Joe Coulombe > Quotes

“I concluded that I didn’t have to find an optimum solution to Pronto’s difficulties, just a reasonable one. Trying to find an optimum solution in business is a waste of time: the factors in the equation are changing all the time. But you’ve got to have something to hang your hat on. The one core value that I chose was our high compensation policies, which I had put in place from the very start in 1958. This may sound like a strange way for polarizing a business, but I did not want to destroy the faith that Pronto Markets’ then-handful of employees had in me and in our common future. After all, they had just ponied up half the equity money needed to buy out Rexall.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“Time and again I am asked why no one has successfully replicated Trader Joe’s. The answer is that no one has been willing to pay the wages and benefits, and thereby attract—and keep—the quality of people who work at Trader Joe’s. My standard was simple: the average full-time employee in the stores would make the median family income for California. Back in those days it was about $7,000; as I write this, it is around $40,000. What I didn’t count on back there in the 1960s was that so many spouses would go to work in the national economy. When I started, average family income was about the same as average employee income. The great social change of the 1970s and 1980s moved millions of women into the workplace. Average family income soared ahead. But we stuck with our standard, and it paid off.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“In a lecture at the University of Southern California Business School, I talked about this. A young woman raised her hand: “But how could you afford to pay so much more than your competition?” The answer, of course, is that good people pay by their extra productivity. You can’t afford to have cheap employees.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“It is better to be vaguely right than exactly wrong. —Carveth Read”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“To keep sales increasing during the mid-1970s, we relied on new ideas implemented in existing stores. This was my favorite form of growth. I don’t think that any given store ever fully realizes its potential. During those four years of no expansion in terms of number of stores, our dollar sales kept right on growing while the CEO of Trader Joe’s struggled with trying to reconcile good business practice with the Whole Earth Catalog. Whole Earth Harry indeed! In my private life, I had become an organic gardener. Few things have so enriched my life so much as my own personal conversion to organic gardening, something that I still practice except when the ants start raising colonies of aphids in my blood orange trees, and it’s Grant’s Ant Control to the rescue. In any event, the schizoid marriage of the party store with the health food store was a great success for Trader Joe’s, if not for the biosphere.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“Twenty-eight years later, the Economist of November 10, 1990, put it this way: . . . non-convex problems . . . are puzzles in which there may be several good but not ideal answers which classical search techniques may wrongly identify as the best one.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“The advent of the Apple Macintosh in 1985 made a tremendous improvement in publishing the Fearless Flyer. Using a piece of software called Adobe® PageMaker, we were able to dis-intermediate most of the printer’s function and produce camera-ready copy entirely in our office. Pat St. John, whom Alice recruited for us in 1986 as head of advertising, made a great contribution here, cutting lead time by almost a week. Anyone who has been in advertising can appreciate the nerve-racking problems of products that are advertised but didn’t arrive in time to cover the advertising. I would have had a coronary without the Macintosh, which had made it possible to expand the Fearless Flyer from twelve pages to twenty. This created all the more space to advertise products, but it also potentiated the coronary potential, and the almost-as-bad requirement for still more cartoons! Please remember: Trader Joe’s was a low-overhead operation with all of us wearing several hats. Sure, some of the above could have been done pre-Macintosh, but at vastly greater expense.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“Whether the mild paranoia generated by a name that few people can pronounce was a factor in my shaping Trader Joe’s, I leave to your judgment. Whether the substantial paranoia generated by being a left-hander in a right-handed world was a factor in putting a left-handed spin on Trader Joe’s, however, is beyond dispute. For some competitors, Trader Joe’s has been sinister in at least two meanings of the word.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“This massive increase in the mailing massively increased our advertising costs in the short run. I don’t believe, however, in advertising budgets that are based on a percentage of sales. You figure out the dollars needed to do the job right, and go ahead and spend them. As it turned out, the big sales generated by the Fearless Flyer dropped the cost of advertising as a percentage of sales after the fact. By the time I left Trader Joe’s, we were mailing millions of copies five times a year.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“The problem with a convenience store (a small store with a small inventory and few fixtures) is that it is hard to invest enough money to let the people be productive enough to justify high wages and benefits. I had put the cart—the high wages—before the horse—the convenience market. Perhaps, as the young lady from Stanford commented in 1986, I had done the right thing for the wrong reason. Much of my career was spent trying to find ways to pay the high wages to which I was totally committed. First we upped the investment ante by taking only prime locations, which could generate the most sales, even though the rents were higher.