organic powdered sugar, sifted In a small bowl, mix together soy milk, vanilla bean paste, and margarine. Slowly beat in the sugar until frosting is smooth. Spread on top of cupcake with a rubber spatula.

Matt takes some time to settle himself before he speaks. When he does, he shares an anecdote about how Julie had written a book for him to have after she was gone, and she titled it, The Shortest Longest Romance: An Epic Love and Loss Story. He loses it here, then slowly composes himself and keeps going. He explains that in the book, he was surprised to find that near the end of the story—their story—Julie had included a chapter on how she hoped Matt would always have love in his life. She encouraged him to be honest and kind to what she called his “grief girlfriends”—the rebound girlfriends, the women he’ll date as he heals. Don’t mislead them, she wrote. Maybe you can get something from each other. She followed this with a charming and hilarious dating profile that Matt could use to find his grief girlfriends, and then she got more serious. She wrote the most achingly beautiful love letter in the form of another dating profile that Matt could use to find the person he’d end up with for good. She talked about his quirks, his devotion, their steamy sex life, the incredible family she inherited (and that, presumably, this new woman would inherit), and what an amazing father he’d be. She knew this, she wrote, because they got to be parents together—though in utero and for only a matter of months. The people in the crowd are simultaneously crying and laughing by the time Matt finishes reading. Everyone should have at least one epic love story in their lives, Julie concluded. Ours was that for me. If we’re lucky, we might get two. I wish you another epic love story. We all think it ends there, but then Matt says that he feels it’s only fair that Julie have love wherever she is too. So in that spirit, he says, he’s written her a dating profile for heaven. There are a few chuckles, although they’re hesitant at first. Is this too morbid? But no, it’s exactly what Julie would have wanted, I think. It’s out-there and uncomfortable and funny and sad, and soon everyone is laugh-sobbing with abandon. She hates mushrooms, Matt has written to her heavenly beau, don’t serve her anything with mushrooms. And If there’s a Trader Joe’s, and she says that she wants to work there, be supportive. You’ll also get great discounts. He goes on to talk about how Julie rebelled against death in many ways, but primarily by what Matt liked to call “doing kindnesses” for others, leaving the world a better place than she found it. He doesn’t enumerate them, but I know what they are—and the recipients of her kindnesses all speak about them anyway.

Supermarkets tend to sell all seafoods from their meat departments, usually in thawed (so-called fresh) form, sometimes packaged, sometimes in bulk from a service case.

If all the facts could be known, idiots could make the decisions. —Tex Thornton, cofounder of Litton Industries, quoted in the Los Angeles Times in the mid-1960s. This is my favorite of all managerial quotes.

In 1962, Barbara Tuchman published The Guns of August, an account of the first ninety days of World War I. It’s the best book on management—and, especially, mismanagement—I’ve ever read. The most basic conclusion I drew from her book was that, if you adopt a reasonable strategy, as opposed to waiting for an optimum strategy, and stick with it, you’ll probably succeed. Tenacity is as important as brilliance. The Germans and French both had brilliant general staffs, but neither side had the tenacity to stick with their prewar plans. As a result, the first ninety days of war ended

Twenty-eight years later, the Economist of November 10, 1990, put it this way: . . . non-convex problems . . . are puzzles in which there may be several good but not ideal answers which classical search techniques may wrongly identify as the best one.

The one core value that I chose was our high compensation policies, which I had put in place from the very start in 1958. This may sound like a strange way for polarizing a business, but I did not want to destroy the faith that Pronto Markets’ then-handful of employees had in me and in our common future. After all, they had just ponied up half the equity money needed to buy out Rexall.

Early in my career I learned there are two kinds of decisions: the ones that are easily reversible and the ones that aren’t.

To this day, the promotion of Extra Large AA eggs is one of the foundations of Trader Joe’s merchandising, not just because of the program per se, but because it set me to wondering whether there weren’t other discontinuities out there in the supplies of merchandise. Eight years later, we built Trader Joe’s on the principle of discontinuity.

When we left Stanford, my father-in-law, Bill Steere, a professor of botany, gave me a subscription to Scientific American. In terms of creating my fortune, it’s the most important magazine I’ve ever read.

A second news item, one from the Wall Street Journal, told me that the Boeing 747 would go into service in 1970, and that it would slash the cost of international travel. (It did: the real cost of going to Europe today is about one-fifteenth of what it was in 1950.) In Pronto Markets we had noticed that people who traveled—even to San Francisco—were far more adventurous in what they were willing to put in their stomachs. Travel is, after all, a form of education.

In response to Napoleon’s problems with feeding his huge army, Nicolas Appert invented canning in 1809. This was the first step away from bulk retailing. About thirty years after Waterloo, America had its first branded canned food, which was probably Underwood’s deviled ham. During the Civil War, which also stimulated food technology, Gail Borden invented canned milk, and after that an avalanche of branded food products appeared: Royal Baking Powder, Baker’s Chocolate, et al.

