David Rosenthal: observation

Transcript context

…Yes, it's a partnership, but it's not a great partnership because as soon as the CPG product becomes so wildly differentiated, they're going to start commanding—somehow squeezing more in the value chain. Or, let's say the grocery store got differentiated, they're going to start squeezing more in the value chain. Trader Joe's has been a 50-year exercise to ensure their independence, where no one has leverage over them. Individual little things, like a landlord, has leverage over them in a store negotiation, or a supplier does for a given SKU. But at scale overall, Trader Joe's is really, really resilient from external things that could dramatically shake their business. They've built—I think we talk about this a lot—stored potential energy in their business that just makes them more resilient. And it's crazy that the Internet happened, and it hasn't been bad for them. They've grown just as fast in the Internet era as the non-Internet era. It's hard to imagine things that could shock them more. There is the perfect existence proof of this in COVID. Pretty much the only way that all other grocers could deal with COVID was Instacart or doing their own delivery, which Instacart actually powers a lot of now as a white-label service, which is fascinating. But anyway, Trader Joe's said, "Nope, we're just not going to do that. We're going to find a way to operate our stores during COVID," and they didn't miss a beat. Yep. So my question for you to close this out is: how important do you think private ownership is to making all this work? Because on our Rolex episode, we said it's really important that they're owned by a foundation. And on our IKEA episode, it said it's really important that it's family and foundation-controlled. And on our Mars episode, we said it's really important—is it really important that they're not a publicly traded company?…

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