Monday, November 25, 2013

Stuck in line at Trader Joe's? This guy wrote a charming essay about it...

In the produce section of Trader Joe’s store in the Chelsea section of New York, Karl Holman holds an eight-foot-tall sign that reads “End of Line.” It’s six o’clock on a Tuesday, and Holman is managing the line for the second time this shift. While customers test peaches for ripeness, Holman holds the towering metal pole aloft, making the banner’s orange and yellow lettering visible to anyone who gazes up from the shelves. For the next hour, the line’s end moved constantly.

Short and stout, with a salt-and-pepper goatee and a grey Trader Joe’s T-shirt, the forty-nine-year-old Holman addresses a knot of stopped customers who are blocking traffic. “Are you ready to check out?” he asks. “Step right here.” Customers glance at his sign and then file into place.

As the line forms in front of him, he takes tiny backwards steps to keep pace with its telescoping end. His moving target keeps him in motion, and he marks it with the dedicated poise of a Beefeater at Buckingham Palace. 

Starting by the tubs of cut pineapple, he inches deeper into the produce area, backing past the baby carrots and fresh herbs, past the clear bags of salad greens, and, while smiling and greeting passersby with a “Hi, how are you?” he hooks around a freestanding rack of fruit before stopping near the entrance. In a few minutes' time he has traveled so far back that, without meaning to be metaphysical, he has transcended the proverbial end of the line and arrived at the beginning.

To read the rest of author Aaron Gilbreath's wonderful essay, and see more of illustrator Marc Pearson's cartoons of life in a busy Manhattan Trader Joe's store, check out

Friday, November 15, 2013

It's not a SNAP, but we could eliminate food injustice

There’s been a lot of talk over the last couple of weeks about the reduction in SNAP (aka ‘food stamp’) benefits, which were the result of the end of the 2009 American Recovery and Reinvestment Act.

Although I’ve never received SNAP benefits — in fact, as a foreigner there’d be a five year waiting period, and after that, as an able-bodied adult without dependents I could only collect benefits for three months in any three-year period — I did work in the grocery business for a year while researching my book Build a Brand Like Trader Joe’s. I’ve got plenty of experience with the SNAP program from the other side of the cash register.

At the Ward Parkway Trader Joe’s store in Kansas City we served a very diverse community because the location was essentially astride two very different neighborhoods. The area west of our store, in Johnson County, Kansas, was upscale and predominantly white; the sort of well-off Republican voters who tend to sympathize with old Mitt Romney’s characterization of people receiving benefits as ‘takers’. The area immediately east of our store was also predominantly white but not as well off — the arty/liberal enclave of Waldo. 

Troost Avenue was about a mile east of our store. Anyone who knows Kansas City knows that Troost has long been the border of the predominantly African-American community. Much of the landscape beyond Troost is pretty grim; it features drugs, gangs, and a school system so bad that the state of Missouri wrested control of it from school board.

While researching Build a Brand Like Trader Joe’s I handled hundreds (probably thousands, but I wasn’t counting) of SNAP transactions, serving people of all ages and ethnicities. Some looked ‘poor’ although our store was not really that easy to get to, if customers didn’t at least have access to a car. Most looked like many other ‘cash’ customers, which is consistent with the observation that most families that receive SNAP benefits are headed by adults who have jobs, albeit low-paying ones. I did EBT transactions for a few Trader Joe’s crew members, which tells you something; even though the store paid far better-than-average wages in the retail sector, most employees still qualified.

(As an aside, the well-off white customers from Johnson County often displayed the gulf of understanding between the 1% (or maybe the 10%) and the working poor in the service sector. I remember one guy about my age, obviously pretty well off, who commented that my job seemed a lot more fun and social than his job as an accountant. He told me, “I wish I could work here.” I told him that he’d have to be ready to take a pay cut. “Yeah, I guess I couldn’t afford it,” he said, adding “What do you guys make? Like, $20 an hour?” I just smiled and shrugged it off, but I thought, Is that really what you think?)

I can tell you from experience that most people who bought food with EBT cards weren’t buying booze as well (even though we sold plenty of beer and wine to people paying conventionally.) I saw one clear-cut case of something many people would’ve called ‘abuse’ of the SNAP program: a woman buying about 10 cans of tuna told me, “They won’t let you buy pet food with food stamps, so I feed my cats tuna.”

By and large, the nutritional choices made by EBT customers were no worse than the choices made by the other customers. I often saw EBT customers make conspicuously good choices, which is to say their carts arrived full of ingredients, not prepared foods. 

Ironically, poverty in America is marked by obesity, not starvation. The issue is clearly not that many people will starve because SNAP benefits have been cut, or would starve if they were eliminated altogether.

Anyone with a nuanced understanding of the American food industry knows that the system is stacked against a healthy population, from corn subsidies on down. This has resulted in a situation where Americans spend a very small percentage of their income on food, but 10 times as much as other developed nations on health care.

