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How Trader Joe’s Wine Obsession Launched Its Grocery Revolution
America’s favorite supermarket discovered its retail formula in booze
In 1957, Joe Coulombe knew nothing about the grocery industry. He was 27 years old and had never taken a course in retail. He had never operated a cash register, waited on a customer, or filled out a purchase order for a wholesaler. He had no particular interest in food and cultivated such a rarified wine palate that he preferred to sip on Paul Mason Cooking Sherry to relax.
He was however a recent Stanford Business grad who had been hired by the Rexall Drug Company to revive its failing Owl Drug chain. As part of this process, Joe discovered 7-Eleven, then a relatively new chain out of Texas. Rexall’s response was to ask Joe to start an imitation chain in California. This struck him as madness, but nevertheless Rexall corporate selected six Owl stores and declared they would form the basis of a new chain. Joe is named president, and the fleet of stores that will become Trader Joe’s of today is born.
His first act as president was to find what he thought was the best run grocer in town and apprentice himself, offering to work free on weekends in exchange for a half hour of the owner’s time after each shift. The owner was giddy — a Stanford grad mopping his floors! — so for months, Joe spent his weekends slicing boxes and stocking shelves, before heading to the back office with notebook and pen, asking every simple question that came to mind.
Later, he would call it the best way to get an education. One observer tells me, “that grocer got a smart young kid to work with him for a few months. Joe got a billion- dollar business.” But Joe’s own personal takeaway: He didn’t actually like the grocery world. How his wife, Alice, puts it, “Grocery is a very conservative culture. And Joe didn’t belong. Or attempt to belong. Early on we went to a single grocery industry convention. Then we decided never to go again.”
So he broke with tradition.
Rather than worrying about which items his customers expected, Joe became obsessed with products with a high value relative to size.
