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Why You Spend So Much Money At Trader Joe’s

Why You Spend So Much Money At Trader Joe’s

They just have those random little things that you didn’t really know you ever wanted and then can’t somehow live without. Today we are going to Trader Joe’s. Trader Joe’s. Trader Joe’s. Trader Joe’s. The gingersnap cookies. The babka is unbelievable. Coconut rolls. Those are my favorite things I’ve ever had in my life. The little signs with the corny jokes on them. Is that crazy to say like it just has a better vibe? People love Trader Joe’s. They really do. Welcome to Trader Joe’s, where super friendly workers help you shop for things like kale gnocchi and vegan tikka masala. Trader Joe’s calls itself your neighborhood grocery store, except it’s grown way beyond your neighborhood to over 500 stores nationwide.The late founder Joe Coulombe opened the first location in Los Angeles County in 1967. He then sold Trader Joe’s to grocery giant Aldi in 1979. The quirky grocery brand hasamassed a cult following among health and value conscious shoppers. It’s so addicting. Prices and quality put together is unmatched pretty much anywhere else. Experts estimate Trader Joe’s outsells all of the competition when it comes to sales per square foot. The company brought in estimated total sales of $13.7 billionin 2019. I’m at Trader Joe’s right now. The fan fervor around Trader Joe’s has consumers begging for more, even starting petitions for new locations. There are none nearby. And I’ve begged and beseeched. There are even Instagram influencers dedicated to Trader Joe’s products. In terms of overall customer satisfaction, Trader Joe’s was the highest ranking national brand in Consumer Reports’ 2019 ranking of grocery chains. Customers report high levels of satisfaction despite the fact that Trader Joe’s is not necessarily convenient or a one-stop shop. It has a limited selection of meat, produce and toiletries, and there’s no deli, self-checkout, online shopping or delivery service.Sometimes I feel like they’re missing key things that you need to like make dinner. I get it.I know I could get a larger and more affordable selection of my diet staples like meat and produce somewhere else. In fact, I live right next door to another major grocery store.But twice a month I travel 100 blocks to shop at Trader Joe’s on72nd and Broadway in New York City. I wait in massive lines at what’s officially the busiest Trader Joe’s in the United States. Then I carry two heavy bags up and down four flights of stairs between the subway and my apartment. Trader Joe’s may not be the very best all around grocery store, but it’s not trying to be. The company does certain things so well, it’s built one of the most passionate fan bases in the grocery business. Here’s how. The thing that’s preposterous, right, is it’s the anti grocery store. I often say imagine that I was pitching to investors the concept of a new grocery store. And I said, we’re gonna have virtually no branded goods. Nothing’s ever gonna be on sale. There’s no coupons. There’s no loyalty card. No self-checkout. We’re going to have cramped aisles and small stores with limited selection. No TV ads. Would you invest? And people of course go, “No. That sounds crazy.” Trader Joe’s doesn’t draw customers in with wide shiny aisles or high tech shopping. The company does minimal marketing and didn’t have a social media presence until just a few years ago. Trader Joe’s presents itself as a quaint local store. Everything is hand-drawn, handwritten, and that gives the store a very kind of low-key personal feeling. It also gives a feeling that you’re kind of in a market or a local store that is not overly commercial. Trader Joe’s has I think really captured the culturalzeitgeist in a way as far as not only tapping into the foodie culture, but then also kind of the movement away from traditional and established national or global brands and overly processed or produced food. The neighborhood market atmosphere helps shoppers feel that they’re making healthy and environmentally friendly choices. In terms of sustainability,people have this warm, fuzzy feeling and it’s kind of reflected in the packaging. Mark Gardiner is a former marketing executive who became intrigued by the Trader Joe’s brand. So he worked as a crew member, stocking shelves and ringing up customers at a Kansas City, Missouri location for a year starting in 2011. Then he wrote a book about it called Build a Brand like Trader Joe’s. Gardiner says Trader Joe’s might look like a local store, but its environmental impact is not necessarily better than other grocery chains. When I worked there, we had a product that was naan bread and the naan bread was baked and frozen in India and shipped frozen to Trader Joe’s stores. That’s pretty crazy. You can bake naan bread anywhere. Trader Joe’s has made efforts to be more environmentally friendly, sometimes when under public pressure. Trader Joe’s may not operate just like a local market. But the experience of being at one helps us feel good about our shopping decisions. The unique products that are only available at Trader Joe’s. Zhoug sauce. Haven’t seen that anywhere else except Trader Joe’s.Teeny tiny avocados. I feel like nobody else has those little avocados. Trader Joe’s presents itself as a local store, but one with worldly connections. Founder Joe Coulombe gave the store a south seas theme, complete with Hawaiian shirt clad employees who are called captains and crew members. The theme plays upon the idea of merchants sailing the oceans to bring home diverse foods from around the world. Trader Joe’s product developers travel the world seeking inspiration for these recipes. They discuss trips to NewZealand, Japan, the Republic of Georgia and beyondin an episode of the official company podcast. They present their products as if they are local discoveries, something that someone found when they were, let’s say, traveling Italy and they’re now bringing it to you. The result?Trader Joe’s products feel specially sourced, truly unique, and like they can’t be found in other grocery stores. The products seem even more one of a kind due to a generous use of descriptive adjectives. They don’t just have cheddar cheese. They have Wisconsin farmhouse cheddar cheese. Or, you know, their gummy bears aren’t just gummy bears. They are fish shaped. And so they’re called Scandinavian swimmers. Customers want to feel like they are smart shoppers. If you can make them feel like