The Secret Life of Groceries: The Dark Miracle of the American Supermarket

by Benjamin Lorr

In the early republic, around the War of 1812, nearly 90 percent of the population worked to produce the nation’s food; it was a grueling physical life, and in addition to being costly, the food produced was of uneven quality, in tightly limited supply, and could and did kill through disease. Now less than 3 percent of our population produces enough food to feed us all. It is easy to wax poetic about food before the rise of industry—about eating the way our grandmother’s grandmother ate—but the fact is we spend less money than almost every other country in the world on food and we spend less time gathering that food than at any time in history.

The average store has 32,000 individuated products known as Shop Keeping Units, or SKUs. The biggest have more than 120,000 SKUs.

Born in Dallas from a series of ice docks, Southland invented the concept of the convenience store whole cloth. If that sounds absurd, get used to it. Innovations in grocery skirt an intellectual line where, on one hand, they seem so blindingly obvious you can’t tell if it’s abusive to true ingenuity to use the term “innovation” at all, or, on the other, whether they only appear that way because they have sprung so completely from the consumer unconscious that their absence is unthinkable once they are here.

Then, in the 1850s, corrugated cardboard: paperboard folded vertically in arches and smooshed between two horizontal planes like a sandwich. The interior curve gives the material a disproportionate strength. And so inside every flap of cardboard is the science of the cathedral, ten thousand vaulted arches distributing compression, allowing pulp to transcend into something lightweight, rigid, and, above all, cheap. It is the stuff of revolutions.

Customers would enter single file, pick up a basket, shuffle through a turnstile, and then head down a winding one-way route that would guide them past every item in the store, anticipating the hell of today’s Ikea by about fifty years. The path they were forced onto would pass only heavily branded prepackaged goods—items that could speak for themselves and didn’t need a clerk to recommend them—which customers could size up, fondle, select, and replace to their heart’s content. Finally, after winding through the store, the line would empty out at a bank of checkout counters where the customer could choose the shortest line and pay. It was an inverted assembly line with the customer as belt. And like the assembly line, it would reduce labor costs, cutting overall staff, and allow the owner to hire largely unskilled workers to do little more then fill shelves. One day, watching beady-eyed piglets charge a trough, Saunders decides the piggies are laughably similar to customers charging an overwhelmed clerk. In honor of all his piggy little customers, he names his new store the Piggly Wiggly.

As of this writing, Trader Joe’s has the single highest sales per square foot of any retail grocery chain, basically doubling its nearest competitor, Whole Foods.

Two different food safety experts I spoke with told me the unofficial FDA nickname for the chain is Recall Joe’s. And while the FDA won’t comment on that specifically, it’s clear from a survey of its publicly available list of food recalls that when it comes to quality assurance, the chain is anything but above average.

They named it Albrecht Discount, or ALDI for short. And then they went to work rebuilding. The result would be a grocery store every bit as revolutionary as anything conceived by Michael Cullen but uniquely suited to postwar Germany. Where American grocery achieved low prices by circus and frenzy, supersizing the physical footprint to increase sales volume, the Albrechts took an equally effective if opposite approach. They kept store size the same but shrunk their offerings to a tight core. Rather than leverage the new advances in manufacturing to fill out their store with products—creating that American paradise of choice—the Albrechts rode their manufacturers hard, pushing them to transform those same advances into simpler but cheaper products. It was low prices through stubborn practicality.

That fresh apple you bite into has typically been sitting in dormancy for close to a year. Red cherries, that epitome of summer freshness, might have been stuck stabilized for two and half months. Bananas, avocados, tomatoes, and limes land somewhere in between.

“People don’t realize Costco isn’t providing those demos. Whole Foods isn’t paying for the second one you get free,” an entrepreneur tells me. “It’s mandated. Companies are spending thousands and thousands of dollars to get their foot in the door. The retailer loves it because it makes the shopping experience more fun, but the young supplier is often bleeding.”

It turns out for as of yet biologically unexplained reasons, a female shrimp who loses a single eyeball gets fast-tracked through puberty, her ocular loss unleashing a cascade of hormones that begets ovaries in as little as three days. This was not predictable, nor does it fit with some grand anatomical theory of shrimp endocrinology, but it is very real. And some supremely attentive farmer noticed it and began snipping eyeballs off by hand in an attempt to replicate it. Soon, the process was studied and verified in the lab, and although nobody could quite explain “eyestalk ablation,” the quirky stride of science skipped merrily forward, pushing shrimp aquaculture into a new age.

