LOS ANGELES — In the foothills of La Crescenta, Calif., a small Trader Joe's grocery store was nestled in a strip mall of tiny shops and laundromats, a neighborhood institution for 43 years — and the second-oldest location for the popular grocery chain based in Southern California.
But taped on its doors in October were handwritten signs noting the end of its reign: "We're moving!"
When the location closed recently, most of its crew moved to the newest Trader Joe's, a built-from-scratch store in nearby Montrose that boasts more spacious aisles, higher ceilings and a trim brick-and-glass exterior.
After decades cultivating an image as the cozy neighborhood grocer, the new store highlights the conundrum facing the chain: how to maintain the eclectic, friendly vibe that has garnered it legions of faithful shoppers, while expanding at a brisk pace.
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The chain has expanded from more than 20 locations in Southern California in the 1970s to more than 360 shops in far-flung places such as New York, Chicago and Des Moines, Iowa. It recently opened its first Kentucky location in Louisville, and one is slated to open on Nicholasville Road in Lexington in 2012.
"Their mission is to be a nationwide chain of neighborhood specialty grocery stores," said Mark Mallinger, a Pepperdine University business professor who has done research on the company. "But there's a dichotomy there. It's like being a national chain of mom-and-pop stores."
Last year, the company pulled in an estimated $8 billion in sales, roughly on par with rival Whole Foods Market, based in Austin, Texas.
The new Montrose store features a private parking lot with more than 60 spaces, compared with the 40 slots shared by neighbors of the La Crescenta store. At 14,670 square feet, the new store is more than double the size of the old one. The extra floor space will enable the store to carry a greater variety of the low-cost, foodie-friendly offerings for which it is known. "We did not enter into this decision lightly," company spokeswoman Alison Mochizuki said.
The private company has been on an expansion binge the past three years, opening about 40 new stores a year, said Burt Flickinger of retail consulting firm Strategic Resource Group in New York.
The quirky roots of the company go back to Joe Coulombe, who opened the first Trader Joe's — still standing today —in Pasadena, Calif., in 1967. He sold the chain in 1979 to the Albrecht family in Germany, which also controls the Aldi supermarket chain in Europe. The Albrechts have owned Trader Joe's ever since and instilled an air of hush-hush secrecy to its business operations.
But Flickinger, who has followed the chain for decades, said the company seeks to expand the size of its shops by building new stores and also renting bigger retail spaces in new markets.
The average Trader Joe's store probably will increase from 10,000 to 15,000 square feet now to 15,000 square feet and bigger, Flickinger predicted.