Joe Colom, JOE, Albrecht discussed on Freakonomics
I I got interested in trader Joe's about ten years ago never been to one of their stores, but I had a general impression cheap and cheerful relatively laid back and sort of groovy for grocery store, apparently reflection of its surfie, California roots, also not aggressively health conscious but leaning in that direction. And then I read Wall Street Journal article about German grocery chain called Aldy that was ramping up its US expansion all the is a super cheap super generic grocery store. Ninety five percent of its products were house brands, and it was beating even WalMart on price. The article said the chain had two branches back in Germany separately owned by two wealthy brothers named Albrecht. And that one of those branches also owned trader Joe's I found. This back surprising only because when I think of German business practices. I don't think of a groovy earthy, crunchy, California surf vibe, but there. So it was I also learned that trader Joe's stores were much smaller in typical supermarkets that they had their own way of doing things and the places without trader Joe's often started petitions to bring one to their town. It was a sort of loony devotion usually reserved for sports teams or your favorite band kinda grocery store has a following like that. And then when I learned that trader Joe's out sells all other grocery stores per square foot. I really started paying attention then one opened up near my office here in New York started shopping there and the most part loving it. I realize it's not for everyone. In fact, predator strategy is trying not to be for everyone. But I did want to know the secrets to their success. We reached out to the trader Joe's headquarters in Monrovia, California. And we're politely told to get lost. As we mentioned earlier, the company is known for its secrecy. The two brothers who founded all north and all the south in Germany. You know, have a record of that Michael Roberto again that was kind of the family heritage of early being pretty secretive about their business operations. And really, they weren't even you couldn't even find photos of them like on the internet for years. I mean, they were very secretive. It's a strange combination affirm that prides itself on user-friendliness while also keeping its distance which means that a lot of what's known about. It comes from industry. Analysts and other secondary. Sources blitz start here in the very beginning. There really was a Joe behind trader Joe's, Joe Colom. He opened the first store in nineteen sixty seven in Pasadena, California. He went with a South Seas theme beach Hawaiian shirts calling employee's captains and crew members in nineteen seventy nine Colom sold the chain to one of the secretive Albrecht brothers feel feel Albrecht was recluse. Perhaps it was said because he had once been kidnapped and held for ransom. For seventeen days in Germany Albrecht died in two thousand ten but trader Joe's remains notoriously press shy. It's also a privately held company. So no earnings calls with investment analysts. No public proclamations of any sort really about how it does business. And so to figure out how it works will rely on a few people who've spent a lot of time thinking about trader Joe's, including the business school. Professor Michael Burto, we've already met correct? Also, the Columbia business school, professor Sheena anger, whose research specialty is particularly relevant here. I've been studying choice. Why do we want choice? What are the things that affect how in what we choose? And what are some things we can do to improve our choice making abilities? We'll also talk to a trader Joe's superfan. My name is Kirk to Serbia I reside in Seward Alaska Seward, by the way, does not have a trader Joe's, nor does the. State of Alaska the closest store from disarming. His house is two thousand two hundred ninety five miles away by car in Bellingham, Washington. Discern mea is the guy who we heard earlier say this the first thing, I do when I know I'm going somewheres get on internet and find where the closest trader Joe's is and will hear from a spy in the house of trader Joe's, a former advertising executive named Mark gardener who became obsessed with the chain. And I had this thought like, you know, what if I just went and work fare? What would I learn about this company?.