The pace quickened after the first automatic glass bottle machine was built in the 1890s, making possible the soft drink brands like Coca-Cola (as opposed to being dispensed in bulk from soda fountains).

In the meantime, the Kraft brown paper bag was invented about 1870, making it possible to put all your store-bought purchases in a paper bag, a phenomenon that even today is unusual in Europe.

The brands had to advertise. Print media was all that was available, and the great mass-circulation magazines like the Saturday Evening Post and Collier’s rose on the strength of brand advertising, such as George Washington Hill’s immortal “Reach for a Lucky instead of a sweet.” Newspapers also thrived on brand advertising.

Shopping centers” are mostly a post–World War II phenomenon. The supermarket was then perfected by yet another set of wheels, when the shopping cart was invented in 1937.

As a result, supermarket merchandising has always been brand-oriented. One result of this has been that supermarkets have rarely been known for their product knowledge, about what they sold. Indeed, the supermarkets of the 1930s usually operated only the dry grocery department, which was mostly branded goods; bakery, produce, meat, and liquor were usually concessions.

You might think of Trader Joe’s as one of the more esoteric cable channels; the supermarkets as NBC-CBS-ABC.

Give me a fruitful error any time, full of seeds, bursting with its own corrections. You can keep your sterile truth for yourself. —Pareto’s comment on Kepler, quoted by Stephen Jay Gould in The Panda’s Thumb

Most of my ideas about how to act as an entrepreneur are derived from The Revolt of the Masses by Jose Ortega y Gasset, the greatest Spanish philosopher of the twentieth century. Although it was published in 1929, the year before I was born, I believe this book still offers the clearest explanation of the times in which we live. And I believe it offers a master “plan of action” for the would-be entrepreneur, who usually has no reputation and few resources.

Even the man who attempts to rule with janissaries depends on their opinion and the opinion which the rest of the inhabitants have of them. The truth is that there is no ruling with janissaries. As Talleyrand said to Napoleon, “You can do everything with bayonets, sire, except sit on them!” (The Revolt of the Masses, chapter 14, “Who Rules in the World?”)

Here’s a good question: Given my need to get away from convenience stores, why did I stick with small stores? If in 1967 it was justified because I had eighteen of them already, surely it was no longer justified in the 1980s when Trader Joe’s had become a powerful, successful operation. The answer was verbalized for us in In Search of Excellence, Tom Peter’s best-selling book on management that appeared in 1983. He called it “The Power of Chunking”: The essential building block of a company is the section [which] within its sphere does not await executive orders but takes initiatives. The key factor for success is getting one’s arms around almost any practical problem and knocking it off. . . . The small group is the most visible of the chunking devices.

The fundamental “chunk” of Trader Joe’s is the individual store with its highly paid Captain and staff: people who are capable of exercising discretion. I admire Nordstrom’s fundamental instruction to its employees: use your best judgment.

When we first opened Good Time Charley, it was open 7:00 a.m. to midnight, like Pronto. As time went on, we progressively shortened the hours down to 9:00 a.m. to 9:00 p.m. Each time we shortened hours, we made more money: there were fewer “shifts” and more interaction among the staff.

Whether the mild paranoia generated by a name that few people can pronounce was a factor in my shaping Trader Joe’s, I leave to your judgment. Whether the substantial paranoia generated by being a left-hander in a right-handed world was a factor in putting a left-handed spin on Trader Joe’s, however, is beyond dispute. For some competitors, Trader Joe’s has been sinister in at least two meanings of the word.

But I hope you’ll consider the following, my favorite quote from my favorite book on management, The Winning Performance by Clifford and Cavanaugh: The fourth [general theme in winning corporations] is a view of profit and wealth-creation as inevitable by-products of doing other things well. Money is a useful yardstick for measuring quantitative performance and profit and an obligation to investors. But . . . making money as an end in itself ranks low. In 1994 Stanford Business School published a study of winning companies (companies that have endured for a hundred years) called “Built to Last,” which came to pretty much the same conclusion.

For a while I wondered how that association, which lasted almost forty years until his death in 1993, was forged, until I realized it was simple: we were both left-handed. I think that handedness is the most important thing one can know about a person. The question was never on the employment application forms, and it’s probably verboten to ask these days. But dyslexia lurks in the brain of every left-hander, which means, we see the world differently, sometimes profitably. That’s why, when I interview people, I try to get them to write something. At one point I was accused of running a cabal of left-handers at Trader Joe’s. One of them, Doug Rauch, is President of Trader Joe’s on the East Coast as of this writing

Seventeen years later, when I finally sold the company, the cost basis of my total investment was only $25,000.

Equally important was our practice of giving every full-time employee an interview every six months. At Stanford I’d been taught that employees never organize because of money: they organize because of un-listened-to grievances. We set up a program under which each employee (including some part-timers) was interviewed, not by the immediate superior, the store manager, but by the manager’s superior.

