Inside Trader Joe’s Top Secret Business Practices

Published on Monday, August 23, 2010, by Roxanne Webber / Edit Post

Who makes the food for Trader Joe's is a big topic of Internet conjecture, but there are a lot of other mysteries surrounding the company because it is notoriously secretive and doesn't do much press. Have you ever seen a big business feature written on Trader Joe's? Not with the company's participation, notes Fortune reporter Beth Kowitt in her article "Inside the Secret World of Trader Joe's," where she writes that "it has never participated in a major story about its business operations." But Kowitt went digging, and her story is the culmination of two months of "speaking with former executives, competitors, industry analysts, and suppliers." Unsurprisingly, Trader Joe's declined her requests for an interview.

Some of the dirt:

• The chain is actually owned by a German family named the Albrechts who also own the Aldi Nord supermarkets in Germany. They are notorious for not talking to the press in Germany, and Kowitt says they have "passed their tightlipped ways on to their U.S. business."
• The stores sell an estimated $1,750 in product per square foot, double what Whole Foods makes. • The people who do make the food for TJ's have to sign an agreement "which states, 'Vendor shall not publicize its business relationship with TJ's in any manner,'" according to a copy of the agreement Kowitt says Fortune obtained.
• The reason the staff is so nice? They aren't scraping by. "Full-time crew members can start in the $40,000 to $60,000 range ... on top of the pay, Trader Joe's annually contributes 15.4% of employees' gross income to tax-deferred retirement accounts."

It's worth a read while raiding a bag of those peanut-butter-filled pretzel nuggets and drinking a can of Simpler Times lager.

Image source: Flickr member Joe+Jeanette Archie under Creative Commons

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  • It is not such a great secret that TJ was owned by a German grocery chain. So what. Great food. Good prices. and they treat their employees fairly. Wow. What would you complain about?

  • It's always easier to find out where pig ears for my dog come from than to find out where those peanuts in your peanut butter came from. Oh wait, they come from the far away land of "Distributed by..."

  • At the Silverlake (Los Angeles, CA) store I always saw the same employees. At the Alexandria, VA location I see the same employees and at the Washington, DC location (Foggy Bottom neighborhood) I always see the same employees. Three different stores in three different locations. I never see, or saw high turnover in the 3 years I lived in LA and shopped at their Silverlake store or the 6 years...+READ

    At the Silverlake (Los Angeles, CA) store I always saw the same employees. At the Alexandria, VA location I see the same employees and at the Washington, DC location (Foggy Bottom neighborhood) I always see the same employees. Three different stores in three different locations. I never see, or saw high turnover in the 3 years I lived in LA and shopped at their Silverlake store or the 6 years I've been living in Washington, DC and visiting both their DC store and Alexandria, VA location.

    Again, there is something really strange about this attack against TJ's so what if they are secretive. Most successful companies are. Why would anyone who is succesful want to give away their ideas and secrets?

    Reread some of the posts by those who claimed they worked at TJ's. One person claims it was a nightmare and that the captain and first mate were abusive? So much so that the staff were "debilitated" by their "Nazi" training style? Yet they worked for TJ's for 6 years? If the management was truly that dispicable they would have been slapped with many lawsuits. And why would someone (ex-tj employee) who claims to be intelligent and care about living a healthy lifestyle work for so little money while being abused? Why if making cryptic messages about their secretiveness not sign your message in your full real name instead of a silly moniker?

    If someone works for an abusive company. And this company doesn't implement raises and/or promotions according to the book, or the management creates a hostile work environment and they don't for example pay overtime but make staff work over time - there's this thing called the US Department of Labor. There are also these people called "lawyers" and if they even get a whiff of class action will take on the case without money up front. There are also very strict laws which protect the identity and rights of whistleblowers.

    The fact that these people alleged to have worked for TJ's for years in fear and don i't sign with their real name is suspect imo.-COLLAPSE

  • There isn't anything "suspicious" about TJ's food or how it's labled. I rarely ever cannot find country of origin listed on any products. My family finds their products to be much better quality than Whole Foods and their prices and customer service are also kinder imho.

