Trader Joe’s Founder Joe Coulombe on Stew Leonard’s Inspiration

How did you improve efficiency?

I’d heard about a famous grocery in CT, Stew Leonard, who operated with only 800 SKUs … a “SKU” is a “stock keeping unit” … that means a single size of a single flavor of single product … we’d been operating with about 6000 SKUs available … Stew was doing 100 million in a single store … 800 SKUs … and this 1977 so this like 180 million today … and so we adopted a 5 years plan in 1977 and we said and the end of this we will not carry anything unless we can be outstanding in it and to get there we are going to have slashed the number of SKUs down to only those products that we have such deep product knowledge that we know as much as the vendors and by the time I left Trader Joes we had it down to 1100 SKUs.”