Do You Know Who Owns Trader Joe's?

Do you shop at Trader Joe’s?

From what I have seen, the world is divided into three sets of people.

1. Those who have never been to a Trader Joe’s, and perhaps have never heard of it.

2. Those who love Trader Joe’s more than they love their own families.

3. Those who love Trader Joe’s more than they love their own families and are incensed that there isn’t one nearby.

So, let me ask those of you who fall into categories 2 and 3: Who owns Trader Joe’s?

1. Some great California family full of surfers and gardeners.

2. A small band of communal farmers in Oregon.

3. A huge German discount-grocery chain best known in the U.S. for no-glamor stores often located in marginal neighborhoods.

Yeah, it’s No. 3. The company is called Aldi and, though I’d seen one or two of its stores in the past, I didn’t even know it was a grocery store. Then I read this very interesting Wall Street Journal piece about the company’s ambitious new plan for the U.S., which calls for 75 new stores this year. The article claims that Aldi is so good at selling cheap goods that WalMart couldn’t compete with it in Germany. How do they do it? Here’s one way:

Store-brand goods generally make up 22 percent of U.S. food sales in terms of unit volume, according to research by Nielsen Co., while in some European markets, they account for about 30 percent. At Aldi, 95 percent of the goods are the retailer’s own brands.

They are, in other words, not the obvious owner of a chain like Trader Joe’s — which, although it tries to be ruthlessly cheap, also has a very high style quotient and neighborhood grocery store vibe.

I thought of all this when I ran into a friend who used to work at a Trader Joe’s. I asked her if she knew who owned the chain. She said no, then thought about it, and suddenly remembered: “Oh yeah, some Germans!”

She knew this only because some Aldi executives came to look at her store a few times, and as she recalls it, her management asked all the employees to not speak to the Aldi executives. It was unclear why this was necessary.

Then she remembered something else: “The carts we used to wheel boxes up and down the aisles, we called them U-boats, because they were shaped like a U. We were told to definitely not call them U-boats whenever the Germans were visiting.”


j. Ringomon

#3- ALDI!

j. Ringomon

Sorry, posted my first comment before making the jump- I thought it was a real quiz!

It makes sense if you think about it though, because Trader Joe's is heavily stocked with their own store-bands as well.

ALDI and TJ's are basically the exact same concept, just aimed at different demographics.

nancy

Yu do know , too, that Aldi headquarters is right next to Fermilab, right.

I feel the particles accelerating.

Brian Kirk

I fall into category 3 & wish a Trader Joe's would open here in Austin. Sure I love Central Market & Whole Foods, but Trader Joe's (based off my experience in La Jolla last year) beats them both hands down on price & quality.

Syruss

On the topic of Trader Joe's, there is a fourth set of people.

Those who have shopped at Trader Joe's and were disappointed with the (lack of) quality and selection, not to mention five minutes from expiring, or already expired and rotten food...

DB

How are they not the obvious owner of Trader Joe's, which must be at least 95% store-label brands? Yes, maybe they cater to higher-income consumers, but the supply strategy is nearly identical.

Brendan

Great post. I love when you expose like this. I shopped at Traders before and felt the cult-love some had for it. In the "buy-American" spirit of the stimulus, I say go to Wegmans if you are looking for the true cult food-shopping experience.

econobiker

The Nashville metro region just got a Trader Joes- in the swanky part of town -Green Hills.
For the media hysteria, you would have thought Mose's had arrived to demonstrate parting water in a hot tub...

I also like Aldi and did not know that Trader Joes was similar concept for the la-te-da set who deem themselves never to set foot in a Walmart or even know that Kmart still exists...

Noah

But what about Trader JOHN's?

http://tinyurl.com/daojhp

J.V.

Oh my. Mr Dubner, have you never met anyone from a city with a Central Market? (http://www.centralmarket.com/). Could you add a category #4? "People who go to Trader Joe's and think, Who buys this low-quality junk?" Central Market has more brands of chocolate than Trader Joe's has items. And don't even get me started about Spec's (http://specsonline.com).

Rob

Our nearest Trader Joe's is about 7 miles away, while our nearest Aldi is about a mile and a half away. Yet I wouldn't so much as touch Aldi with a stick.

I mean, maybe if I wanted the $59 27" TV with my off-brand doesn't-taste-like-chocolate chocolate, I would go to Aldi. If I had a quarter to spare to get my grocery cart out of the pile, I would go to Aldi. If I had a sudden need to hoist my TV onto a giant stack of floor mats, I would go to Aldi.

Thus, I come to the question... what was someone in Germany smoking when Aldi decided to buy out Trader Joe's?

jblog

Trader Joe's is kind of the Old Navy of food.

DK1

Count me in category #3. I don't care if they're owned by Bernie Madoff, I just need a Trader Joe's closer to my house! I feel environmentally guilty by driving 20 miles just to go grocery shopping, but I'm addicted.

Vince Offer

You know the Germans always make good stuff.

Caliphilosopher

#6 - Is that a Sham-Wow joke? If so, that's hilarious. :-)

Tyler

The story about Aldi is interesting in itself. They are in fact in Germany two different and independent corporate entities, Aldi south and Aldi north, which were founded by two brothers. Karl Albrecht und Theo Albrecht (Aldi = Albrecht Discount) are now in their eighties and the two richest germans.

There is no photographs and very few other facts available about them. Mirroring this, the financials of the two companies can only be guessed (around 20 Billion Euros for each) as they are completely in private ownership and dont release figures.

Nina

Brendan, look at the packaging and find out a lot of stuff is produced in the US. Haven't you realized in today's market just because something is foreign owned it can still supply americans with jobs. On the other hand you can buy an american brand car which is entirely build in a different country...

Raj Pandravada

The closest Trader Joe's to me is about 15 miles away. I'm definitely mad that there isn't one closer.

That said, my weekly or bi-weekly shopping trip seems more like a pilgrimage, since there is always one or more T-Joe's virgin tagging along, their eyes shining with the prospect of butter almond thins and hard toffee encrusted with pistachios.

Anyway, hope at least one of the 75 new stores planned by 'ze Germans' is closer to me...

Tyler

Addendum:
Tader's Joe is owned by a family trust of Theo Albrecht (Aldi North). But the over thousand regular Aldi stores in the USA belong to his brother Karl (Aldi South).

So Aldi and Trader's Joe have no legal ties in the US and are two competing chains in the US.

cya

I loved trader joe's in santa monica-- wondering why in the world we don't have one in Houston. Just 'rip-off' Whole Foods. TJ's is the way a market should be.... truly great value and excellent product.