It’s so, Joe’s

Chain grocer is about to sign lease in Chico

WHO KNOWS, JOE? <br>It’s anyone’s guess where Trader Joe’s will set up shop in Chico, but real-estate insiders hear it’s in the vicinity of the North Valley Plaza.

It’s anyone’s guess where Trader Joe’s will set up shop in Chico, but real-estate insiders hear it’s in the vicinity of the North Valley Plaza.

Photo By Tom Angel

Joe money:
Trader Joe’s says it pays its “crew members” above union wages: between $8 and $12 an hour for entry-level part-timers and an average of $21 an hour company wide. It starts supervisors at around $40,000 a year. Besides a benefits package, the company puts an amount equivalent to 15.4 percent of employee wages into a retirement plan.

The rumors are for real. Trader Joe’s is coming to town.

“We really like Chico, and we are hoping to be in the market,” said Jon Basalone, vice president of marketing for the Monrovia, Calif.-based chain. “We are actively pursuing some opportunities.”

Basalone confirmed that, while the company has yet to sign a lease, it plans to do so soon. As for actually opening, “The exact date has not been determined.”

Company employees have been told that the goal is to get the store open by October. Basalone said if that’s truly the case, and such a deadline can’t be met, Trader Joe’s would hold off until after the holiday season.

There’s space at the old Albertson’s on Pillsbury Road as well as a cozy spot within the mall itself.

Photo By Tom Angel

The News & Review called seven Trader Joe’s stores in California, with callers stating that they were curious Chico residents rather than reporters, and each confirmed that the information had come out in a management newsletter. The company gives employees a heads-up on store openings, in case they want to transfer.

The North Valley Plaza area, within an existing building, has been tabbed by locals within the real-estate community as the most likely spot for the new store.

For years, the possible arrival of Trader Joe’s to the Chico market has been the hottest rumor in town.

Trader Joe’s began in 1958 as a chain of convenience stores in Los Angeles and in 1967 expanded to involve a nautical theme. In 1979 it was purchased by German billionaires Karl and Theo Albrecht. The company buys in bulk and secures private-label deals, resulting in relatively low prices on a variety of groceries and other products. The company, which grosses $2.5 billion in annual sales, reports sales growth averaging 23 percent a year since 1990.

Trader Joe’s has a reputation of treating its employees well, and interesting marketing approaches add to the feel-good factor. Despite the fact that the company has about 215 stores in 19 states, it manages to sustain a non-chain feel and a fiercely loyal following.

Trader Joe’s cuts costs by offering its own labels.

Photo By Tom Angel

The new addition could spell trouble for S & S Produce, which has been locally owned since its start in 1967, and for Chico Natural Foods, a cooperative that’s been in business for 30 years and focuses on organics.

S & S co-owner Rich Stewart said he doesn’t see Trader Joe’s as direct competition, because of S & S’s custom butcher shop, barbecue, selection and ability to do special orders. “We try to take care of our customers as best we can, and I don’t know how we’d really change that,” he said.

“I think the concern should be anytime a corporation comes to town … the money doesn’t stay in Chico. That money will be sent to their headquarters, where they will use it to open up another store in another state,” he said.

CNF General Manager Rachel Oriana Schraeder echoed Stewart’s concerns about shopping locally but also said Trader Joe’s is not the same type of store as hers. “I see them as competition for our consumer dollars,” she said.

While Trader Joe’s doesn’t market itself as a natural-foods store, the outlets do carry some of the same products as S & S and CNF—and often at much lower prices. The trade-off, Stewart said, is variety. “We have six to eight varieties of Barbara’s cereal, and they may have two,” he said, and the Trader Joe’s selection changes from week to week. “It’s kind of like Costco, in a way.”

Schraeder said Trader Joe’s is “able to garner low prices because they buy closeout items.”

“It’s important for people to think about how and where they’re spending their money,” she said. “[Trader Joe’s] is a nice business, and they have a lot to offer, [but] making a purchase at Trader Joe’s is certainly not a sustainable purchase.”