I’m not going to solve this problem in a single blog post, but I’ll tell you this: Some of the SNAP recipients who live east of Troost in Kansas City managed to get to Trader Joe’s. But many of the people who need SNAP benefits live in neighborhoods that are food deserts. Those people have no choice but to use their SNAP funds to buy expensive, unhealthy prepared foods in bodegas, convenience stores and gas stations.

Rich white people who are obsessed with ‘food stamp fraud’ would eliminate far more waste— and save far, far more on future health costs — by spending their time and effort figuring out ways to make healthy food available in poor neighborhoods.

The reduction in SNAP payments is a tiny part of a much larger food injustice issue. Let me tell you this: if the U.S. really set out to solve the problem of food injustice in its inner cities — if the country really made it a priority and, step by step, did whatever it took to ensure that the country’s urban poor understood and had access to proper nutrition — in the process of solving those problems, all the other problems of the inner city including crime, gangs & drugs; the collapse of public education in the inner city; the whole fucking poverty cycle... You’d wake up one morning and realize that you’d solved all of those along the way.

Happy Thanksgiving.

Wednesday, November 13, 2013

Another Trader Joe's supplier outed, thanks to a food poisoning outbreak

From this...
A tiny corner of Trader Joe's famous veil of secrecy was lifted last week, as Richmond CA-based Glass Onion Catering was identified as the source of Trader Joe's “Field Fresh Chopped Salad with Grill Chicken” and “Mexicali Salad with Chili Lime Chicken.”

That news emerged when Glass Onion was identified as the source of an e-coli outbreak that had sickened at least a couple of dozen customers in the western states. The company also supplies "Wheatberry" and "Southwestern" salad 'kits' to Whole Foods. this. Brought to you by e.coli.
Personally, I think that anyone who buys a chicken salad made days ago and hundreds of miles away is playing fast and loose with their digestive tract anyway. If you're hung up on TJ's Mexicali Salad, try making it yourself with this recipe.

Friday, September 27, 2013

A top-10 finish in Ad Age's book poll!

Build a Brand Like Trader Joe's finished 8th overall in Advertising Age's "Best summer marketing reads" book poll! Thank-you to the readers who noticed my title in the contest, and voted for it.

Wednesday, September 11, 2013

Give the TJ's brand credit where it's due: Vote on!

Advertising Age is running a contest to determine the best summer marketing read. Give Trader Joe's brand credit where it's due, but going here, and voting for "Build a Brand Like Trader Joe's".

I'll be honest with you; Ad Age doesn't make voting that easy (unless you're already a registered site user, you'll have to register.) But, if you choose to register by linking to your Facebook page it's a little easier, and Ad Age is not a FB abuser -- they won't, for example, insist on posting on your behalf. 

Please vote! Hey, it's Build a Brand Like Trader Joe's, it's not like you're casting a ballot for Anthony Weiner.

Thursday, July 25, 2013

Trader Joe's tops one customer survey, flops another

A survey of over 6,000 people by Market Force recently concluded that Trader Joe's has the most-satisfied customers, and the ones most likely to recommend the store to others.

Quel surprise, eh? Or not.

What I find interesting about the Market Force survey is that it supports the thesis of my book, "Build a Brand Like Trader Joe's".

You can see that when customers are asked to rank the 'empirical' factors like price and selection, Trader Joe's rarely figures. Obviously, its fans like the selection of unique items, so it does well in selection, but that's it.

By contrast, when it comes to the touchy-feely criteria, Trader Joe's rocks it...

...though one has to wonder about that "Fast Check-out" ranking! They must have limited their survey to shoppers who buy groceries before noon on Mondays and Tuesdays. But seriously, folks; as I note in my book, a cheerful checkout clerk undoes the frustration of those long checkout lines. That's what this survey reflects.

My premise, that the staff is what really creates the Trader Joe's brand experience, is supported by some of the many comments that have cropped up online, in the wake of this story breaking.

And, as I note in "Build a Brand Like Trader Joe's", the way you get that superior staff interaction is by paying a little more. Increasingly, customers are aware of the implications of shopping in stores that refuse to pay a living wage...

Meanwhile, in other survey news...

It seems as if Consumers Union, the activist arm of the respected magazine Consumer Reports, timed the release of information about its own Trader Joe's survey to coincide with news about its #1 status among grocery customers generally.

Consumers Union has been working hard for the last year or two to make Trader Joe's the poster child for its campaign to reduce antibiotic use in the livestock industry. It surveyed over 1,000 Trader Joe's customers and learned that...
  • 87 percent of Trader Joe's shoppers agreed that supermarkets and meat suppliers should work together to avoid giving food animals antibiotics unless they are sick, compared to 79 percent of other store shoppers
  • Only 23 percent of Trader Joe's meat shoppers were aware that the store sells meat raised on antibiotics but 72 percent were concerned about this policy
I address the disjunction between what Trader Joe's does, and what its customers think it does in my book.

