September 25, 2008

‘Affordable Luxury’ / Trader Joe’s Carries Unique Products That It Says Won’t Break the Bank

Trader Joe's doesn't have fancy fixtures or gourmet meals made to order. It doesn't tout designer cheeses or sell gas. And its most popular wine is not from vineyards outside Paris or Florence. Nicknamed "Two Buck Chuck," the wine sells for as low as $1.99. (In its Virginia stores, though, it sells for $3.29.)

"We're just a neighborhood grocery store," said Kevin Risser, manager of the Trader Joe's at the Short Pump Station shopping center on West Broad Street in Henrico County.

The 12,400-square-foot store is scheduled to open Friday. The chain is opening a store in Williamsburg on the same day.

The California-based retailer has opened 310 grocery stores across the country since opening its first location in 1958. Along the way, it has branded itself as an alternative to standard grocery stores.

"They don't want to be your routine grocery store where you go to get toilet paper," said Roland T. Rust, chairman of the marketing department at the University of Maryland's Robert H. Smith School of Business.

Instead, Trader Joe's, he said, has found its niche by offering gourmet products at reasonable prices. The company has made its reputation by offering customers interesting products they won't find elsewhere.

They offer "affordable luxury," he said.

Trader Joe's said what makes it different is that the chain stocks food and beverages that range from the basic to the exotic at what it says are affordable prices.

The selection and prices come because it primarily sells private- label items it buys directly from producers, as opposed to buying brand-name merchandise from distributors.

Among its products: a six-pack of the traditional petite French pastries, Canneles de Bordeaux, selling for $4.99; and a package of Fornario Potato Gnocchi for $1.99.

Trader Joe's also carries dark chocolate-covered espresso beans, organic heirloom tomatoes and dark chocolate-covered chile spiced dried mango.

It sells dozens of types of coffees, ranging from smooth Colombian blends to handpicked coffees from Nicaragua.

Trader Joe's stores, including the one in Short Pump, carry roughly 3,000 items. The average U.S. supermarket carries 45,000 items, according to the Arlington-based Food Marketing Institute.

Of Trader Joe's items, 80 percent are private label, Risser said.

Trader Joe's private-label products are all natural with no preservatives or additives, he said.

Jeff Metzger, publisher of Food World, a publication that follows the grocery industry in the mid-Atlantic, said Trader Joe's success is mostly a result of its private-label merchandise.

While most grocers have their own private-label brands, the ones at Trader Joe's are different.

"What sets them apart is that the private-label items they carry are very, very unique," Metzger said.

A good example, he said, is its "Two Buck Chuck" wine. Its official name is Charles Shaw Wines.

You can "go out and get a good wine to serve with dinner and only pay about $2," Metzger said. Virginians, however, pay a little more - $3.29 a bottle - because of taxes and increased shipping costs.

"They have a formula for success," he said.

It's hard to quantify just how successful Trader Joe's is because the chain is a private company.

But Supermarket News, an industry publication, estimated that Trader Joe's generated $6.5 billion in sales in 2007. The publication ranked the chain the 23rd-largest grocery retailer.

Part of Trader Joe's formula is its quirkiness. Employees in brightly colored Hawaiian shirts are called crewmembers and assistant managers are first mates, in keeping with the nautical theme first used in its stores in the 1950s.

The store manager is the commander. And the 6-foot-plus Risser, wearing shorts and Vans and sporting a shaved head and goatee, seems more like a guy hanging out at a skateboard park than a store manager.

Store walls are covered with murals depicting local scenes - the Short Pump store has murals of the Virginia Capitol, Richmond's skyline and Short Pump when it was farmland.

Metzger said that, overall, customers enjoy shopping a Trader Joe's. Beyond the food and prices, he said, stores are small and easy to get in and out of.

Trader Joe's has 12,400 square feet of space. The average grocery store in the U.S. is 47,500 square feet, according to the Food Marketing Institute.

But for all its differences, Trader Joe's is stepping into a competitive marketplace in western Henrico.

The Kroger Co., Ukrop's Super Markets, Tom Leonard's Farmer's Market and Wal-Mart Stores Inc. all have locations within a half- mile. And Whole Foods Market entered the market this month with a store in the adjacent shopping center.

Kirsten Rowe, who lives in western Henrico, considers herself a fan of Trader Joe's, but her experience has pretty much been limited to stores in Los Angeles, where her in-laws live.

Rowe said she likes Trader Joe's selection, particularly its all- natural snacks and produce. She said she is looking forward to having a store nearby.

"How much is it going to replace my standard shopping? I'm not sure," she said, adding that she'd already warned her husband that "the grocery bill is going up."

Popular items

Some of Trader Joe's most popular private-label merchandise:

- Charles Shaw Wines (aka "Two Buck Chuck")

- Frozen mandarin orange chicken

- Antioxidants trek mix

- Extra virgin olive oil

- Dark chocolate-covered espresso beans

- Trader Giotto's Pizza 4 Formaggi (Handmade Four Cheese Pizza)

SOURCE: Trader Joe's

Trader Joe's

Founded: in 1958 as Pronto Markets

First Trader Joe's: in 1967 in Pasadena, Calif.

Stores: 310 in 23 states

Virginia stores: 10, including two opening Friday

Sales: estimated $6.5 billion in 2007

Products: about 3,000 per store

SOURCES: Trader Joe's and Supermarket News

Contact Louis Llovio at (804) 649-6348 or [email protected]


Originally published by LLOVIO; Times-Dispatch Staff Writer.

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