Print Story Trade Joe's May Avoid Right to Work States
Diary
By nlscb (Wed Jul 28, 2010 at 01:34:40 PM EST) (all tags)
I have lately been looking into moving to Texas.  I have grown very weary of the US Coastal and Northern European real estate markets, which command sky high rents and housing prices not justified by average salaries or lack of space to build housing and transportation infrastructure.   I am, however, aware that this will require sacrifices on my part.  In particular, I was wondering if there were any Trader Joe's in Texas.  It turns out that there are not any in Texas.  I found this peculiar.  Texas is handling the current economic downturn better than just about anywhere else on the planet.  It has 4 large metropolitan areas, one of which, Austin, seems like a natural place for Trader Joe's to set up shop.  Why did Trader Joe's skip such prosperous place?   I then remembered that Texas is right to work state, meaning that Texas prohibits agreements between trade unions and employers making membership or payment of union dues or "fees" a condition of employment, either before or after hiring.  I wondered if this might have something to do with it.  I suspect it does.  


My basic thesis is that Trader Joe's makes it money not through offering odd items like wasabi covered almonds, but by deliberately undercutting the prices of grocers that have unionized work forces.   In states with right to work laws, such grocers would be far and few between, leaving very little room for Trader Joe's to undercut the prices of existing retailers.  If my thesis has any validity, Trader Joe's would show a strong preference for setting up shop in non right to work states, while avoiding right to work states.  I took a look at states that have right to work laws and compared to a list of states that have Trader Joe's.  This is what I found:

Trader Joe's operates in 26 US states.  22 states are right to work states.  Trader Joe's only operates in 6 of the right to work states.

Now, this obviously does not prove that Trader Joe's deliberately attempts to avoid right to work states right now or will continue to do so in the future.  They right now are saying they will open in Nebraska.   As they grow more established, they may consider it worth their time to move into less lucrative markets. 
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Trade Joe's May Avoid Right to Work States | 24 comments (24 topical, 0 hidden) | Trackback
Speaking of Trader Joe's... by wiredog (2.00 / 0) #1 Wed Jul 28, 2010 at 02:41:13 PM EST
Theo Albrecht, Trader Joe's owner, dies.

Earth First!
(We can strip mine the rest later.)

truly an american icon. by aphrael (2.00 / 0) #3 Wed Jul 28, 2010 at 02:52:35 PM EST
Have you considered Ohio? by georgeha (2.00 / 0) #2 Wed Jul 28, 2010 at 02:51:30 PM EST
I think housing is even cheaper there than in metropolitan Texas. I don't know about Trader Joe's, but they have Huge Hawk, where you can buy anything.


Jobs in Ohio are scarce by nlscb (2.00 / 0) #15 Wed Jul 28, 2010 at 09:24:33 PM EST
I am looking for a place that combines affordable real estate (does not have to be the cheapest), low unemployment, and good transportation infrastructure.  Texas wins on all 3 by a mile.  I know of nowhere else that has embraced market priced toll roads like Texas has.


[ Parent ]
Columbus has a decent job market by lm (2.00 / 0) #18 Thu Jul 29, 2010 at 08:19:41 AM EST
Cincinnati isn't that bad.

And they do have Trader Joe's despite being a right to work fire state.

The Cincinnati area has something even better than Trader Joe's, Jungle Jim's. (Warning: don't click the link.)


There is no more degenerate kind of state than that in which the richest are supposed to be the best.
Cicero, The Republic
[ Parent ]
I don't buy this by ucblockhead (2.00 / 0) #4 Wed Jul 28, 2010 at 03:01:23 PM EST
My understanding is that Trader Joes cuts costs by simply not carrying items it can't negotiate to a low price and by ignoring major brands in favor of house brands.
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[ucblockhead is] useless and subhuman
who said they were the only ones? by nlscb (2.00 / 0) #5 Wed Jul 28, 2010 at 03:28:09 PM EST
Lots of other retailers do the same thing (Walmart, Target come immediately to mind).  I'm guessing that they like to avoid right to work states because in those states there are plenty of other grocers who follow the same idea.  They may get much more sales in non right to work states. 

Anyway, it's just a theory.


[ Parent ]
The difference by ucblockhead (2.00 / 0) #6 Wed Jul 28, 2010 at 03:57:48 PM EST
Trader Joes isn't selling generic versions that sit next to the branded version.  They've been able to sell their store brand as an actual brand, and it is generally alone on the shelf.  Yuppies who would never dream of buying a Walmart generic will happily buy "Trader Joes O's".
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[ucblockhead is] useless and subhuman
[ Parent ]
Their store brand by nlscb (2.00 / 0) #14 Wed Jul 28, 2010 at 09:19:58 PM EST
is often a re labled brand from whole foods.  Annie's salad dressing is the first example that comes to mind.


[ Parent ]
I live in a right-to-work state. by ammoniacal (2.00 / 0) #7 Wed Jul 28, 2010 at 04:08:53 PM EST
Later on, I'll decide which of the three TJ's within a 10-mile radius of me I'll buy dinner from, so I guess I don't have much sympathy for your "problem."