For more information on the antibiotics in TJ's meat issue, click here.

Tuesday, July 9, 2013

Chicago blogger blasts broccoli, castigates cashier for kidding with kid with kid's cart

A popular fitness blogger posted a funny rant on the Chicago Now blog, that you can read here.

The blogger, Traci D. Mitchell, is pretty astute; she's a careful reader of packaging, and was shocked to realize that her frozen broccoli had been picked & packed, and shipped frozen... from China. Regular readers of this blog--and anyone who's read my book--will know that TJ's carbon footprint is not consistent with its brand image.

I thought she was also on the money (and funny) when describing a painfully slow-but-cheerful checkout experience, involving a little kid pushing one of those cute half-size carts, accompanied by his doting mommy. That's the downside to Joe's policy--and brand strategy--of extending those employee-customer interactions. Although it works overall, when it fails, it drives customers crazy.

For what it's worth, Traci, those small carts drove me crazy when I was doing the 'cart run' out in the parking lot. They don't nest with the regular sized carts, and slow the process of returning the carts to the store. Eventually though, I realized that anything that extended the cart run was actually good for me; it gave me a welcome break from the madness of the store!

Wednesday, June 26, 2013

If this is true, it's interesting news on Trader Joe's policies re: national brands

About 85% of the branded products sold in Trader Joe's stores issold under Trader Joe's own brand(s).

Trader Joe's jealously guards the sources those products. Some of them, like yogurts made by Stonyfield, are produced by big companies that also sell their own brands in other stores (and produce other chains' private-label brands, too.) Where possible, though, TJ's likes to be the suppliers' only customer.
That said, there have always been a few exceptions on TJ's shelves, in the form of national brand products. Examples: the idiosyncratic Dr. Bronner's soaps, a few wines, and cut cheese.

I have always been bothered that TJ's sells Fiji brand bottled water, perhaps the most overpriced and evil player in the generally evil bottled water category. I'm struggling to imagine a more wasteful use of resources, than shipping water from Fiji. What's the bet that average Fijians don't have access to safe drinking water?

Another name brand product TJ's sells is Zico Coconut Water.

If this somewhat garbled post from the food blog is accurate, TJ's relationship with Zico is taking a new turn. Apparently, Zico's making a new flavored coconut water, that will be sold under Zico's brand, but made available exclusively through Trader Joe's.

What makes this interesting is, Zico's is not some small supplier that Trader Joe's can bully into an exclusive deal. It's owned by Coca Cola.

I don't know what to make of this news, and of course one thing we can be sure of is, Trader Joe's won't talk about it. It's possible Coke's just using Trader Joe's as a test market. It's also possible, however, that this represents a new strategy on the part of Trader Joe's, which has always relied on the sense that it's product mix -- all of the Trader Joe's-branded products -- are exclusive.

Is Trader Joe's now going to begin telling customers that it's a source of exclusive national-brand products, too?

Wednesday, June 19, 2013

Four year-old fart still funny

We all know that Trader Joe's is the singles' choice when it comes to grocery stores.

I have no way of knowing whether or not this ad, dated 2009 but which only recently surfaced on my FB page, is legitimate. All I can say is, the author's got a great sense of humor and, if he really placed this 'missed connections' ad, he's also got a hell of a sense of optimism!

Thursday, April 25, 2013

Joe's 'Net Promoter' score drops, but his ranking improves. What gives?

Satmetrix, a company that specializes in measuring customer satisfaction, just released its 2013 Net Promoter Industry Benchmarks study, and Trader Joe’s shoved the much-loved-in-the-Northeast Wegman’s chain off the top of the ‘grocery’ category list. That’s the good news, but the bad news is that while Trader Joe’s rose one position, its ‘Net Promoter’ score has actually dropped.

The Net Promoter score is based on a survey of 20,000 consumers. Each consumer ranks the brands in the survey from 1-10 based on their own arbitrary feelings of satisfaction. The number of consumers who rate a brand from 1-6 is subtracted from the number of consumers who rate it 9 or 10.

Trader Joe’s score was 63%, which suggests that for every person with mild-to-middling negative feelings about the brand, there are two people with strongly positive feelings. That was enough to put it at the top of the grocery category. The average of all grocery stores was a measly 36%, suggesting that overall negatives outweighed positives by 2:1.

Costco scored an impressive 78%, but Satmetrix classifies it as a department store.

Both Trader Joe’s and Wegman’s scores dropped in 2013; TJ’s fell by 10 points, while Wegman’s 20-point drop caused it to fall from first to fourth in the grocery sector. According to Satmetrix, an analysis of the full survey response suggests that Wegman’s relatively premium prices were at fault when customers said they would not recommend it.