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“In 1935, in the pit of the Depression, when milk was being sold below cost, Merritt’s father had helped write the “milk control” laws, which partly govern California’s milk business (they have since been updated several times), especially the relations between the milk companies and grocery stores. After World War II, these laws increasingly were honored in the breach, as the big creameries and the big supermarket chains cut deals for illegal rebates or illegal financing or both. This is the normal result of quasi-fascist laws that try to regulate the marketplace. But in 1935, Benito Mussolini’s concept of binding state and industry together (the fasces is a Roman symbol, an ax with a bundle of sticks tied around its handle; the sticks represent the industries and the church, the ax represents the state, a one-for-all-and-all-for-one construct) was so popular around the world that Franklin D. Roosevelt tried to copy it with the Blue Eagle National Recovery Administration, until the Supreme Court threw it out in 1937. Relics of Mussolini, however, linger in all the states of the union, sometimes in milk control laws (and always in alcoholic beverage laws).”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“Carry individual items as opposed to whole lines. We wouldn’t try to carry a whole line of spices, or bag candy, or vitamins. Each SKU (a single size of a single flavor of a single item) had to justify itself, as opposed to riding piggyback into the stores just so we had a “complete” line. Depth of assortment now was of no interest. As soon as Fair Trade ended in 1978, we began to get rid of the hundred brands of Scotch, seventy brands of bourbon, and fifty brands of gin. And slowly (it was like pulling teeth) we dismantled the broad assortment of California boutique wines. No fixtures. By 1982, the store would have most of its merchandise displayed in stacks with very little shelving. This implied a lower SKU count: a high-SKU store needs lots of shelves. The average supermarket carries about 27,000 SKUs in 30,000 square feet of sales area, or roughly one SKU per square foot. Trader Joe’s, by 1988, carried one SKU per five square feet! Price-Costco, one of my heroes, carried about one SKU per twenty square feet. As much as possible I wanted products to be displayed in the same cartons in which they were shipped by the manufacturers. This was already a key element in our wine merchandising. Each SKU would stand on its own two feet as a profit center. We would earn a gross profit on each SKU that was justified by the cost of handling that item. There would be no “loss leaders.” Above all we would not carry any item unless we could be outstanding in terms of price (and make a profit at that price per #7) or uniqueness. By the end of 1977, we increased the size of the buying staff, adding one very key person, Doug Rauch, whom we hired out of the wholesale health food trade. Leroy, Frank Kono, Bob Berning, and Doug rolled out Five Year Plan ’77, which for purposes of this history I call Mac the Knife. Back in those days we had no idea how sharp that knife would become! We just wanted to survive deregulation. Everything now depended on buying. So here we go into the next chapter, Intensive Buying.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“But I hope you’ll consider the following, my favorite quote from my favorite book on management, The Winning Performance by Clifford and Cavanaugh: The fourth [general theme in winning corporations] is a view of profit and wealth-creation as inevitable by-products of doing other things well. Money is a useful yardstick for measuring quantitative performance and profit and an obligation to investors. But . . . making money as an end in itself ranks low. In 1994 Stanford Business School published a study of winning companies (companies that have endured for a hundred years) called “Built to Last,” which came to pretty much the same conclusion.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“A second news item, one from the Wall Street Journal, told me that the Boeing 747 would go into service in 1970, and that it would slash the cost of international travel. (It did: the real cost of going to Europe today is about one-fifteenth of what it was in 1950.) In Pronto Markets we had noticed that people who traveled—even to San Francisco—were far more adventurous in what they were willing to put in their stomachs. Travel is, after all, a form of education.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“I had some idea of what had to be done, thanks to all we had been learning during the previous six years—from breaking Fair Trade on imported wine, developing private label California wine, and busting the price of health foods and cheeses. But to an extent we were just like a little kid running around while being kept from harm by a kiddie-keeper. We were “protected” by price controls on almost 50 percent of what we sold. Now we were ready to throw off the leash.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“The willingness to do without any given product is one of the cornerstones of Trader Joe’s merchandising philosophy.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“The expansion of the Fearless Flyer to twenty pages was an important factor in the jump of Trader Joe’s sales after 1985. Down deep, the Fearless Flyer was an educational medium and hundreds of customers kept three-ring notebook collections of the issues so they could refer back to the articles. For years, we printed three rings on the cover. Equally important, however, it was an educational medium for our employees: A lot of our employees were under twenty-one; legally they could not have tasted the wines we were selling. So the Fearless Flyer was a sales tool for those employees. As we got deeper and deeper into vitamins, and FDA got goosier and goosier about claims by the health food industry, I didn’t want our employees to do any selling of vitamins and food supplements. When asked about a product, they were to refer to the Fearless, and a back copy file was kept at the store level for this purpose. (In 1993, Senator Orrin Hatch of Utah rammed a Magna Carta for health foods through Congress. The FDA hates the law, but all kinds of claims can be made now, which were impossible in my era.)”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“It is better to be vaguely right than exactly wrong. —Carveth Read If all the facts could be known, idiots could make the decisions. —Tex Thornton, cofounder of Litton Industries, quoted in the Los Angeles Times in the mid-1960s.
