« Freakonomics Radio

359. Should America Be Run by … Trader Joe’s?

2018-11-28 | 🔗

The quirky little grocery chain with California roots and German ownership has a lot to teach all of us about choice architecture, efficiency, frugality, collaboration, and team spirit.

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
If you like to listen to freak animals, radio without ads the place to do that is still premium five dollars a month and you can get a free month trial by going to stick your premium dot com and use a promo code freak. You also get access to all our bonus. Episodes and you'll be supporting our show to that still premium dot com, promo code, freak, thanks. Let's play shark tank today, you're the investors shark tank. Dont know. Is the tv show where people pitch business ideas to famous investors, you might be marked cuban or MR wonderful you're trying to side? Would you invest, and that is Michael Roberto business, professor at Bryant University, formerly of the Harvard Business School, there's one lecture he likes to start. giving his students this fictional shark tank pitch I'd. Like to open a new kind of grocery store
we're. Not gonna have any branded items, it's all gonna, be private label. We're gonna have a note. Which in advertising and no social media whatsoever We're never gonna have anything on sale. We're not going to accept coupons, what no loyalty card We won't have a circular that appears in the Sunday newspaper will have no self check out We won't have wide isles or big parking lots. Would you invest in my company and, of course, Europe the think there is no way at invest in that company. That sounds like the stupidest company ever and, of course, it a lot. Consternation! That's when Roberta reveals that not only does such a grocery store already exist, but there crushing the competition there at the top by a wide wide margin. They sales per square footage estimate our unbelievable means three and four times better than some of the leading players in the industry. So sounds like customers loved this place, but you might think astray
this would be brutal to work for and yet its ranked among the hundred best american companies work. For so what's it called trader, chose trader gesture Jos trader Joe strange as I do love trainer chance. There is a good chance. You have never Shopton Trigger Jos, maybe never been heard of it. Scott fewer than five hundred stores the Bay chains like Kroger and Albert sins have well over two thousand Walmart cells, groceries more than four thousand vit stores. And, as Michael Roberto told us trader, Jos doesn't advertise or do a lot of things. The typical grocery store. Does that typical grocery store has askew count few stands for stock keeping units. A number of different items carried in a store. What's vaguely grocery store up a supermarket might have thirty five thousand scheme.
Right. A tremendous selection and variety you gotta traders shows they only have say three thousand start keeping units of the typical trader chose. The grocery business is famous for low profit margins, lots of competition and lately and even bigger problem. the first time in history. American consumers are spending more money in restaurants and bars in grocery stores. Trader Jos seems to be bucking this downward trend. It doesn't just have customers, it has fans? The first thing I do when I know I'm going somewheres get on that and find where the closest trader choses. It's never been easy to run a grocery chain, the trader Those makes it look easy and weirdly fun I dont want ended trader Jos with eight wrong to do list? It's not a chore. When I walk the train, Jos, it's a variety seeking exercised! So suddenly do it! That's the question
try to answer today. A question made more difficult by the fact that trader Jos is a fairly secretive company Some of the secrecy is probably due to who owns them. So we put on our frequent mix goggles in an attempt to reverse engineer the secrets of trader Jos, which it turns out, are incredibly
Transcript generated on 2021-01-20.