    Seasoned rack of Lamb - New Zealand.
    Boneless leg of lamb - New Zealand
    Filet MIgnon - USA
    Chicken breast - USA
    Wild...+READ

    There isn't anything "suspicious" about TJ's food or how it's labled. I rarely ever cannot find country of origin listed on any products. My family finds their products to be much better quality than Whole Foods and their prices and customer service are also kinder imho.

    Seasoned rack of Lamb - New Zealand.
    Boneless leg of lamb - New Zealand
    Filet MIgnon - USA
    Chicken breast - USA
    Wild caught Tilipia - Thailand
    Sorrento mixed greens - USA
    Desert honey - USA
    Variety of artisan pizzas all from Italy.
    Raspberry tart - product of France.
    Olive oil from Greece.
    Smoked sardines from Portugal.
    Shrimp gyoza, pork gyoza and vegetable gyoza - all products of Thailand.
    Canola oil product of Canada.
    Farfalle, spaghetti and fusilli pasta all from Italy.
    Couscous from Morocco.
    Smoked herring in canola oil and lemon juice - Germany.
    Coffee filters - product of USA.
    Orange juice - product of USA.
    Lemonade (frozen) - product of USA
    White basalmic vinegar - Italy.
    Niman Ranch bacon - USA.
    Fage yogurt - Greece
    Dried apricots - Turkey
    Dried hibiscus flowers - Thailand
    Tamari roasted almonds - ? (distributed by TJs Monrovia, CA)
    100% pure maple syrup - Quebec, Canada.
    Puffins Cereal - USA
    Aoili mustard - ? (Distributed by TJ's Monrovia, CA)
    French Roast Coffee- Blend of south and central American beans roasted in California, USA.
    Capers - ? (distributed by TJ's Needham, MA)
    Tempura chicken - ? (distributed by TJ's Monrovia, CA)
    Soft Lady Fingers - France
    Wild blueberry tart - France
    Haricot vert - France
    Spirulina capsules - California grown and US manufactured
    All beer and wine we have are clearly marked

    Btw isn't it the US law that food products must be labled with country of origin only if they are NOT from the US?

    I think "cookitup" is trying to stir it up. People see conspiracy where there isn't anything. I don't know why some are targeting TJ's. I mean what do you know about the owners of Albertson's/Acme, ShopRite, Wholefoods (Mackey is an egomaniac and WF's is being sued by California for selling natural bodycare and household cleaning products which all contained a known cancer-causing agent), Safeway, Giant (Dutch), Wegman's or Gelson's? Is it because TJ's owners are German? So what.-COLLAPSE

  • Having worked at the Joe for 6 years, one can become very disillusioned with the disneyland illusion, aren't we SOOO great, well not exactly. Many of the products do not identify the country where the food was created, very suspicious. Foolish people believe the hype & defend the joe, if it taste good & it's CHEAPER, it can't be bad, can it. I worked in the demo where they pass out samples,...+READ

    Having worked at the Joe for 6 years, one can become very disillusioned with the disneyland illusion, aren't we SOOO great, well not exactly. Many of the products do not identify the country where the food was created, very suspicious. Foolish people believe the hype & defend the joe, if it taste good & it's CHEAPER, it can't be bad, can it. I worked in the demo where they pass out samples, hoping you'll
    like the taste & just put it in your cart for dinner, oh don't read the list of ingredients, you'll faint.

    If you are lucky enough to have a good captain & first mate at your store, you're lucky, but don't hold your breath for that to happen, in my 6 yrs. we never were treated with respect or kindness. Only a very few were given their raises, the favorites & they had to kiss a lot of you know what for that to happen, it's very demeaning to be treated like slaves.

    It is no surprise it's owned by germans, they treated us like they were trained by hitler. They have a lot of turnover because most can't take the emotional abuse, it has taken me a LONG time to get over my time there, I finally feel rested & now I can heal.

    The real lesson from this experience, we get what we settle for, I gave up selling my soul for a few dollars.