In l982, however, the success of the KFAC broadcasts was so apparent that I dropped all newspaper advertising and put the money into outright commercials for Trader Joe’s. These were broadcast on demographically suited radio stations: mostly all-news or all-classical. This is still the pattern followed by Trader Joe’s. About the format of the sixty-second radio spots, which has attracted a lot of attention in media circles: I think that most radio commercials are terrible. They have too many “production values.” Even worse, they issue commands to the listener: “Buy this!” “Shop now!” “Hurry!” One should never use a mandatory sentence in addressing a customer; should never give orders. The subliminal message of a Trader Joe’s commercial is, “We’re gonna be around for a long time. If you miss out on this bargain, there’ll be another. If you have the time and inclination . . .” Most supermarket radio spots are paid for by cooperative advertising allowances from manufacturers. The supermarkets jam as many brands into sixty seconds as possible, because it maximizes their revenue. Information be damned! In sharp contrast, each Trader Joe’s spot was devoted to a single product, about which we tried to develop a story.

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. From 1958 through 1976, we tried to carry what the customers asked for, given the limits of our small stores and other operational parameters. Each store manager had great latitude in what was carried and from what supplier it was ordered. There was very little central distribution except for Trader Joe’s labeled California wines or imports. Each store probably had access to ten thousand stock keeping units (SKUs), of which about three thousand were actually stocked in any given week. By the time I left in 1989, we were down to a band of 1,100 to 1,500 SKUs, all of which were delivered through a central distribution system. The managers no longer had any buying discretion and there were no “DSDs,” or direct store deliveries. And along the way not only did we drop a lot of products that our customers would have liked us to sell, even at not-outstanding prices, but we stopped cashing checks in excess of the amount of purchase, we stopped all full-case discounts, and we persistently shortened the hours. We violated every received-wisdom of retailing except one: we delivered great value, which is where most retailers fail.

As a second way to pump investment into the Pronto stores, to support our high wage costs, we began to add hard liquor, instead of just beer and wine, to the stores. (We did this well before 7-Eleven’s arrival.) The cost of a liquor license in those days was so great that the addition of a liquor license, and its added high-value-per-cubic-inch inventory, doubled our investment in a store without expanding beyond the 2,400 square foot conventional convenience store module.

As we evolved Trader Joe’s, its greatest departure from the norm wasn’t its size or its decor. It was our commitment to product knowledge, something which was totally foreign to the mass-merchant culture, and our turning our backs to branded merchandise.

The State begins when groups, naturally divided, find themselves obliged to live in common. This obligation is not of brute force, but implies an impelling purpose, a common task which is set before the dispersed groups. Before all, the State is a plan of action and a Programme of Collaboration. The men are called upon so that together they may do something. . . . It is pure dynamism, the will to do something in common, and thanks to this the idea of the State, is bounded by no physical limits. . .

Most of my career has been spent selling “plans of action and programmes of collaboration,” whether to Rexall to start up Pronto Markets; or Bank of America to buy out Pronto; or landlords; or vendors, many of whom have been very skeptical of, if not outright hostile to, my plans; and above all to my employees. If you want to know what differentiates me from most managers, that’s it. From the beginning, thanks to Ortega y Gasset, I’ve been aware of the need to sell everybody.

It’s a hard policy to sell to most managements. Even to my own management! For years I used to take all new employees to lunch. Among other admonitions, I told them that if they ever got a better offer, they should take it. As soon as they could, my field supervisors ended those lunches. Another frank idea was vetoed by my top people: I wanted to publish their salaries and bonuses, and mine, every year when we issued our annual compensation bulletins.

In 1935, in the pit of the Depression, when milk was being sold below cost, Merritt’s father had helped write the “milk control” laws, which partly govern California’s milk business (they have since been updated several times), especially the relations between the milk companies and grocery stores. After World War II, these laws increasingly were honored in the breach, as the big creameries and the big supermarket chains cut deals for illegal rebates or illegal financing or both. This is the normal result of quasi-fascist laws that try to regulate the marketplace. But in 1935, Benito Mussolini’s concept of binding state and industry together (the fasces is a Roman symbol, an ax with a bundle of sticks tied around its handle; the sticks represent the industries and the church, the ax represents the state, a one-for-all-and-all-for-one construct) was so popular around the world that Franklin D. Roosevelt tried to copy it with the Blue Eagle National Recovery Administration, until the Supreme Court threw it out in 1937. Relics of Mussolini, however, linger in all the states of the union, sometimes in milk control laws (and always in alcoholic beverage laws).

By the time I bought Pronto Markets, it might have taken only a slightly bigger trailer, mostly to accommodate the cribs for the two kids we now had. We did find the money, somehow. Rexall was willing to take back paper. (Dart was in a hurry to wind up his retailing affairs. This was a big advantage for me, because if I walked away, he’d be left with a crumb of a bastard business.) We had $4,000 from Alice’s savings from her teaching school before she had the kids (we lived on my $325) and we sold our little house in which we had an equity of $7,000. I borrowed $2,000 from my grandmother and $5,000 from my father. (Pop, an engineer, spent most of his career being alternately employed and dis-employed by General Dynamics depending on the vagaries of the aerospace business; in between he owned a series of small businesses. I think he even had a Mac Tool route in 1962.)

