People in Hawaiian T-shirts. Delicious fresh fruits and
vegetables. A place where parking is tight and aisles are tiny. A
place where you will be unable to find half the things on your list
but will go home satisfied. We are, of course, talking about Trader
Joe’s (a privately held company), a unique grocery store
headquartered in California and located in 22 states. By selling
store-brand and gourmet foods at affordable prices, this chain
created a special niche for itself. Yet the helpful employees who
stock the shelves and answer questions are definitely key to what
makes this store unique and helps it achieve twice the sales of
traditional supermarkets.
Figure \(\PageIndex{1}\): Paul L Dineen – shopping cart
harmonic convergence II – CC BY 2.0.
Shopping here is fun, and chatting with employees is a routine
part of this experience. Employees are upbeat and friendly to each
other and to customers. If you look lost, there is the definite
offer of help. But somehow the friendliness does not seem scripted.
Instead, if they see you shopping for big trays of cheese, they
might casually inquire if you are having a party and then point to
other selections. If they see you chasing your toddler, they are
quick to tie a balloon to his wrist. When you ask them if they have
any cumin, they get down on their knees to check the back of the
aisle, with the attitude of helping a guest that is visiting their
home. How does a company make sure its employees look like they
enjoy being there to help others?
One of the keys to this puzzle is pay. Trader Joe’s sells cheap
organic food, but they are not “cheap” when it comes to paying
their employees. Employees, including part-timers, are among the
best paid in the retail industry. Full-time employees earn an
average of $40,150 in their first year and also earn average annual
bonuses of $950 with $6,300 in retirement contributions. Store
managers’ average compensation is $132,000. With these generous
benefits and above-market wages and salaries, the company has no
difficulty attracting qualified candidates.
But money only partially explains what energizes Trader Joe’s
employees. They work with people who are friendly and upbeat. The
environment is collaborative, so that people fill in for each other
and managers pick up the slack when the need arises, including
tasks like sweeping the floors. Plus, the company promotes solely
from within, making Trader Joe’s one of few places in the retail
industry where employees can satisfy their career aspirations.
Employees are evaluated every 3 months and receive feedback about
their performance.
Employees are also given autonomy on the job. They can open a
product to have the customers try it and can be honest about their
feelings toward different products. They receive on- and
off-the-job training and are intimately familiar with the products,
which enables them to come up with ideas that are taken seriously
by upper management. In short, employees love what they do, work
with nice people who treat each other well, and are respected by
the company. When employees are treated well, it is no wonder they
treat their customers well daily.
Based on information from Lewis, L. (2005). Trader Joe’s adventure. Chicago: Dearborn Trade;
McGregor, J., Salter, C., Conley, L., Haley, F., Sacks, D., &
Prospero, M. (2004). Customers first. Fast
Company, 87, 79–88; Speizer, I. (2004). Shopper’s special.
Workforce Management, 83, 51–55.
Discussion Questions
How much of Trader Joe’s success can be attributed to the fact
that most larger chain grocery stores do not sell the type of food
available at Trader Joe’s?
Is pay enough of an incentive to continue at a job you do not
enjoy?
Trader Joe’s promotes entirely from within the organization.
This means that if you are a good, dedicated worker, you can rise
up within the company. Do you feel employees would be as dedicated
to the company if this were not the case? Would high pay be enough
to keep employees? What if the company only promoted from within
but pay were not as good?