"To this day that was the most bullshit caesar salad I have every experienced..." - triggerfinger

Er, no. by Captain Tenille (2.00 / 0) #8 Wed Jul 28, 2010 at 05:29:44 PM EST
That does not seem to be the case. Didn't realize Trader Joe's wasn't union though; I find that a bit disconcerting in a grocery store.

---------

/* You are not expected to understand this. */


[ Parent ]
Ooops, wrong account? by ammoniacal (2.00 / 0) #9 Wed Jul 28, 2010 at 05:39:57 PM EST
What's not the case? Me shopping at TJ's?
'Cause I will, man. I will.

"To this day that was the most bullshit caesar salad I have every experienced..." - triggerfinger

[ Parent ]
Oh, you know what? by ammoniacal (2.00 / 0) #10 Wed Jul 28, 2010 at 05:45:43 PM EST
I seem to have transposed "right-to-work" and "at-will" in my head and inadvertantly trolled people. We regret the error.

"To this day that was the most bullshit caesar salad I have every experienced..." - triggerfinger

[ Parent ]
Don't feel bad by lm (4.00 / 1) #19 Thu Jul 29, 2010 at 08:58:07 AM EST
I just made the same mistake.

There is no more degenerate kind of state than that in which the richest are supposed to be the best.
Cicero, The Republic
[ Parent ]
Oddly by ucblockhead (2.00 / 0) #12 Wed Jul 28, 2010 at 07:13:26 PM EST
Trader Joes cashiers are always far more polite and happy seeming then those in the local Safeway.

I suspect that Trader Joes uses the "keep the unions out by making it a cool place to work" strategy.
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[ucblockhead is] useless and subhuman

[ Parent ]
i've seen that with WF, too by aphrael (2.00 / 0) #16 Wed Jul 28, 2010 at 09:52:18 PM EST
the WF cashiers seem to be much happier than the Safeway ones.

But then again, my local Safeway has among the country's worst customer service, and if they're willing to treat their customers like shit, i can only imagine how they treat their employees.
If television is a babysitter, the internet is a drunk librarian who won't shut up.

[ Parent ]
Trader Joe's by ucblockhead (4.00 / 1) #13 Wed Jul 28, 2010 at 07:39:05 PM EST
Texas also has by technician (4.00 / 1) #11 Wed Jul 28, 2010 at 06:53:02 PM EST
some very, very large grocers that have a ton of pull with the vendors. HEB and Whole Foods own probably 80 percent of the grocery market in the metro areas, and HEB has roughly 75 percent of it outside the metro areas.

So it could be that TJ just can't get their prices here.

this++ by clock (4.00 / 1) #17 Wed Jul 28, 2010 at 10:32:03 PM EST
having done time in the food biz I can say with no reservation that HEB is probably the smartest outfit I've ever heard of.  their house brand stuff is fantastic and sourced locally (whenever possible).  little to no windshield time for their stock means they can kill on margins.  they have their shit together.

...and they have wicked awesome ketchup...that central market organic kills in our house.


I agree with clock entirely --Kellnerin

[ Parent ]
Whole Foods started in Texas. by muchagecko (4.00 / 1) #20 Thu Jul 29, 2010 at 10:07:18 PM EST
They've probably got some sort of crazy deal that keeps TJ out.

It is Texas, afterall.


A purpose gives you a reason to wake up every morning.
So a purpose is like a box of powdered donut holes?
Exactly
My Name is Earl

[ Parent ]
Whole Foods started here in Austin by technician (4.00 / 1) #21 Fri Jul 30, 2010 at 01:10:04 PM EST
and yeah, the owner is a dick enough to have made some sort of blocking deal with vendors, but the more of it is, there's just not enough of a market here. Our biggest specialty stores (Specs for alcohol + gourmet items, Sprouts for a whole foods alternative) barely get enough traffic to stay open, because hey, there's an HEB four blocks away from me that has everything they have for less. That's four blocks in evil traffic and bad heat. I'm not driving much further than that for anything, thanks.

[ Parent ]
Specs barely stays open in Austin? by theboz (2.00 / 0) #23 Mon Aug 02, 2010 at 11:55:34 PM EST
We must have more fun in Houston then, because every time I walk into one, its packed.
- - - - -
That's what I always say about you, boz, you have a good memory for random facts about pussy. -- joh3n
[ Parent ]
The ones here are dead. by technician (2.00 / 0) #24 Tue Aug 03, 2010 at 03:22:31 PM EST
Dead as dead. Not as big an institution here as in Houston.

[ Parent ]
I don't know by duxup (2.00 / 0) #22 Sun Aug 01, 2010 at 03:37:30 PM EST
I have had some contact with folks who do work in real estate and moving chains into new areas.  It seems it is all pseudo scientific and a lot of laziness.  Some demand only specific demographics that even the most average of average regions just don't offer many of even if everything else would seem to indicate they should be there.  Others the developer(s) they like to work with aren't there, other times the developers they've grown to hate run a great deal of the region, other times their favorite suppliers aren't in that area, or again the suppliers they hate aren't there.  Same goes for transportation and other such business arrangements.  No idea on Trader Joes exactly, but some of the non logical choices are just laziness  / comfort related choices.

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Trade Joe's May Avoid Right to Work States | 24 comments (24 topical, 0 hidden) | Trackback