Mr. John V. Shields Jr., a retail executive who transformed Trader Joe’s from a quirky Southern California grocery store chain into a billion-dollar enterprise with dozens of still-quirky but uniformly organized grocery stores across the country, died Oct. 31 in Thousand Oaks, California, the New York Times reports. He was 82.
His death was announced by his family. No cause was given.
Mr. Shields was named chief executive of Trader Joe’s in 1989, when the company was renowned mainly for having broken so many retailing rules in becoming a successful small chain, with most of its stores in and around greater Los Angeles.
Equal parts gourmet shop, discount warehouse and Tiki trading post, it had remained small rather than expand. It paid workers generously compared with other grocery chains, and it protected its image as a homespun neighborhood store by eschewing improvements—like public address systems and checkout scanners—that might undercut it.
Besides selling staples, it had broadened its customers’ palates with exotic, low-cost offerings (raspberry salsa, frozen mango cubes, Taiwanese black tiger shrimp) that appeared on the shelves and disappeared from day to day, depending on availability and market price.
Mr. Shields was doubtful at first that Trader Joe’s whimsical retail model would travel well. His predecessor, Joseph H. Coulombe, the company founder, had painstakingly located its first 27 stores in laid-back pockets of Southern California where well-educated but moderately paid people lived. (Coulombe once said the ideal Trader Joe’s customer was “an unemployed Ph.D.”)
But by tacking in the same direction, Mr. Shields expanded the company’s reach across the country, establishing stores in college towns and gentrifying communities from Phoenix to Boston. By the time he retired in 2001, he had increased the number of stores to 158, from 27, and brought annual sales to $2 billion, from $132 million. The company, which has been owned since 1979 by Aldi, a private German retail giant, now has more than 400 stores.
Mr. Shields, who had no experience in the grocery business when he was hired, was a more traditional corporate executive than Coulombe, a lifelong friend who picked Mr. Shields as his successor.
Where Coulombe was intuitive and pathbreaking, Mr. Shields was credited with creating the management system that made the company’s retail culture exportable. He standardized the layout of stores, started a management training program and brought market analysts into the decision-making process, innovations that made Trader Joe’s one of the nation’s most profitable grocery chains, according to one study, though because it is privately held actual figures are scarce.
To maintain the quirky retail gestalt in stores opening outside Southern California, Mr. Shields dispatched about 25 veteran employees to indoctrinate the local hires: They were to wear the trademark untucked Hawaiian shirt and jeans. They were encouraged to smile a lot, interact with customers and practice an order of sunny solicitude that sometimes, at least early on, proved annoying to customers unfamiliar with the tradition.
“They look at you like, ‘What’s the catch?’” one goateed employee flown in from Culver City in 1997 to help establish a store in Scarsdale, New York, told a Los Angeles Times reporter. Mr. Shields also personally interviewed store manager candidates in the early years of the expansion. Applicants who did not smile in the first 30 seconds, he once said, were crossed off the list.
Mr. Shields was born in Illinois on March 23, 1932, and raised in San Mateo, California. He earned a bachelor’s degree in 1954 and a master’s degree in business administration in 1956 from Stanford University, where he and Coulombe became close friends and fraternity brothers.
Survivors include his sons John III and Michael; his daughters Kathleen Shields and Karen Haake; and five grandchildren. After serving in the Army, Mr. Shields worked for 20 years at Macy’s West, rising through the ranks to SVP before leaving in 1978 to join Mervyn’s, a California-based department store chain.
Coulombe hired him as president of Trader Joe’s in 1988 and named him chief executive on Jan. 1, 1989.
“We are not a conventional grocery store,” Coulombe said when asked about his chief’s lack of experience in groceries. “We’re closer to the fashion business than the supermarket business.”
Hiring the right employees was the key to his success, Mr. Shields told interviewers. Training helped, but ultimately a person was either made to be part of the “crew,” as Trader Joe’s employees are known, or he or she was not. And he conveyed that message bluntly in employee orientation sessions.
“I would talk with the new people for about two hours,” Mr. Shields said in a 2002 interview with the “Graziadio Business Review,” a journal of the Graziadio School of Business and Management at Pepperdine University in Los Angeles, “and I always ended up saying, ‘Look, at the end of 30 days, if you are not having fun, please quit.’”