Another factor in the fluctuating scores, however, are the statistical limitations of a 20,000-customer survey. That sounds like a significant sample. However, there’s ample evidence to suggest that most grocery shoppers do not travel far to buy food. Trader Joe’s has less than 400 locations, while Wegman’s operates in a strictly limited geographic area. Satmetrix’ report summary doesn’t cite the number of consumers who responded to questions about Trader Joe’s, but since TJ’s sells roughly 1% of the groceries in the U.S., the survey probably only reached a few hundred regular TJ’s shoppers, at most; with such a small effective sample size, it’s likely that the fluctuation is inside the margin of error.

Tuesday, April 16, 2013

Trader Joe's beards the lion in its den

We note that Trader Joe's, which only recently arrived in the state of Texas, has yet to open it's first Austin store, but has already announced a third Austin location. By my count, the chain will have as many stores in Austin (population <1M) as it has in the Dallas-Fort Worth area (population >6M).

The strong showing in Austin probably reflects TJ's corporate assessment of Austin's lefty-liberal skew. In the rest of Texas, they call it The People's Republic of Austin. But it's also a direct dig at Whole Foods, which is based in Austin.

The two stores are very different, of course. Whole Foods carries far more SKUs, pays vastly more attention to fresh products and national brands, in much larger stores; it's premium priced, too. But, having worked at Trader Joe's, I can tell you that a lot of people come into Trader Joe's stores and load their groceries into reusable bags carrying the Whole Foods logo.

While I'm on the subject of rival grocery chains... There are persistent rumors that Trader Joe's, or Aldi, will acquire Tesco's failed Fresh & Easy chain here in the U.S. That could make sense, I suppose. (After all, I was one of the first people to suggest it.) But a more interesting development would be for Whole Foods to use Fresh & Easy as a platform to fight Trader Joe's on it's own small-store/restricted SKU/own brand territory.

With the backing of Whole Foods, Fresh & Easy could position itself with far stronger organic/sustainable credibility, and encourage Trader Joe's customers to look closer at their favorite stores' environmental credibility.

It deserves its "Whole Paycheck" nickname, but Whole Foods kicks Trader Joe's butt when it comes to produce. The Austin-based chain also maintains far better transparency on environmental issues. That would be a point it could exploit, if it ever really wanted to aggressively go after Trader Joe's erosion of Whole Foods' customer base.

Sunday, March 31, 2013

Lawsuit labels Trader Joe's as liars

I see on the Huffington Post that Trader Joe's will have to defend itself in a class-action lawsuit over misleading labeling. Specifically, the suit refers to 'evaporated cane juice', listed as an ingredient in Trader Joe's yogurt. Evaporate cane juice, by another name, is simply sugar.

'Evaporated cane juice' = sugar. Although much commercial sugar is extracted from beets, sugar from the two sources is chemically identical. In fact, virtually all sugars are nutritionally identical. But 'evaporated cane juice' certainly sounds a lot healthier than 'high-fructose corn syrup'.
Although the U.S. Food and Drug Administration has officially banned the use of the term, but Pierce Gore* - a San Francisco-based consumer affairs attorney who has launched dozens of similar suits - claims Trader Joe's continues to use the term in a fraudulent attempt to make its prepared foods appear healthier than they really are.

I was interested to read some of the comments that appeared on Huffington's post about the suit, because they underline key points that I made in Build a Brand Like Trader Joe's -- mainly that the company's devoted fans will leap to its defense even when, as in this instance, critics have a solid case.

One poster asked, "How stupid would consumers have to be, not to realize that 'evaporated cane juice' was just another name for sugar?" Obviously, Trader Joe's doesn't think consumers do know that it's just another name for sugar; if they did, they'd just list 'sugar'.

Another pointed out that since a lot of sugar comes from beets, which are often GMO, by listing evaporated cane juice, Trader Joe's was reassuring customers of the non-GMO source of the sweetener. Leaving aside the fact that there is no genetic material in sugar, rendering GMO fears moot, that defense begs the question, why not list 'cane sugar' as the ingredient? Doing so would obviate any criticism of disingenuous labeling.

When I worked at Trader Joe's, I rolled my eyes when I saw that 'evaporated cane juice' ingredient. Notwithstanding Trader Joe's ardent defenders on HuffPo, the truth is that the company actively seeks to abet the conflation of terms like 'all natural', 'organic', and 'healthy' in its customers' minds.

Prepared foods account for the lion's share of Trader Joe's profits, and per square foot, the frozen foods section is the most profitable section of the store. And while virtually everything in there is 'all natural', and much of it is 'organic', those convenient meals are loaded with fat, calories, and especially sodium. (When I was being trained, I was warned that one question I was bound to get was, "Why is there so much salt in Trader Joe's foods?" I was told to answer that Trader Joe's never used artificial preservatives, and salt was necessary as a natural one." I was, like, Yeah but we're talking about food that's frozen.)

