This is Zack Fuss, an investor at Irenic Capital and today we are breaking down Trader Joe’s. Trader Joe’s is not a typical grocery chain. Their stores offer less choice, very few brands, constantly changing product lines, and no online option. Yet, they are adored and highly profitable. Their NPS score is industry leading and from what we can tell, despite offering lower prices, they generate more revenue per square foot than any dedicated grocery in the market.   To break down Trader Joe’s, I’m joined by Cristina Berta Jones, a long-time ecommerce and grocery investor who is now building an online supermarket business called Picnic. Together, we unpack the elements that have made this private grocery chain so successful for such a long period of time. Please enjoy this business breakdown of Trader Joe’s.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   -----   This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.   —--   This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database - Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Test Daloopa for free at daloopa.com/Patrick.   —--   Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt   Show Notes [00:03:16] - [First question] - Comparing and contrasting Trader Joe’s to conventional grocery stores and supermarkets  [00:06:05] - Where Trade Joe’s fits into the food retail market and their size and scale [00:09:36] - The different sections of a store layout and what it feels like to shop there [00:11:47] - How many stores there are and how that compares to other large scale food retailers [00:13:17] - Some of the most interesting parts of the history of Trader Joe’s [00:15:15] - How Joe applied his market observations to building the company  [00:21:12] - The evolution and success of Trader Joe’s private label brand [00:24:31] - Differences between US and European grocery markets and overview of what a hard discounter is  [00:28:25] - Unique and different strategies on slotting fees and trade spend [00:31:23] - Reinvesting their overhead savings to offer lower prices to their customers [00:33:04] - Success despite not being a store where one does a full basket shop [00:34:08] - The way that the pandemic and delivery services impact grocery stores  [00:37:17] - The crossroads many grocers face between physical and online stores [00:41:43] - What makes Trader Joe’s defensible  [00:44:51] - Trader Joe’s approach to shrinkage and having better margins than their peers [00:47:05] - Self-distribution and what separates them from their competitors  [00:48:30] - Lessons for builders and investors from Trader Joe’s story