But we were still way short when I went to see Tom Deane at Bank of America. I presented my case; and—on the spot (!)—he loaned me the money on our (Alice’s and mine) personal signatures. Years later, I asked him how he had been so ballsy. “It’s simple,” he replied. “Rexall was on Pronto’s leases, and I figured they wouldn’t let you go bankrupt.

Actually, because of fluctuations in the business, employees often alternate between four-day and six-day weeks (38.5 hours to 57.5 hours). This generates a lot of three-day weekends, which is quite popular with the troops.

[The problem with unions is not their pay scales; it’s their work rules and seniority rules.

The principal purpose of this program was to vent grievances and address them where possible. And I think this program was as important as pay in keeping employees with us. Productivity in part is the product of tenure. That’s why I believe that turnover is the most expensive form of labor expense. I am proud that, during my thirty years at Pronto and Trader Joe’s, we had virtually no turnover of full-time employees, except for the ordinary human problems of too, too solid flesh.

The tagline “thanks for listening,” which has been so copied and admired, derived from the successful 1976 senatorial campaign of S. I. Hayakawa. Hayakawa was a professor of linguistics at San Francisco State University (before he became university president). He knew how to use the English language. The calm manner of his radio commercials, his thanking the listener for staying tuned, really impressed me and, six years later, provided the chassis and the closer for Trader Joe’s commercials. We used the commercials to keep us in front of the public between editions of the Fearless Flyer. We didn’t do both at the same time, or else the stores would have been overwhelmed with business. In short, the radio commercials were and are extremely effective. In the course of this, my voice became one of the best known in California.

The audience for Channel 28, the PBS station in Los Angeles, was demographically perfect for Trader Joe’s. In those days, however, PBS did not accept overt commercials. Alice had been quite active as a volunteer at the station. Through her contacts, we made arrangements to sponsor reruns of shows that tied to Trader Joe’s, such as the Julia Child shows, The Galloping Gourmet, and Barbara Wodehouse’s series on training dogs, which proved very effective! These reruns were not expensive compared with sponsoring first-runs and they had very good audiences. All we got was a “billboard” announcing that Trader Joe’s was sponsoring the show, but this was a cost-effective way of building our presence in the community. Another way we promoted ourselves on public TV was to “man the phones” during pledge drives. Our employees, led by Robin Guentert who was running advertising at that time (Robin became one of the most important members of store supervision after 1982, then President of Trader Joe’s in 2002), would show up en masse at the station. They loved being on TV, and we got the publicity. Promoting through Nonprofits Most retailers, when they’re approached by charities for donations, do their best to stiff-arm the would-be donees, or ask that a grueling series of requirements need to be met. In general they hate giving except to big, organized charities like United Way, because that way they escape being solicited by all sorts of uncomfortable pressure groups. At the very beginning of Trader Joe’s, however, we adopted a policy of using non-profit giving as an advertising and promotional tool. We established these policies: Never give cash to anyone. Never buy space in a program. That is money thrown away. Give freely, give generously, but only to nonprofits that are focused on the overeducated and underpaid. Any museum opening, any art gallery opening, any hospital auxiliary benefit, any college alumni gathering, the American Association of University Women, the Assistance League, any chamber orchestra benefit—their requests got a very warm welcome. But nothing for Little League, Pop Warner, et al.; that was not what Trader Joe’s was about.

What we gave mostly was wine. Especially after we made this legal(!) by acquiring that Master Wine Grower’s license in 1973. Most requests were made by women (not men) who had been drafted by their respective organizations to somehow get wine for an event. We made a specialty of giving them a warm welcome from the first call. All we wanted was the organization’s 501c3 number, and from which store they wanted to pick it up. We wanted to make that woman, and her friends, our customers. But we didn’t want credit in the program, as we knew the word would get out from that oh-so-grateful woman who had probably been turned down by six markets before she called us. Everybody wanted champagne. We firmly refused to donate it, because the federal excise tax on sparkling wine is so great compared with the tax on still wine. To relieve pressure on our managers, we finally centralized giving into the office. When I left Trader Joe’s, Pat St. John had set up a special Macintosh file just to handle the three hundred organizations to which we would donate in the course of a year. I charged all this to advertising. That’s what it was, and it was advertising of the most productive sort. Giving Space on Shopping Bags One of the most productive ways into the hearts of nonprofits was to print their programs on our shopping bags. Thus, each year, we printed the upcoming season for the Los Angeles Opera Co., or an upcoming exhibition at the Huntington Library, or the season for the San Diego Symphony, etc. Just printing this advertising material won us the support of all the members of the organization, and often made the season or the event a success. Our biggest problem was rationing the space on the shopping bags. All we wanted was camera-ready copy from the opera, symphony, museum, etc. This was a very effective way to build the core customers of Trader Joe’s. We even localized the bags, customizing them for the San Diego, Los Angeles, and San Francisco market areas. Several years after I left, Trader Joe’s abandoned the practice because it was just too complicated to administer after they expanded into Arizona, Washington, etc., and they no longer had my wife, Alice, running interference with the music and arts groups. This left an opportunity for small retailers in local areas, and I strongly recommended it to them. In 1994, while running the troubled Petrini’s Markets in San Francisco, I tried the same thing, again with success, for the San Francisco Ballet and a couple of museums.