For those in the know, Trader Joe's spokesperson Alison Mochizuici's official statement that the company won't comment on pending litigation is kinda' funny; the company won't comment on anything, more like it. Gore, the lawyer, will either win this one or force Trader Joe's to settle and change at least one (highly) questionable labeling practice. If the management is smart, it will take this opportunity to bring both labeling and, over time, formulations of prepared foods into line with the perception people have of the brand.

*Yes, he's the Al Gore's cousin.

Wednesday, March 13, 2013

Message to retailers: Greedy for increased profits? Then pay rank-and-file staff more

Costco's CEO Craig Jelinek is an outspoken proponent of an even-higher minimum wage than the one proposed by Obama in the most recent State of the Union address. Costco is, in fact, a sort of poster child for higher salaries for front-line retail employees.

Most retail employees earn less than Obama's wished-for $9/hour minimum rate. And while Republicans howled that raising the minimum to that level would bankrupt businesses or, at the very least cause them to stop hiring altogether, Costco's latest quarterly report proves that it's far-more-generous pay-and-benefits package hasn't hurt profits. In fact, Jelinek believes it's helped the retail giant to a quarterly profit of $537 million -- a 35% increase over the same quarter last year. By coincidence, Costco's per-employee profit is about $10,000, which is about 35% more than Walmart's.

Vice-President Joe Biden was disappointed that Costco didn't carry shotgun shells, but otherwise pleased that Costco co-founder Jim Sinegal (center) and current CEO Craig Jelinek generally support progressive policies. Jelinek recently suggested that $10.10/hour would be an appropriate minimum wage.
The average Costco worker earned $45,000 last year -- almost triple the average employee of Sam's Club (a similar warehouse store owned by Walmart). The majority of Costco's full- and part-time workers are covered by health insurance, too.

According to Jelinek, “At Costco, we know that paying employees good wages makes good sense for business. Instead of minimizing wages, we know it's a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty."

While Trader Joe's will never release profitability figures, it's certainly another highly profitable retailer that offers far better than average salaries to customer-service staff. When I was researching my book, Build a Brand Like Trader Joe's, I found tons of evidence to suggest that the correlation between higher wages and higher profits is general; it's not something that only works for certain retailers, like Trader Joe's and Costco. In Trader Joe's case, higher wages allow the chain to selectively hire the kinds of employees who will build the store's unique, idiosyncratic brand, too.

Monday, March 11, 2013

Lots 'o people love Trader Joe's. But not like Nico Lang

Millions of people love Trader Joe's. I wrote a whole book about how that happened. But Nico Lang -- whose work often appears on Chicago's NPR mega-station WBEZ -- has taken TJ's love to a new level, pledging to marry Trader Joe's.

I don't know whether Nico wants to marry the entire chain, or just one Chicago store. Or, if Illinois approves gay marriage, maybe he'll marry Joe Coulombe (though I doubt the original 'Joe' is up for it.)

In a long post on the well-written Thought Catalog blog, Lang rhapsodizes about the marriageability of Trader Joe's, comparing it favorably to such presumably marriage-worthy stars as Ryan Gosling and George Clooney.

Nico's essay may be tongue-in-cheek, but it's interesting to me that he makes a couple of points that I made in my book. (I'm not saying he listened to my interview on WBEZ, but he might have...)

You might think that we’re in the honeymoon period and that I can’t see your flaws, but I accept you — for whatever you throw my way. Is that price not correctly marked? Is the food not always as healthy and organic as it appears? You think that I just see food that tastes good and don’t think about the politics behind it? I know why I have to travel from my “diverse” neighborhood a half an hour by bus to get to you, and why you only seem to be located in “white” neighborhoods. I understand food deserts. I know what your deal is.
I’m ready for a real relationship with you, which means calling you on your bullshit and knowing that your parents (or society) made you this way. They screwed you up, but we get better when we help each other. I see the good in you and know that sometimes instead of throwing the food that has “gone bad” away, you donate it or leave your dumpsters open for garbage pickers to reduce your food waste. You’ve got some baggage, but you’re also a force for good in the world. You care.
What fascinates me still, is that Trader Joe's fans cut the chain so much slack, in exactly the way that we excuse flaws in our friends that we'd find totally irritating in strangers. When he says, "Is the food not always as healthy and organic as it appears? You think that I just see food that tastes good and don’t think about the politics behind it?" it's as if he's been reading this blog.
Nico has an idealist's view of marriage as something you work on. "Is the food not always as healthy and organic as it appears? You think that I just see food that tastes good and don’t think about the politics behind it?" The implication is, of course, that Trader Joe's will actually listen.
"We have to talk" is not something that Trader Joe's famously close-mouthed senior management is ever going to respond to...

Monday, February 11, 2013

Liberals biased towards Trader Joe's? Conservatives for Walmart?

A recent story on the Pacific Standard web site -- which has since been repeated on the Huffington Post and many other aggregators’ sites -- purports to ‘explain’ liberals’ bias towards stores like Trader Joe’s, and conservatives’ bias towards Walmart.

