To get inside the mysterious world of Trader Joe’s, Fortune spent two months speaking with former executives, competitors, industry analysts, and suppliers, most of whom asked not to be named. What emerged is a picture of a business at a crossroads: As the company expands into new markets and adds stores — analysts say the grocer could easily triple its size in the coming years — it must find a way to maintain its small-store vibe with customers. “They see themselves as a national chain of neighborhood specialty grocery stores,” says Mark Mallinger, a Pepperdine University professor who has done research for the company. “It means you want to create an image of mom and pop as you grow.” That’s no easy task. Just ask Starbucks (SBUX, Fortune 500) CEO Howard Schultz, whose expansion has been a huge success but has come at the expense of credibility with some coffee aficionados. The alternative is to remain a small brand with unflagging devotees, like outdoor clothier Patagonia. If it can get the balance right, Trader Joe’s may be one of the few retailers to marry cult appeal with scale. Just don’t expect anyone from the company to talk about it.
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By David Goodman
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David, a licensed PA & NJ real estate agent, “runs with” Equity Retail Brokers in Plymouth Meeting, PA. He spends most of his time leasing shopping centers for the likes of Kimco Realty, Echo Realty, The Gambone Group, Hilton Realty, Hutensky Capital Partners and others. David also represents select regional and national retail tenants, sells bank-owned properties and blogs about the supermarket industry. Equity Retail Brokers provides comprehensive retail real estate services through the company’s sales, leasing, tenant representation and asset management divisions. David is left-handed and his brother is a Mason.