Word of Mouth: the Power of True Believers As everyone knows, word of mouth is the most effective advertising of all. Or, when in my cups, I have been known to say that there’s no better business to run than a cult. Trader Joe’s became a cult of the overeducated and underpaid, partly because we deliberately tried to make it a cult once we got a handle on what we were actually doing, and partly because we kept the implicit promises with our clientele. I used to work every Thanksgiving Day in one of the stores. They only let me bag, because I had lost all my checker skills. One Thanksgiving, a woman came in and asked for bourbon. I told her that we had none, because we had not been able to make the right kind of deal (this was after the end of Fair Trade, when we were deep in the Mac the Knife mode). “That’s all right,” she exclaimed. “I know what you’re trying to do for us!” Note the us. There aren’t many cult retailers who successfully retain their cult status over a long period of time. A couple in California are In ’n Out Burger and Fry’s Electronics. But across America, in every town, there’s a particular donut shop, pizza parlor, bakery, greengrocer, bar, etc., that has a cult following of True Believers. The old Petrini’s of the 1950s and 1960s had that status when it came to meat. Brooks Bros had that status until the 1970s. S. S. Pierce in Boston was another. But all of them failed to keep the faith. Beware of ever betraying the True Believers! The fury of a woman scorned is nothing compared with that of a betrayed cultee.

After that I became somewhat of a connoisseur of the Fair Labor Standards Act, and of California’s Labor Department’s own interpretations of it. This knowledge has served me in good stead in all the companies I ran post–Trader Joe’s and in all my consulting work.

When I was young, all the institutions were staffed with these Depression-scarred men—banks, utilities, railroads, most government bureaus, even letter-carriers. In many cases, they were overqualified for the work they performed and as a result the institutions tended to perform well. This is an aspect of the Truman-Eisenhower years—years that now seem islands of calm—that is overlooked.

I had some idea of what had to be done, thanks to all we had been learning during the previous six years—from breaking Fair Trade on imported wine, developing private label California wine, and busting the price of health foods and cheeses. But to an extent we were just like a little kid running around while being kept from harm by a kiddie-keeper. We were “protected” by price controls on almost 50 percent of what we sold. Now we were ready to throw off the leash.

The Most Important Strategic Decision Was to Become a Genuine Retailer The fundamental job of a retailer is to buy goods whole, cut them into pieces, and sell the pieces to the ultimate consumers. This is the most important mental construct I can impart to those of you who want to enter retailing. Most “retailers” have no idea of the formal meaning of the word. Time and again I had to remind myself just what my role in society was supposed to be. Many of the policy decisions for a retailer boil down to this: How closely should we stick to the fundamental retailing job? “Retail” comes from a medieval French verb, retailer, which means “to cut into pieces.” “Tailor” comes from the same verb. The fact is that most so-called retailers don’t want to face up to their basic job. In Pronto Markets we did everything we could to avoid retailing. We tried to shift the burden to suppliers, buying prepackaged goods, hopefully pre-price-marked (potato chips, bread, cupcakes, magazines, paperback books) so we had no role in the pricing decision. The goods were ordered, displayed, and returned by outside salespeople. To this day, supermarkets fight with the retail clerks’ union to expand their right to let core store work be done by outsiders. Whole Earth Harry’s moves into wine and health foods had taken us quite a distance into genuine retailing. In our cheese departments we were literally taking whole wheels and cutting them into pieces. I took this as an analogy for what we should do with everything we sold. Getting rid of all outside salespeople was corollary to the programs that would unfold during the next five years. In Mac the Knife, no outsiders of any sort were permitted in the store. All the work was done by employees. The closest thing to it that I see these days is Costco, which shares many features with Trader Joe’s.

Key Elements of Five Year Plan ’77 What follows did not happen overnight. Among the guidelines set in February 1977 (remember, Fair Trade on alcohol was not finally ended until 1978): Emphasize edibles vs. non-edibles. I figured that the supermarkets would raise their prices on foods to make up for the newly reduced margins on milk and alcohol. This would give us all the more room to underprice them. During the next five years we got rid of film, hosiery, light bulbs and hardware, greeting cards, batteries, magazines, all health and beauty aids except those with a “health food” twist. We began to cut back sharply on soaps and cleaners and paper goods. The only non-edibles we emphasized were “tabletop” items like wineglasses, cork pullers, and candles. It was quite clear that we should put more emphasis on food and less on alcohol and milk. Within edibles, drop all ordinary branded products like Best Foods, Folgers, or Weber’s bread. I felt that a dichotomy was developing between “groceries” and “food.” By “groceries,” I mean the highly advertised, highly packaged, “value added” products being emphasized by supermarkets, the kinds that brought slotting allowances and co-op advertising allowances. By embracing these “plastic” products, I felt the supermarkets were abandoning “food” and the product knowledge required to buy and sell it. But this position wasn’t entirely altruistic. The plan of February 20, 1977, declared, “Most independent supermarkets have been driven out of business, because they stupidly tried to compete with the big chains in plastic goods, in which the big chains excel.” Focus on discontinuity of supplies. Be willing to discontinue any product if we are unable to offer the right deal to the customer. Instead of national brands, focus on either Trader Joe’s label products or “no label” products like nuts and dried fruits. This was intended to enable the Trader Joe’s label to pick up momentum in the stores. And it worked.