Color me skeptical.
The underlying academic study was published by a researcher named Vishal Singh in the journal Psychological Science. It was, in fact, not a study of Trader Joe’s vs. Walmart per se, or the two chains’ customers. Rather, it associated religiosity and a tendency to vote Republican in conservative-leaning counties with those counties’ consumers’ tendency to favor branded over generic products. 

The research was a bland piece of statistical meta-analysis. Journalists who picked up the story turned it into a meme by leaping to the conclusion that it provided scientific confirmation of their own opinions about Trader Joe’s and Walmart customers.

From my perspective as an expert on Trader Joe’s, the conclusion is flawed. It was wrong to cast Trader Joe’s as a supplier of generic products, for the simple reason that to Trader Joe’s customers, ‘Trader Joe’s’ is a highly-desirable brand in its own right.

I’m not surprised that the ‘journalists’ who repeated Pacific Standard’s flawed conclusion believe that liberals are biased towards Trader Joe’s. Until very recently, almost all Trader Joe’s stores were located in blue states. Likewise, Walmart stores tend to serve consumers who live outside of the U.S.’ largest urban centers. (There’s not a single Walmart anywhere on the San Francisco peninsula, nor is there a Walmart anywhere in Manhattan or Brooklyn.) If there are no Walmart stores in such big liberal enclaves, it’s not surprising Walmart customers skew conservative.  

The truth is always more complex. 

The Trader Joe’s store where I worked, in Kansas City, served a diverse population. Two miles to the east, there was a neighborhood that was poor, high-crime, and mostly African-American. I served lots of customers who Mitt Romney would have happily characterized as congenitally Democrat -- members of the 47% of the population subsisting on hand-outs. Two miles to the west of my store was the posh suburb of Mission, KS. You can be sure shoppers coming from the west voted Republican. 

I’m not surprised, either, by the sketchy merit of the underlying study, in spite of Psychological Science’s claim to be one of the top-10 peer-reviewed journals in its area.  This study’s not based on actually observing the purchasing habits of conservative consumers, or even on surveys of such consumers. 

Singh’s study analyzed “a comprehensive database that tracks weekly store sales of thousands of products. Focusing on 416 counties which collectively represent 47 percent of the U.S. population, they calculated the market share of generics in 26 categories, including coffee, deodorant, and peanut butter.” Reports don’t suggest the researchers are capable of parsing the subtle distinction between ‘generic’ and ‘own-brand’ products.

I don’t know enough about the database to comment on the likelihood that it reflects total consumption. But even if the database included all grocery purchases -- which it certainly doesn’t -- Singh merely proves that counties in which a high percentage of the population self-report as religious and/or Republican are also counties in which sales of generic products (and newly introduced branded products) lag. Singh’s research doesn’t -- and can’t -- prove that those religious and/or Republican consumers are the very same people eschewing generics.

In fact, the research doesn’t actually prove that anyone is rejecting generics. What it proves is that academic psychologists don’t know anything about the grocery business.

Walmart, for example, is the largest grocery retailer in the U.S., and it concentrates on selling national brands and deemphasizes generics. As noted above, Walmart skews rural-to-small-city. Religiosity and Republican voting patterns also skew that way. So, an inverse relationship between generic products and religiosity/Republicanism is an expected association, and doesn’t necessarily mean those religious, Republican consumers are consciously avoiding generics. It only means that the stores where they shop push brands, not generics.

Sunday, January 20, 2013

Two Buck Chuck goes to $2.49 in California, but I doubt it will get 20% better

A price you won't see again, even in California.
The Mayan Apocalypse prediction was a flop, but shortly afterward, we did get evidence that the end of the world is near. Yes, Trader Joe's has finally raised the price of its famous 'Two-Buck Chuck'. Yes, Charles Shaw wines will henceforth sell for $2.49 in all California Trader Joe's stores.

We called it 'Two Buck Chuck', but Charles Shaw wines always sold for $2.99 at my store here in Kansas City. Pricing varies based on state-by-state liquor taxes and transportation costs. According to NBC, the highest price was $3.78 in TJ's stores in Ohio.

Still, Trader Joe's was desperate to hold the original $1.99 price as long as possible in California. I'm sure they squeezed Fred Franzia as hard as he squeezed his grapes, in order to control that cost.

Honestly, I had trouble recommending it at any price. All batch processed wines vary, and while I occasionally tasted a Charles Shaw wine and thought it was decent at the price, I more often found it undrinkable. There are more than a few people who call it 'Two Buck Upchuck', but I think that's a cheap shot. (I did occasionally cook with it, and you can usually use it as the basis for a decent sangria.)

We sold several $5-$10 wines that were easily twice as good as our $2.99 Charles Shaw stuff. I always advised customers to buy something twice as good and drink half as much of it.

However, if you're really desperate for the cheapest possible booze, buy one bottle and taste it. If you like it, immediately buy a case or two. If you don't like it, try again in a month. It really varies quite a lot from batch to batch.

