![]() ![]() ![]() He wanted higher quality workers and also wanted to avoid unionization. How did Trader Joe’s pay such high wages? Coulombe is quick to admit that altruism had little to do with the policy. Assuming an average of 2,000 hours per year, this worked out to about $3.50 per hour, a very high figure for a time when the minimum wage in California was $1.65 per hour. This figure was around $7,000 in the early days of the business. Joe Coulombe’s goal was for the average full-time employee of Trader Joe’s to earn the median family income for California. What are some of the key elements that Joe Coulombe leveraged to build Trader Joe’s? Here are five elements that I think made the most impact: The chain is known for its unusually generous pay and employees seem uniformly happy. Everyone, including management, takes turns at the checkout counters, stocking products, and interacting with customers. Store managers are “captains”, assistant managers are “first mates”, and everyone else is a “crew member”. The vibe of Trader Joe’s is nautical in nature. Still, it has what can only be described as a cult following. Trader Joe’s is certainly not similar to a full line conventional grocery store such as Safeway since it has a very limited number of SKUs. It is not a true competitor to higher end grocery stores such as Whole Foods Markets which has a much wider assortment of fresh produce along with a more extensive meat and seafood department. ![]() It is not really a “health food” store despite the fact that many products can be used as building blocks for a healthy diet. Trader Joe’s is difficult to describe to those who have never been in one of its stores. Founded in Pasadena, California in 1967, the chain expanded into Northern California in the 1980s and has since expanded to 42 states as well as the District of Columbia. Founder Joe Coulombe’s longstanding policy was to locate stores in areas with a high concentration of well-educated but price conscious customers. The presence of a Trader Joe’s location near my home at the time in the Silicon Valley was no accident. This was a perfect combination for a young person just starting out who didn’t have a lot of money to spare and had no clue when it came to cooking. What initially attracted me to the chain after I graduated from college was the huge selection of frozen and prepared foods, all available at a reasonable price. I have been a customer of Trader Joe’s for nearly three decades. “This happens all the time! No big deal!” Suffice it to say that the corporate ethos of Trader Joe’s is not the unfriendly “you break it, you buy it” attitude that prevails in so many retail establishments. No more than a few seconds later, a Trader Joe’s “crew member” appeared with a broom, mop, and words of reassurance. The man with the shopping cart muttered something but moved on, leaving the young woman mortified by the mess. She lost her grip on the bottle and it went crashing down to the floor below, shattering into dozens of pieces and spilling dark red wine all over the floor. I was shopping at Trader Joe’s on an unusually crowded afternoon and an elderly man with a large shopping cart bumped into a young woman who was browsing the store’s large wine selection. It was a couple of days before Christmas. I regret not having had the guts to ride out the loss of the surtax exemptions, the employee ownership problems, the threat of death taxes, Carter’s threat to eliminate capital gains preference, and all the other fears, real or phantom, of late 1978.” To mine own self I was not true when I sold. ![]()
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