Carry individual items as opposed to whole lines. We wouldn’t try to carry a whole line of spices, or bag candy, or vitamins. Each SKU (a single size of a single flavor of a single item) had to justify itself, as opposed to riding piggyback into the stores just so we had a “complete” line. Depth of assortment now was of no interest. As soon as Fair Trade ended in 1978, we began to get rid of the hundred brands of Scotch, seventy brands of bourbon, and fifty brands of gin. And slowly (it was like pulling teeth) we dismantled the broad assortment of California boutique wines. No fixtures. By 1982, the store would have most of its merchandise displayed in stacks with very little shelving. This implied a lower SKU count: a high-SKU store needs lots of shelves. The average supermarket carries about 27,000 SKUs in 30,000 square feet of sales area, or roughly one SKU per square foot. Trader Joe’s, by 1988, carried one SKU per five square feet! Price-Costco, one of my heroes, carried about one SKU per twenty square feet. As much as possible I wanted products to be displayed in the same cartons in which they were shipped by the manufacturers. This was already a key element in our wine merchandising. Each SKU would stand on its own two feet as a profit center. We would earn a gross profit on each SKU that was justified by the cost of handling that item. There would be no “loss leaders.” Above all we would not carry any item unless we could be outstanding in terms of price (and make a profit at that price per #7) or uniqueness. By the end of 1977, we increased the size of the buying staff, adding one very key person, Doug Rauch, whom we hired out of the wholesale health food trade. Leroy, Frank Kono, Bob Berning, and Doug rolled out Five Year Plan ’77, which for purposes of this history I call Mac the Knife. Back in those days we had no idea how sharp that knife would become! We just wanted to survive deregulation. Everything now depended on buying. So here we go into the next chapter, Intensive Buying.

The problem with a convenience store (a small store with a small inventory and few fixtures) is that it is hard to invest enough money to let the people be productive enough to justify high wages and benefits. I had put the cart—the high wages—before the horse—the convenience market. Perhaps, as the young lady from Stanford commented in 1986, I had done the right thing for the wrong reason. Much of my career was spent trying to find ways to pay the high wages to which I was totally committed. First we upped the investment ante by taking only prime locations, which could generate the most sales, even though the rents were higher.

Despite my desperate need for money as Pronto emerged from Rexall in 1962, I’d had a bellyful of under-the-table offers from creameries. “We’ll pay you in cash, if you’ll just meet us anywhere outside the United States—our foreign subsidiaries will fund it, and the IRS will never know.” That was a typical pitch. I was prudent enough to guess, however, that it would expose me to blackmail should I ever try to switch brands.

I remember one creamery sales manager so grizzled that he had lines on his wrinkles, a Dorian Gray with no surrogate in the attic. Young and bumptious, trying to make the newborn Pronto look good to Rexall, I asked for both illegal fixture financing and illegal discounts on milk. “You can’t milk both ends of the cow, Joe,” he replied softly.

The rules of warfare seem to go in cycles alternating from neat rows—the Roman square, the French knights at Agincourt, the fixed battles of the early eighteenth century, the trenches of 1915–18, and the Maginot/Siegfried lines—to rules that stress mobility, irregularity, adaptability—Attila the Hun, the English longbowmen at Agincourt, the colonial guerrillas in 1776, both sides in our Civil War, the German panzers, the Viet Cong, and the Afghan guerrillas.

The willingness to do without any given product is one of the cornerstones of Trader Joe’s merchandising philosophy.

Each private label product, therefore, had to have a reason, a point of differentiation.

No bulky products like paper towels or sugar, because the high-value-per-cubic-inch rule still prevailed.

I believe in the wisdom that you gain customers one by one, but you lose them in droves.

Look at any supermarket ad. You’ll learn precious little about the provenance of any product in it; you’ll see only name, size, and price.

People often ask me, how many stores did we have at such-and-such a time? It’s the wrong question to ask. What’s important is dollar sales. For example, from 1980 to 1988, we increased the number of stores by 50 percent, but sales were up 340 percent.

Originally, we distributed the Fearless Flyer only in the stores and to a small but growing subscriber list. Doing a mailing to individual addresses, however, was a rotten chore: Americans move about every three years. In 1980, I attended a marketing lecture that taught me that, when someone moves, someone just like them is likely to occupy the same address. This proved to be correct. By mailing to addresses rather than to individuals—by blanketing entire ZIP codes—we were able to tremendously expand the distribution of the Fearless Flyer. The ZIPs to which we mailed, of course, were chosen on the basis of the likely concentration of overeducated and underpaid people.

