Coveted corporations: Trader Joe’s

traderjoes.com

First store: Pasadena, Calif., in 1967

Company home: Monrovia, Calif.

Total stores: 354 in 25 states; five more announced for 2011

Closest store to Dallas: Des Peres, Mo., (Saint Louis area) 637 miles

What’s the big deal?: Customers love Trader Joe’s Hawaiian shirts and high customer service standards, but the grocer is most famous for stocking its shelves with gourmet food at reasonable prices. Its stores are relatively small — comparable to the size of its parent company, Aldi — and instead of selling 40 different peanut butters, Trader Joe’s might sell 10 varieties. The overall philosophy is that customers really don’t want that many choices, and the inherent message is that these four peanut butters are the best four on the market. This was pointed out in September Fortune magazine article, which also revealed that the company’s largest research and development expense is sending its buyers all over the globe finding the best products. Once identified, Trader Joe’s enters into a vendor contract that involves guaranteed sales at a high volume in return for the vendor remaining mum on the agreement. For example, if Trader Joe’s determined that Blue Bell was indeed the best ice cream in the country, it would arrange an agreement to buy the ice cream in bulk, add its own label to the cartons, and sell the ice cream at a discount in its stores. Trader Joe’s wins because customers love the stuff (if they don’t, it comes off the shelves), and Blue Bell wins because it receives a substantial guaranteed paycheck and can still sell its half gallons for $6 at Kroger — even though they sell at Trader Joe’s for only $3.

From the horse’s mouth: “Right now, Dallas is not in our two-year plan. We don’t give out specifics of what we look for in sites.” — Alison Mochizuki, Trader Joe’s spokeswoman

Expert opinion: “There’s a reason why they’re not here right now, and there’s a reason you don’t see grocery store expansion as a whole like it was. Everyone is trying to retool and refigure.” —Kent Arnold

“It’s really a Sprouts on steroids. They’re active on the West Coast and kind of skipped over Texas when they made a move to do expansion on the East Coast. We hear rumblings and rumors all the time, but as of now it’s really just that — rumor.” —David Shelton

“They’ll get here. It’s just about when they get here. One of the things that might have slowed them down is that wine is a heavy component of their store, and the wet-dry issue is always confusing to retailers who aren’t from Dallas. The biggest thing [keeping them away] is other major markets they’ve been trying to break into that they’ve prioritized. … The more sophisticated office worker demographic is their primary demographic, and we’re a services-based economy, [so] Dallas is their core customer. They keep on saying it’s about three years out. … We would probably see one in Oak Lawn or Uptown. They would try to find a way to get into Park Cities/Preston Hollow, do something to service Greenville and Lovers area, something that hits East Dallas, White Rock and M Streets, also Far North Dallas north of LBJ, and Plano.” —Mike Geisler

“Gosh, if Trader Joe’s was here, they’d just knock ’em dead. It’s a huge investment because they’re not going to do one store [due to] logistics and operations, a lot of issues that are heavy duty. They also have to worry about their competition. Dallas has some pretty good grocery operators.” —Robert Young


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