Unconventional Business Model

Trader Joe's operates in a unique space within the grocery industry by focusing solely on private label products, which constitute about 80% of their inventory. This model allows them to maintain competitive pricing and exert greater control over their supply chain, thus reducing reliance on brand-name suppliers. By carrying around 3,000 SKUs compared to the typical supermarket's 35,000, they simplify the shopping experience and can better manage inventory. This efficiency contributes to their impressive sales figures, achieving roughly $1,750 in sales per square foot, which is significantly higher than larger competitors like Walmart and Kroger.