    I know in my soul what a job means -- just over broke


    Very few earn a salary a person can live on. If you only knew of the wild party's they have on the money you spent buying their marginal food, oh it's only for the elite, the full timers, gods that they are.
    They must make the food taste good, if not you, would not buy it, same thing goes for McDonalds, Taco bell, & the rest of the franken foods out there.

    If it's in a package folks, what keeps it from rotting, preservatives !!!

    Save your health, they don't care if you are well.

    Go to the farmers market, meet great people who love what they do.

    If you get to know the people who work at the joe, it's a pretty sad thing.

    Finally I can tell the truth & not be afraid of THEM. They can never attempt to break my spirit again.

    I joined this site just so I could finally, tell the rest of the story.



    Somethings are true, whether you believe them or not.
    the movie City of Angels-COLLAPSE

  • I know one of the companies that made Trader Guiseppe's pasta sauces for a while, because I would see the pallets of labeled jars on their way to the trucks. Apparently that contract ended, however. I don't know why, because the sauce company (under its own label) has gone on to do extremely well.

  • To be clear, Full time at TJ means management (anyone wearing a hawaiian shirt), working 48 hour weeks (they take overtime into account when stating annual salaries). Part-time employees are all the employees in t-shirts, non management, and can work up to 40 hours per week. Starting salary for Part-time employees varies but is typically $10/hr and maxes out at $20. The benefits are very good...+READ

    To be clear, Full time at TJ means management (anyone wearing a hawaiian shirt), working 48 hour weeks (they take overtime into account when stating annual salaries). Part-time employees are all the employees in t-shirts, non management, and can work up to 40 hours per week. Starting salary for Part-time employees varies but is typically $10/hr and maxes out at $20. The benefits are very good including medical, dental, and vision for $50/mo. It's not as good as the Fortune article implies, due to the use of the term "Full-time employee", however it's the best paying grocery store job one is likely to find.-COLLAPSE

  • "Some of the dirt:"

    • The chain is actually owned by a German family named the Albrechts who also own the Aldi Nord supermarkets in Germany.

    Why is being owned by Germans dirty?

  • TJ's is actually a liquor store that sells "health" food and "health" products so people can feel good about going there to stock up on their bulk booze. What kind of "healthy" lifestyle store devotes so much floor space to hard liquor as TJ?. However, finding a grocery chain that has bucked the unions is not all that bad even though they jacked up the prices in their own stores while shoppers...+READ

    TJ's is actually a liquor store that sells "health" food and "health" products so people can feel good about going there to stock up on their bulk booze. What kind of "healthy" lifestyle store devotes so much floor space to hard liquor as TJ?. However, finding a grocery chain that has bucked the unions is not all that bad even though they jacked up the prices in their own stores while shoppers piously avoided the picket lines at the main line chains a while back.-COLLAPSE

  • I think it has its niche.. No its definitely not Whole Foods. But I love it.. I do 60 % of my shopping there.. and I LOVE to cook.. they have things like their carnitas that for a busy working gal like me I take and then carmelize in OJ and add fresh peppers etc. And no you dont have to buy the nasty two buck chuck.. or is is three bucks now? But I do know people that have been laid off that...+READ

    I think it has its niche.. No its definitely not Whole Foods. But I love it.. I do 60 % of my shopping there.. and I LOVE to cook.. they have things like their carnitas that for a busy working gal like me I take and then carmelize in OJ and add fresh peppers etc. And no you dont have to buy the nasty two buck chuck.. or is is three bucks now? But I do know people that have been laid off that think it fits their budget and isnt too bad.. Thank goodness they dont have a butcher! then Id have to pay Whole Foods prices..-COLLAPSE

  • I'm with you, rehab—I never got the appeal of the place either. It always struck me as neither/nor—not quite gourmet, but pricier, with a smaller range of inventory, than a regular store.

  • Is that wholesale or retail, per week, per month or per year?