In the meantime, if you want to remember the good old days, when Two Buck Chuck was really less than two bucks, you can read a great article about industrial winemaker Fred Franzia and the creation of Charles Shaw wines here, in the digital archives of New Yorker magazine.

It remains to be seen whether Trader Joe's abandonment of the $1.99 price point will release other discount winemakers, like Barefoot, to raise their prices, too.


According to the unusually loquacious Alison Mochizuki, spokeswoman for Trader Joe’s:

We work hard to have every item in the store at an intersection of quality and price that highlights outstanding value. In general, our retail prices change only when our costs change.
We’ve held a $1.99 retail price for 11 years. Quite a bit has happened during those years and the move to $2.49 allows us to offer the same quality that has made the wine famous the world over.

Thursday, January 10, 2013

News Flash: Trader Joe's has an official Twitter account

The Mayans may have been wrong about the end of the world, but something almost as earthshaking did happen just a week after the solstice. Trader Joe's launched an official Twitter feed. After years of being cited as an example of brands that flourished while ignoring social media (as well as just about any other kind of advertising or PR), TraderJoesUSA started tweeting. If it's not an official Trader Joe's feed, it's got me fooled.

Will Trader Joe's actually start communicating (more than trite recipes on the web site and too-clever-by-half soliloquies in the Fearless Flyer)? So far, it's only issued 27 tweets, and they all seem pretty innocuous, so it's too early to get excited.

It's not, however, too early to follow them. To do so, go here.

UPDATE -- It's not an official site. Sorry.

Sunday, January 6, 2013

Is Lululemon founder Chip Wilson the world's most unlikely retail billionaire?

The other day I accompanied Mary on a shopping trip to Lululemon, the upscale yoga-wear retailer. Traditionalists may be disappointed to learn that 'upscale yoga' is not an oxymoron, although I know what Patanjali would say about $135 sweatpants. 

I always keep an eye on Lululemon, for a variety of reasons. One is the shocking valuation commanded by the stock. Its market capitalization is about $10 billion. In case you have trouble with simple math, that works out to well over $50 million per store. I also followed the brand's attempts to patent certain features of its trousers that make womens' butts look firmer and more shapely. 

(For the record, I believe that the creators of Lululemon trousers deserve a fabulous award for their outstanding work in this field. They've done, for posteriors, what Playtex' lift-and-separate bra did for breasts 40 years ago. Perhaps the Nobel Prize commission could institute a new category. Seriously, the trousers are that good. But, I'm not sure that a functional piece of clothing should be patentable. There's the notion of 'prior art'. But, I digress...)

Anyway, I'm guessing that investors, seeing how great womens' butts look in Lululemon think, as I do, "I want a piece of that."

Another emotional connection I have to the company is, Lululemon's roots, if you dig deep enough, go back to Calgary, Alberta, Canada. My retail roots go back to that place and time, too. Decades ago, I was the Creative Director at Mark's Work Wearhouse's ad agency and, later & briefly, the company's VP of Marketing. Those stores, now known simply as 'Mark's' were created by a friend and mentor, Mark Blumes. Blumes was a legend in Canadian retail, and certainly the most important Calgarian in the world of retail. Until, that is, Lululemon was created by Dennis 'Chip' Wilson, who was also a Calgarian. 

That brings me to the most important link I have to Lululemon: I've actually spent many, many hours cooped up in a small, basement room with Wilson.

In the late '70s, I spent a couple of hours a day working out in the weight room at the University of Calgary. For much of that time, totaling several hundred hours at least, I worked out in close proximity to Chip. This was before Arnold Schwarzenegger made pumping iron a thing; weight training was a subculture. The gym was small enough that every regular knew every other regular.

Understatement: That was also long before he found his way onto the Forbes 'billionaire' list.

Chip hung out in the U of C gym because he was a football player -- he played for the Dinosaurs, our college team and (If I recall correctly) entertained the fantasy of trying out for the Calgary Stampeders as a walk-on. He was brash and, even then, a larger than life character albeit one straight out of central casting: a self-styled Big Man On Campus. I once overheard him describing what he liked about playing football as, "I like to hit."

He wasn't CFL material; I'm pretty sure that he never did walk on at the Stampeders camp. Instead, he got a job as a 'land man' in the oil business. That was what you did, after wasting four years at university. In the hierarchy of the oil patch, there are geologists who actually find oil at the top, there are engineers who figure out how to extract and refine it below them, and there are land men who arm-wrestle farmers into locating a drill rig on their land. The essential skillset of a good land man consisted of a firm handshake and the ability to consume large quantities of alcohol at lunch, while still creating a simulacrum of work later in the afternoon.

I want to take you back to Calgary in the late '70s or early '80s, before the 1988 Olympic Winter Games transformed it into a modern, cosmopolitan city. It had already sprouted a first crop of glass skyscrapers downtown, but the vibe was anything but urbane; it was a roughneck-cowboy town with, like, one place to buy a cappuccino. 

