Tricks of the Trader
By Steve Powers

(Business 2.0) – Joe Coulombe was sunning himself on a beach in the Caribbean when he cooked up the idea for a tropical-themed supermarket called Trader Joe's. Or so the story goes. As with so many things surrounding the chain--which sells gourmet grub at bargain prices--it's tough to get the facts. Len Lewis's new book, The Trader Joe's Adventure (Dearborn, Sept. 1 release), attempts to uncover the secrets of the 235-store retailer, which, since it was acquired in 1979 by European grocery behemoth Aldi, has kept its strategy and financials under wraps. (Analysts put annual sales at about $2.6 billion.) Though the book is still too arm's-length, it's packed with mind-blowing data. Each Trader Joe's store is about a sixth the size of a typical supermarket but sells more than twice as much, nearly $1,300 per square foot. Even more impressive is the simplicity of Trader Joe's business model. It encourages frequent visits by introducing 20 to 25 new products weekly. About 80 percent are private labels, and the chain cuts prices on the rest by buying directly from suppliers. That was the case with its Two-Buck Chuck (a.k.a. Charles Shaw) wine, which sold 1 million cases a week at its peak to become the fastest-growing wine label in history. That, at least, is no tall tale. -- STEVE POWERS