In the end, women did succeed in getting men into the kitchen, just not their husbands. No, they’ve ended up instead with the men who run General Mills and Kraft, Whole Foods and Trader Joe’s.

You love each other no matter how insane the other person makes you. It's matching the insanities that makes a marriage work. For example, I'm not allowed to purchase curtains or furniture without measuring first. And he can never find anything. Ever. My favorite is the time he only looked in one of his jeans pockets for his keys. After about an hour I made him check his pockets again. Both pockets. And there they were. When I asked him why he didn't check both pockets the first time, he said he always only puts them in one pocket so why look in the other. Once he caught me at Trader Joe's shaking a bottle of calcium tablets near my ear telling the man behind the counter, “They don't sound small.” And that confirmed all his suspicions that I was insane. And when I ask him for help with the crossword and he doesn't know the answer I get furious and call him a dummy.

Trader Joe’s, a national chain of specialty grocery stores that’s huge here in California where I live, started carrying frozen edamame not too long ago and now reports that they sell better than frozen corn. Edamame

When people ask what I do, I say: “I’m a teacher.” or: “I proofread legal documents.” or: “I hand out jalapeño humus dip at Trader Joe’s.” I say, to myself, mostly: “I’m alive, motherfucker. What else do you want?"

Sam’s Club, Trader Joe’s, and other discount stores that sell cheap supplements should not be your source for SAMe. Instead, look at GNC, local natural-food stores, or the Internet. You get what you pay for, and cheap SAMe doesn’t work. If the SAMe you’ve tried in the past wasn’t effective, don’t give up; try a different brand, preferably one recommended by a functional medicine doctor. SAMe is highly unstable and needs to be enteric coated and kept in a moderate-temperature storage facility. To take SAMe, start with 400 mg. on an empty stomach (thirty minutes before or ninety minutes after eating). If you don’t see an improvement in your mental and physical energy, increase your dose by 400 mg. each day—up to 1,200 mg.—until you do. I find it is best to take SAMe all at once, thirty minutes before breakfast. The method allows you to get a substantial morning boost that will often last through the day. You can take SAMe in divided doses if needed, but always on an empty stomach. Don’t take it past 3:00 p.m., as it may interfere with your sleep.

Doug Rauch, former President of Trader Joe’s, views employees and customers as two wings of a bird: you need both of them to fly. They go together—if you take care of your employees, they’ll take care of your customers. When your customers are happier and they enjoy shopping, it also makes your employees’ lives happier, so it’s a virtuous cycle.

Rockets, in general, had come on in leaps and bounds since the market had become competitive in the early twenty-first century. Initially, Spacex and Virgin grabbed the headlines, but when Amazon and Trader Joe’s joined in, the prices plummeted. So

still tried to perform the New York City stereotypes – I wore a black leather jacket, I rarely washed my brown hair, I drank coffee even if I didn’t like the taste, I had a fake ID, and I was perfectly comfortable saying fuck you. But the alien-hot-air rushing from the subway grates could petrify me. The psychic weight of all the people waiting at the stop light at 14th Street could render me unable to move my legs. Grocery shopping at Trader Joe’s was horrifying, and going to the post office overwhelming.

You have a limited time to live, and your dream is to work at Trader Joe’s?

The willingness to do without any given product is one of the cornerstones of Trader Joe’s merchandising philosophy.

Phase I Shopping List For smoothies: 5 red apples 5 small bananas 3 medium oranges 1 bag red or green grapes 5 pears 3 avocados (can use for soups, too) 1 bunch fresh spinach 3 limes 4 (10- or 12-ounce) bags frozen raspberries 2 (10- or 12-ounce) bags frozen blueberries 2 (16-ounce) bags frozen strawberries 1 (16-ounce) bag almonds (can also use for snacking) Ground cinnamon Almonds or 1 (16-ounce) bag almond meal, depending on the strength of your blender Plain or vanilla protein powder (see this page for a complete guide to buying protein powder) 1 (12-ounce) bag ground or whole flaxseeds or chia seeds, depending on the strength of your blender (Some, like the blenders I describe on this page, will be able to grind the seeds themselves. Less powerful machines might require ground seeds.) ½ gallon fat-free, 1 percent, or 2 percent organic milk (or unsweetened nondairy milk of your preference) 1 quart fat-free, 1 percent, or 2 percent plain Greek yogurt (Chobani, Oikos, Fage, Trader Joe’s, Siggi’s, or Icelandic Skyr) For soups: 1 head broccoli 2 medium zucchini 1 pound carrots (can be used for snacking, too) 1 box bouillon cubes (I prefer Knorr’s) Garlic powder Onion powder For snacks: 1 pint fresh blackberries or raspberries 1 small package high-fiber crackers, like Ryvita ½ pound low-fat cheese of your choice 1 (5-or-so-ounce) bag air-popped, low-cal popcorn 1 pound sliced turkey 1 (12-ounce) package frozen or fresh peeled edamame

In the eighties, the fast-food chain Wendy’s effectively asked America, “Where’s the beef?” The implication was that their competitors weren’t using enough meat. So what’s at stake for choosing another brand over Wendy’s? We might get stuck with a wimpy sandwich. Likewise, Whole Foods has built an enormous industry helping customers avoid the consequences of overly processed foods, and more recently Trader Joe’s has come along to help customers avoid the consequences of Whole Foods’ prices. Brands that help customers avoid some kind of negativity in life (and let their customers know what that negativity is) engage customers for the same reason good stories captivate an audience: they define what’s at stake.

