Yes, they really are secrets. Trader Joe’s doesn’t divulge information about its management system or its strategies or its success. So Fortune spent two months talking to people who have worked for the company, competed against it, analyzed it, and supplied it (click here for article). This is what they found:

• Trader Joe’s is roughly the same size as Whole Foods. It is owned by Germany’s Albrecht family but still managed by its founder.

• The company is very selective about where it puts new stores. It’s only adding five locations this year. It looks at demographics to choose sites in places that fit its distribution infrastructure.

• Trader Joe’s offers a limited selection of products. Typical grocery stores carry 50,000 SKUs; Trader Joe’s sells about 4,000, about 80% of which bear the store brand. “With greater turnover on a smaller number of items,” Fortune writes, “Trader Joe’s can buy large quantities and secure deep discounts. And it makes the whole business—from stocking shelves to checking out customers—much simpler.”

• Trader Joe’s pays its suppliers on time without the extra charges for advertising, coupons, or slotting fees that other supermarkets charge.

• The company buys directly from manufacturers that ship straight to Trader Joe’s distribution centers, which ship daily to stores. The stores don’t carry much inventory so ordering must be precise.

• Store managers can make low six-figure incomes while full-time employees can start at half that, and Trader Joe’s annually contributes 15.4% of employee’s gross income to tax-deferred retirement accounts.

• Trader Joe’s is becoming more corporate. As a former employee observed, “You have to grow up at some point. You have to start following rules. You have to start putting in checks and balances.”

It’s becoming more systematic in its approaches within a culture that has been very successful. As the article notes, “A Trader Joe’s brings with it good jobs, and its presence in your community is like an affirmation that you and your neighbors are worldly and smart.”

So that’s why they put a Trader Joe’s in my hometown.

To read more about successful cultures, click on these articles:

• A Baldrige Leader
• What Great Organizations Achieve
• Zappos and a Sustainable Culture
• Guided by Your Culture
• Sustaining the Culture
• 2009 Baldrige Award Winners

(7 votes, average: 4.29 out of 5)

 Loading ...