A few blocks of Eighth Avenue, downtown, had been turned into a pedestrian mall. On warm summer days, the buildings disgorged office workers at lunchtime, and the mall was crowded. For a while, it developed into a funky outdoor street market, and people set up tables selling all manner of shit; candles, cheap leather sandals, you name it. By 1:30 in the afternoon, the office drones had gone back upstairs, and the mall was left to a few scruffy hustlers and panhandlers who'd hitchhiked in off the reserve.

One summer day, I was shouldering my way through the lunch crowd and came across Chip Wilson, who was wearing suit pants and black leather shoes, but had stripped from the waist up. That was the kind of thing he'd do, I guess. Get out of the office wearing a suit that didn't suit him, and, feeling the warm sun, decide to cop a tan. What surprised me was, he actually had a little market table on the mall, and was selling garish, baggy shorts. When I asked him where he was getting them, he told me, "I make them."

Now, we made our own stuff at Mark's Work Wearhouse, too of course. So I clarified my question. I meant, Yeah you're getting them made, but where? That's when I realized that by 'I make them' he meant, he actually sewed them himself.

Chip was not exactly a surfer dude; we were a thousand miles from the nearest surf break. But the Canadian prairies were, paradoxically, a good place for windsurfing. And as the story goes, one day he was looking for some board shorts and couldn't find any (or, any in his large size) so he borrowed a sewing machine from his mom and, after getting rudimentary instruction in its use, made his own shorts.

This was already enough to make me raise my eyebrows. If I had to pick the last person in Calgary who'd take up sewing as a hobby, I would have picked Chip Wilson. That said, he was making board shorts. It was a sort of vicarious way to be Californian, in a let's-go-surfing-then-drink-beer-around-the-bonfire way. This was not some new-age guy getting in touch with his feminine side. And if I'd suggested that, next, he'd take up yoga, he would have punched me in the face.

Anyway, in pretty short order he quit his day job, and formed a business called West Beach, which catered to the windsurfing/skateboarding scene in the summer, and sold snowboard clothes in the winter. It made sense for that business to move to the west coast, and after Chip Wilson decamped for Vancouver, he pretty much fell off my radar. 

Years later, I saw my first Lululemon store -- I think it was in Santa Monica. By then, I was living in Encinitas, California. SoCal had more yoga studios than gas stations. And while lots of yoga studios had a little rack of clothing for sale, I realized right away that Lululemon had tapped into a large and growing market. 

By then, yoga had largely been decoupled from its ascetic roots, so while I recognized the irony of high-end, expensive yoga clothes, I knew that irony would be lost on Lululemon's Lexus-driving, lotus-eating customer base. The whole thing was fascinating to me, and I asked the clerk about the store. I just about crapped when she told me the name of the founder: Chip Wilson.

Talk about cognitive dissonance. On the one hand I thought, Chip Wilson, clothing, retail; it had to be the same guy. On the other hand, if you could travel back in time to 1980, and search the entire planet to find the person least likely to start a hip women's clothing company, with a yoga theme and shopping bags printed with new age sayings... 

Honestly, you could search the whole planet and you might very well say, I've found him, I've found the least likely guy on earth, to do that: Chip Wilson.

Chip, of course, has since sold a stake in Lululemon, with the result that he's a billionaire. He's still the Chairman of the Board. He looks exactly like he did in 1980, except older. But I guess he must be a pretty different guy. I know I will never, ever, see a Lululemon logo without pondering the extreme unlikeliness of Chip Wilson. How the hell did he, of all people, end up being him?

There's a great scene in the Coen brothers' film Burn After Reading, in which the actor J.K. Simmons plays a CIA bigwig (named 'J.K. Simmons'). The film has a hilariously convoluted plot, at the end of which Simmons is given almost the final word. "I guess all we can do is learn from it," Simmons sighs, "But I sure wish I knew what we were supposed to learn."

Maybe it's that you'll find your greatness doing something you never would have imagined.

Wednesday, January 2, 2013

Is this the most epic private label brand fail ever?

Although there's no direct connection between Aldi stores here in the U.S. and Trader Joe's (the two chains are owned by two different branches of the Albrecht family, in Germany) regular readers will know that I am a fan of Aldi, too.

There's lots to love about this hardscrabble supermarket concept, and some great values to be had here.

But, oh my God, do they ever have some epic fails. Aldi's clearly been cutting costs in their in-house branding and packaging group, and must have fired their last writer. What other explanation could you possibly come up with for this epic brand fail?

Yes, Aldi's take on a Monster Energy or Red Bull-style energy drink is called... Gridlock.

Can you imagine a worse image for an energy drink? (Suggestion: 'Blackout'.) Or, for that matter, can you imagine anything worse than being stuck in actual gridlock, while hopped up on this shit?