This is my favorite of all managerial quotes.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“Even the man who attempts to rule with janissaries depends on their opinion and the opinion which the rest of the inhabitants have of them. The truth is that there is no ruling with janissaries. As Talleyrand said to Napoleon, “You can do everything with bayonets, sire, except sit on them!” (The Revolt of the Masses, chapter 14, “Who Rules in the World?”)”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“[The problem with unions is not their pay scales; it’s their work rules and seniority rules.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“And by the spring of 1971, the caterpillar, Good Time Charley, had emerged from his chrysalis as Whole Earth Harry, a party store/cum health foods store.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“Word of Mouth: the Power of True Believers As everyone knows, word of mouth is the most effective advertising of all. Or, when in my cups, I have been known to say that there’s no better business to run than a cult. Trader Joe’s became a cult of the overeducated and underpaid, partly because we deliberately tried to make it a cult once we got a handle on what we were actually doing, and partly because we kept the implicit promises with our clientele. I used to work every Thanksgiving Day in one of the stores. They only let me bag, because I had lost all my checker skills. One Thanksgiving, a woman came in and asked for bourbon. I told her that we had none, because we had not been able to make the right kind of deal (this was after the end of Fair Trade, when we were deep in the Mac the Knife mode). “That’s all right,” she exclaimed. “I know what you’re trying to do for us!” Note the us. There aren’t many cult retailers who successfully retain their cult status over a long period of time. A couple in California are In ’n Out Burger and Fry’s Electronics. But across America, in every town, there’s a particular donut shop, pizza parlor, bakery, greengrocer, bar, etc., that has a cult following of True Believers. The old Petrini’s of the 1950s and 1960s had that status when it came to meat. Brooks Bros had that status until the 1970s. S. S. Pierce in Boston was another. But all of them failed to keep the faith. Beware of ever betraying the True Believers! The fury of a woman scorned is nothing compared with that of a betrayed cultee.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“By 1976, Trader Joe’s, the Whole Earth Harry version, had evolved into a rather effective, very profitable retailer, but still small. We had a few private label food products outside of nuts and dried fruits (in which there is very little brand demand) and cheeses (ditto). We were still reliant on selling branded food products, bought in ordinary quantities, which made aggressive pricing unprofitable.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“We emphasized “informative advertising,” a term borrowed from the famous entrepreneur Paul Hawken, who started publishing in the Whole Earth Review in the early 1980s. These informative texts were intended to stress how our products were differentiated from ordinary stuff. Please see the chapter on Private Label Products for examples of claims we made.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“In the meantime, the Kraft brown paper bag was invented about 1870, making it possible to put all your store-bought purchases in a paper bag, a phenomenon that even today is unusual in Europe.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“The principal purpose of this program was to vent grievances and address them where possible. And I think this program was as important as pay in keeping employees with us. Productivity in part is the product of tenure. That’s why I believe that turnover is the most expensive form of labor expense. I am proud that, during my thirty years at Pronto and Trader Joe’s, we had virtually no turnover of full-time employees, except for the ordinary human problems of too, too solid flesh.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“Shopping centers” are mostly a post–World War II phenomenon. The supermarket was then perfected by yet another set of wheels, when the shopping cart was invented in 1937.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“For artwork, I simply turned to nineteenth-century books and magazines, of which I built a large collection. I knew that (under the copyright laws of the time) works created prior to 1906 were no longer subject to copyright, so we were free to use the artwork. To create the cartoons, I would leaf through old sources until I found a cartoon that I thought would match the text. Much later, I learned from Robert Graves’s The White Goddess that what I was practicing was iconotropy, the deliberate misreading of images. Graves thought that a lot of myths had come from people misreading or twisting the meaning of the pictures on Greek vases. I spent the next nineteen years iconotropically creating those cartoons. They were at once a chore and a relief from the pressures of running the business. Best of all, they caught on with the public, and played a major role of establishing Trader Joe’s as a “different” kind of retailer, one that didn’t take itself too seriously.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“Give me a fruitful error any time, full of seeds, bursting with its own corrections. You can keep your sterile truth for yourself. —Pareto’s comment on Kepler, quoted by Stephen Jay Gould in The Panda’s Thumb”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys

“The ideal location I found for the first Trader Joe’s was a 1911 bottled water plant on Arroyo Parkway in Pasadena. My real estate broker—and a de facto member of Trader Joe’s top management—had one hell of a time negotiating the lease with an obdurate lawyer, Patrick James Kirby. Kirby was so tough that later Alice said if she ever got a divorce, she was going to hire Kirby. He liked that.”
― Joe Coulombe, Becoming Trader Joe: How I Did Business My Way and Still Beat the Big Guys