  • I've never seen the appeal. Three-buck Chuck is bad wine, a loss leader that pressured better wineries to offer similar crappy product that can only be made from the cheapest fruit. Everything at TJs is shrink-wrapped and processed, there aren't many fresh or raw ingredients, there's no butcher. The selection is idiosyncratic, inconsistent and nowhere near comprehensive; why anybody would compare...+READ

    I've never seen the appeal. Three-buck Chuck is bad wine, a loss leader that pressured better wineries to offer similar crappy product that can only be made from the cheapest fruit. Everything at TJs is shrink-wrapped and processed, there aren't many fresh or raw ingredients, there's no butcher. The selection is idiosyncratic, inconsistent and nowhere near comprehensive; why anybody would compare TJs to Whole Foods (or any other real grocery store) is beyond me. This has never been a store for people who cook; it's a store for people who throw cocktail parties and need unusual dried snacks to pour into bowls. I do, however, like their peanut butter.-COLLAPSE

  • mrbigshot, I think they move them around to different locations as part of training. And check out jobvent.com; there aren't too many TJ employees griping (for contrast, look at Radio Shack, Sears, Walmart or any of the large insurance companies)

  • Secretive business practices is something started by the Albrecht organization after they bought TJ's from the original owner, Joe Coulombe. He was innovative, took a lot of risks that paid off and he was never secretive about the way he operated the business.

  • A friend who works there says they DOUBLE the manager's salary for the year if the store comes in a certain percentage over the budgeted revenue????

  • I have found the frozen foods much superior to your local supermarket.....many produced overseas

  • Tj's food is horrible. Not surprising since most American's don't know what good food is...and it's not the frozen processed crap sitting in trader joe's expansive freezer section.

  • Not mentioned is the other important TJ practice - location, location, HIGH DISPOSABLE INCOME DEMOGRAPHIC location. Their price increases in the last five years have far exceeded inflation, but the above demographic doesn't care.

  • Ok tthe deal for TJ's employees. Starting rate is $10 an hour, takes ~ 5 years to get top pay rate $25/hr! A 10-yr veteran PT, but 40-hr/wk, employee is making ~$55 k/year. He used to be a manager, required to work at least 50 hr/mo, but more like 55 - 60 hrs, he was earning $80 - $85 k/yr. He tells me his current manager is making $100+/yr "for sure - likely more". Not bad! Plus they have TJ's...+READ

    Ok tthe deal for TJ's employees. Starting rate is $10 an hour, takes ~ 5 years to get top pay rate $25/hr! A 10-yr veteran PT, but 40-hr/wk, employee is making ~$55 k/year. He used to be a manager, required to work at least 50 hr/mo, but more like 55 - 60 hrs, he was earning $80 - $85 k/yr. He tells me his current manager is making $100+/yr "for sure - likely more". Not bad! Plus they have TJ's benefits which he says are good for comparable jobs, $20 co-pays, practically free prescriptions, 15%of pay contribution - no match, just f ree money! Plus 10% discounts on purchases - better than a poke in the eye!
    Not a bad job if you don't mind sticking around for 5 yrs or so and working a lot, all times of day and night, no regular schedule to count on and working weekend and holidays...-COLLAPSE

  • All I know is that TJ's has the best value proposition of all the grocery chains around: great-tasting food at reasonable prices.

  • I'm not buying that 40/60k stuff. I use TJ's about 2-3 times a year when I visit a city far from mine. I never notice the same employees that I saw 6 monts earlier, and I notice stuff like that. You don't get that kind of turn around with that kind of wage.

  • If it on wikipedia, it must be true. :)

  • Reading the article, you're basically getting the same "private label" stuff that other stores get, but only cheaper?

  • $40-$60K/year for a full time TJ's employee? I find it hard to believe the regular full time employee is earning well over $20/hour.

  • I knew Trader Joe's was part of the Aldi's family , so that's not a secret.

  • I asked about salary at my local TJ and I was told slightly more than minimum wage. How many hours per week for those wages of $40,000 to $60,000???

  • That said, it's an interesting article. Or maybe I just like it because it confirms my own speculation about how their business model works.

  • I'm not sure any of that is "dirt" -- dirt implies that the secrets are unsavory, not just that they're secretive. And the fact that it's owned by the Albrechts isn't much of a secret. That and the salary info can be found -- among other places -- in the wikipedia entry on TJ's.