1930 . . . the grocery store leaves him to take one final leap: Saunders, however, has an absolutely fascinating denouement, foreshadowing in form if not detail modern grocery’s thrall and capture by private equity and cost-obsessed bankers. He would never finish building his Pink Palace. Instead, with the ballroom half constructed, the swimming pool half filled, he gets pulled into a Wall Street power play. East Coast “short” sellers target the Piggly Wiggly, spreading entirely false rumors the chain is about to collapse, hoping to depress the stock price and make a quick profit. Saunders won’t have it. He cajoles a wide swath of southern bankers to loan him enough money to buy every single Piggly Wiggly share out there—to “corner” the market—and break the shorts by raising price. At this, he is unbelievably successful, pulling off what is generally recognized as the last true corner on Wall Street. The price of Piggly Wiggly shoots from $39 per share to $60, then—in a single morning—when Saunders demands delivery of all outstanding shorts—from $75 to $124. The shorts are ruined. The “boob from Tennessee” is triumphant. Right up to the moment the New York Stock Exchange decides to change the rules and bail out the shorts—many of whom likely sit on its board—by announcing a complete halt on all Piggly Wiggly trading. This gives the short traders a chance to track down the few outstanding shares Saunders hasn’t cornered. Agents are dispatched to faraway locations—the attic ...

The produce is hit-or-miss: This is probably the number one question I got while writing this book: Why is the produce at Trader Joe’s so shoddy when everything else there is so great? Without commenting on the latter portion of the question, my guess on the former is that it’s entirely intentional. In grocery, perishables are sold in tiers that reflect freshness. The shorter the shelf life, the cheaper it is. Traditional retailers won’t touch “short code” perishables; they will literally rot on their shelves. But by maximizing in-store turnover, i.e., the speed they flip their inventory, TJ’s can load up on it and offer unmatchable prices in the process. If it all goes well, the customer experience is flawless. Of course, even minor hiccups, and the short code stuff gets uneven quick. This emphasis on turnover also completes a largely hidden design feature of the chain: the crowded stores, the massive lines, the shelves that look ransacked in a pre-snowstorm, postapocalyptic manner at the end of an ordinary day, the extreme attention to demographics, even the stinginess of not opening a new store in an area that is begging for one, all begin to make sense. To function properly, a Trader Joe’s depends on extreme turnover: a base of shoppers intent on flooding its stores and devouring its entire inventory daily.

Later, when Boris Yeltsin made an unscheduled stop at a Randalls supermarket in Houston, Texas, during a tour of the Johnson Space Center in 1989, the experience was even more profound. “When I saw those shelves crammed with hundreds, thousands of cans, cartons and goods of every possible sort, I felt quite frankly sick with despair for the Soviet people.” He told his advisors that if the Russian people ever saw this, “there would be a revolution.” The raw shock in these remarks underscores the very real way that grocery—along with the World War II spending boom, unions, and the G.I. Bill—was directly causal to the rise of the American middle class.

The story of Charles Shaw—the notorious red wine Trader Joe’s rolled out at the mind-blowing price of $2 a bottle and sold into essentially unquenchable demand (up to 6,000 bottles a day per store, coming to represent a solid 12 percent of the total California wine market all by itself)—is almost a perfect embodiment of Joe’s entire ethos. It was built on the knowledge acquired by their wine program, and stares with a bull’s-eye back at their target audience—so devoid of character it achieves an almost frictionless drinkability, yet neither too sweet nor thin to inspire scorn. The buyer involved in the deal presented it to me as one deal among many, a longtime distributor pitching them an idea and TJ’s refining it to better hit their customers’ perception of value. And that seems exactly right: this was not some freakish stab in the dark that got proven right. Whole Foods, Walgreens, or Kroger all could have put out a $2 bottle of wine; none would have had the success of TJ’s.

At one point, tenure under Joe almost became a liability, the company bottling up far more human capacity than it had stores to place them. This surplus of qualified employees goes a long way toward explaining the success of TJ’s rapid expansion from 1990 to 2001, where it moved from a small-to-midsized highly regional chain of 30 to 40 stores to an aggressively growing national brand of 485 stores today. An expansion like that often kills a grocery chain, yet here it was a balm as hundreds of assistant managers found a route to advancement in a company they loved and would never leave but which had kept their talents confined. These were golden retrievers straining at the leash and when the reins were loosened it allowed the chain to go nationwide in a relative blink.

Sad but totally predictable note you already know in your heart: recycling in practice at WFs and every other grocery store I worked at for this book was entirely and hopelessly fucked. I don’t care what corporate claims, or the rhetoric in the training, trash at the fish counter got placed liberally in every bin, less the result of apathy, more from the blitz of the job/day. This was true of employees and customers alike, and inevitably each night most of the bags from the blue recycling bins would be taken and placed in exactly the same landfill dumpster as the bags from the gray non-recycling bins.