Trade On Trader Joe’s Staff Advantages

It all began as a brotherly quarrel between retailers about selling cigarettes in their stores. Theo Albrecht thought it would be a highly profitable idea. Karl Albrecht was concerned that carrying cigarettes would cause high losses from theft. The disagreement became sufficiently disagreeable for the two to decide to go their separate ways when it came to opening up new stores. Theo went for Continental Europe, while Karl took the UK, Australia, and the U.S.
     You might recognize Albrecht as the name behind the highly successful Aldi chain. As it turned out, in 1979, Theo also became the name behind the much smaller California grocery chain Trader Joe’s. The brother who’d favored selling cigarettes grew a business customers associate with health.
     Now a survey of 6,600 consumers by Market Force Information finds that customers also associate Trader Joe’s with cleanliness, courtesy, accurate pricing, and fast checkout. Of the grocery stores assessed, it was at the top for “atmosphere.”
     A major reason is how retailers like Trader Joe’s treasure their talented staff. Pay for instance. At Trader Joe’s, full-time employees start at $40,000 or more per year. Sales per labor hour are more than 40% above that at an average grocery store, where starting salaries are about half as much.
     Benefits for instance. Another grocery chain, WinCo Foods, contributes 20% of an employee’s total yearly pay into a pension plan, according to an Idaho Statesman article. There are product clerks and cashiers who have retirement accounts in excess of $1,000,000. Full medical benefits are available to employees who average at least 24 hours per week. WinCo—a name suggested by the employees as a short version of Winning Company—is growing and popular.
     Researchers at Massachusetts Institute of Technology bemoan the profitability opportunities retailers miss when they shortchange staff on income, employee benefits, availability of full-time hours, predictable work schedules, in-service training, and opportunities for promotion. Among the retailers they studied, for every $1 bump up in payroll, monthly sales rose between $4 and $28.
     The MIT researchers spotted a particular danger with retailers who set expenditures for employees as a percentage of sales. When sales drop, staff are paid less and there are fewer work hours for the next time period. The rear-view-mirror fallacy is that the retailer is assuming sales won’t increase in the months ahead if there are staff working who are dedicated to the store’s profitability.

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Treasure Your Talented Employees