So one of the really nice things about my career is that I was never an absentee dad. Workaholic, yes, but not absentee. What price glory? When is enough, enough?

The Victorian sketches that have come to define Trader Joe’s merchandizing were cost control: books published before 1906 were pre-copyright and so free for Joe to repurpose with a funny caption. He spent hours cutting them out himself at his home easel.

Instead of working/studying from home every day, pick two to three days to do it from a café. -          Try and pick a café that’s nearby an upscale shopping area. Take a walk through it after work or on your lunch break. -          Skip out on the lower quality grocery store and try out Whole Foods or Trader Joe’s once or twice a week to get your groceries. -          Instead of reading a book or listening to a podcast from home, go take a walk

If all the facts could be known, idiots could make the decisions.

It is better to be vaguely right than exactly wrong. —Carveth Read If all the facts could be known, idiots could make the decisions. —Tex Thornton, cofounder of Litton Industries, quoted in the Los Angeles Times in the mid-1960s. This is my favorite of all managerial quotes.

drove a truck through it! Within three years, we were the leading retailer of imported wines in California!

We were to wine connoisseurs what that great airline, PSA, was to travelers before the airlines were deregulated in 1981. Like us, PSA’s pricing was based on a close reading of FAA regulations, which in those days set the fare for every air route in the U.S. As long as PSA flew only within California, however, they were free of FAA price regulation. PSA had been one of my heroes, and now I was glad to join it in offering great value to our customers.

As I described in the “Uncorked!” chapter, the economic background in 1970 was turning grim, and sales were weakening. I was concerned. And then, once again, Scientific American came to the rescue. Each September that wonderful magazine devotes its entire issue to a single subject. In September 1970, it was the biosphere, a term I’d never seen before. It was the first time that a major scientific journal had addressed the problem of the environment. Rachel Carson’s Silent Spring, of course, had been serialized in the New Yorker in the late sixties, so the danger to the biosphere wasn’t exactly news, but it could be considered alarmist news. The prestige of Scientific American, however, carried weight. In fact, it knocked me out. I Suffered a Conversion on the Road to Damascus Within weeks, I subscribed to The Whole Earth Catalog, all the Rodale publications like Organic Gardening and Farming, Mother Earth, and a bunch I no longer remember. I was especially impressed by Francis Moore Lappé’s book Diet for a Small Planet. I joined the board of Pasadena Planned Parenthood, where I served for six years. Paul Ehrlich surfaced with his dismal, and proved utterly wrong, predictions. But hey! This guy was from Stanford! You had to believe him! And in 1972 all this was given statistical veracity by Jay Forrester of MIT, in the Club of Rome forecasts, which proved to be even further off the mark. But I bought them at the time. Bob Hanson, the manager of the new Trader Joe’s in Santa Ana, which was off to a slow start, was a health food nut. He kept bugging me to try “health foods.” After I’d read Scientific American, I was on board! Just how eating health foods would save the biosphere was never clear in my mind, or, in my opinion, in the mind of anyone else, except the 100 percent Luddites who wanted to return to some lifestyle approximating the Stone Age. After all, the motto of the Whole Earth Catalog was “access to tools,” hardly Luddite.

Let’s define health foods as foods grown with as few chemicals as possible, processed with as few chemicals as possible, and packaged as “ecologically” as possible. There was a notion that eating health foods, called “inner ecology” (inner to one’s body), would somehow help the “outer ecology” (outer to one’s body) of the biosphere. Some Bailey’s Irish Cream on Your Granola? We prepared to marry the health food store to the liquor store. This concept, obviously, was founded in schizophrenia. But it occurred to me that people who really thought about what they ingested, whether they were wine connoisseurs or health food nuts, were basically on the same radar beam. Both groups were fragmented from the masses who willingly consumed Folgers coffee, Best Foods Mayonnaise, Wonder Bread, Coca-Cola, etc. Both groups were the kind of people who, I was hoping, represented a breakup of mainstream consumption in America.

The ideal location I found for the first Trader Joe’s was a 1911 bottled water plant on Arroyo Parkway in Pasadena. My real estate broker—and a de facto member of Trader Joe’s top management—had one hell of a time negotiating the lease with an obdurate lawyer, Patrick James Kirby. Kirby was so tough that later Alice said if she ever got a divorce, she was going to hire Kirby. He liked that.