Joe Coulombe opened his first store in Pasadena, California in 1967. As he told the story, Trader Joe’s went through significant makeovers as it developed a cult following on its way to become a national retailer, a household name, and a store people and towns beg to locate in their neighborhood. Trader Joe’s today has been revered as “a treasure chest of cheap thrills” that includes exotic, fun, healthy fare, and one of the strongest private label lineups in retail.
Coulombe realized a small store could not compete with larger chains on price alone and therefore must find a way to differentiate the shopping experience from other retailers. His solution was to create a strong private label program. “In the 1980s, I came to develop what I call the Brooks Brothers strategy,” explained Coulombe. “When you go to a Brooks Brothers, there is nothing in that store that does not have a Brooks Brothers label on it. We dropped out our wholesale grocery co-op in 1982 and that ended our source of all conventional brands.”
According to Coulombe, “We first moved into private label products in which there was no strong national brand. Then in 1977 we started even more intense work in developing our private label product lines. In the meantime, we were building our private label wine program.” By the late ‘70s, he began to remove branded food products then moving into own label products category by category. He liked to say Trader Joe’s was designed to serve customers who are over-educated and underpaid.
In 1979 he sold Trader Joe’s to Theo Albrecht, one of the co-owners of the Aldi discount chain based in Germany. Coulombe retired from Trader Joe’s in 1988. Today, Trader Joe’s operates over 525 stores in 42 states and registers an estimated $15 billion in annual sales and it’s estimated 80% of its products are under its own brands including Trader Joe’s, Trader Darwin and Trader Giotto’s, among others.