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Trader Joe’s: Assessing the Competition

Aside from the charm and relaxed atmosphere, Trader Joe’s Company, BB #:162286 Monrovia, CA, is a tried and tested business model honed over six-plus decades.

It is a serious rival to other supermarkets, from national and regional chains to independents and specialty retailers—though reportedly the fun-loving chain regards few of these businesses as a threat.

Phil Lempert, retail consultant for Supermarketguru.com in Santa Monica, CA, says Trader Joe’s is different, so most other retailers aren’t even in the same category.

The exceptions, he points out, would be Grocery Outlet, headquartered in Emeryville, CA, and ironically, Aldi (owned by German company Aldi Süd, and not Trader Joe’s parent company Aldi Nord).

Both Aldi and Grocery Outlet have limited brands, great quality, and value pricing—which is what sets them apart and similar to Trader Joe’s.

Bill Bishop, cofounder and retail consultant for Brick Meets Click in Barrington, IL, doesn’t see either as a strong rival.

“Trader Joe’s is uniquely positioned in the market and isn’t seriously threatened by any direct competition.”

This comfort level is evident in its business practices, especially in one big difference between Trader Joe’s and most other retailers: “It’s the only grocer we know that’s made a conscious decision not to go into ecommerce.”

With much of today’s growth in grocery coming from online ordering, delivery, and pickup, Bishop says Trader Joe’s appears to be satisfied with its in-store sales.

Lempert agrees, noting the chain’s opposition in favor of continuing its “fabulous in-store experience.”

The pandemic, however, may force the issue if customers begin to go elsewhere. In that case, Lempert says, the grocer “will have to do something to keep up with other retailers. What that something is, I don’t know, but it will be with a Trader Joe’s twist.”

This is a feature from the cover story of the March/April issue of Produce Blueprints Magazine. Click here to read the full issue.