they are in the know or that they have found something that other people haven’t, then that really increases the value perception that they get from the price. When an exotic new product comes out, you might get your hands on it or you might not. What makes Trader Joe’s products seem even more special is they come and go. Trader Joe’s regularly introduces new products and then discontinues others since the stores are relatively small and shelf space is limited. So there’s also this issue of scarcity. If I like the item, buy it now. I’m not sure it’ll be here next month. There is an element of impulse shopping that’s going on right because of the treasure hunt. There’s a sense of discovery — of things that feel rare and urgent.Sometimes when I come home from Trader Joe’s, I find myself telling my husband everything I bought. And your favorite lava cake. It’s almost like I’m bragging to him, like, look what I found. And the process of making those discoveries is fun, too, because it’s not too overwhelming. Trader Joe’s stores are typically 10,000 to 15,000 square feet in size. The average grocery store is about 40,000 square feet, while supercenters like Walmart or Costco can exceed 200,000 square feet.Trader Joe’s stores carry about 4,000 SKUs or scannable units of inventory. The average grocery store carries about 30,000 SKUs, while supercenters can hold four times that. Researchers say too many choices can lead to paralysis. It’s easier to decide what you want when choosing from a smaller selection of items like at Trader Joe’s. What customers really want is they want the perception of choice, but they want the experience of no conflict, of less choice. They want an easy choosing experience. Sheena Iyengar conducted a well-known experiment that studied just that. In the study, Iyengar set up a jam sampling station at a grocery store. She found that more people purchased jam when there were less options to choose from. Customers also feel more confident they chose the best of what was here. So the entire experience makes them feel both more competent as well as more confident. What Trader Joe’s doesn’t want you to know is that you can find very similar or identical products at other grocery stores. The company sells more than 80 percent private-label goods, meaning they’re made by third party manufacturers and sold with Trader Joe’s branding. And Trader Joe’s is notoriously secretive, especially about who their suppliers are. That way you don’t know where their products really come from. They don’t want customers to feel that they have an alternative way to get the same thing. But in some cases, they actually could. Trader Joe’s sources some of its products from major manufacturers that make all kinds of familiar goods. And some of those goods under different brand names may actually be similar or identical to the private label version sold at Trader Joe’s. For example, a 2017 Eater investigation found that Naked Juice, a subsidiary of PepsiCo, has provided Trader Joe’s with bottled smoothies. And when you compare a couple of Trader Joe’s smoothies with their naked juice counterparts, the ingredients are nearly identical.But Trader Joe’s can also have exclusive supplier relationships. I know when I worked there, there was a frozen pizza from Italy and it was a little family in Italy somewhere that made the pizzas. And Trader Joe’s was their only customer. That is obviously not the case for most products. Now Trader Joe’s does prefer, if possible, to tweak the recipe so that technically they can say, ok look, this is completely unique to us.The media expected there to be some backlash towards this idea that Trader Joe’s was trying to pretend as if these products with their own. But I think that what consumers discovered is, you know what, I’m going to get the same product at a lower price and a better shopping environment at Trader Joe’s. After all, one of the grocery store’s biggest draws? The prices are amazing. Joe Coulombe established Trader Joe’s in the 60s with a certain customer in mind. Coulombe said he created Trader Joe’s to cater to the increasing numbers of people getting a college degree. It’s the person who has good taste perhaps, who likes to try new things but doesn’t necessarily want to spend a great deal of money.So how does Trader Joe’s keep prices down? By keeping its costs down. For one thing, Trader Joe’s sells mostly private-label goods which are cheaper than name brand goods like Haagen-Dazs ice cream or Starbucks coffee. Experts say Trader Joe’s is also able to negotiate better pricing from suppliers by purchasing goods in larger quantities. After all, Trader Joe’s offers a smaller selection of products than traditional grocery stores and thus sells larger quantities of each item. It’s also possible that Trader Joe’s has help from a corporate parent, Aldi. Aldi could leverage its relationships with suppliers to help Trader Joe’s get better pricing. Despite all these cost saving measures, experts say Trader Joe’s isn’t necessarily cheaper than other discount grocery stores. It just feels especially cheap. I’m not sure if it’s so much the reality of a big price difference as it is the perception that you’re getting a better value from Trader Joe’s. You’re getting higher quality ingredients, you’re getting a better edited selection, you’re getting a much more pleasant shopping experience.In other words, you’re getting more for your money than at similarly priced rivals. But the Trader Joe’s shopping experience isn’t just about feeling that the products are a great value. It’s about feeling that you are valued. At this particular location, there’s several people that know me by name. And you know, hey, how you doing? Why are Trader Joe’s worker so friendly and happy all the time? They’re always striking up conversation with you at the cash register or when walking you to a product you’re looking for. When Mark Gardiner worked at Trader Joe’s, he found that this employee behavior is not an accident. They barely showed me how to work the cash register. But they spent hours and hours acting out little play acting exercises of how you would interact with a customer. By observing his peers,Gardiner realized Trader Joe’s prefers to hire a certain kind of person. People who are naturally extroverted, naturally empathetic. And Trader Joe’s is willing to pay above industry standard for those employees. According to the Trader Joe’s podcast, crew members get raises twice a year. Perks can also include health insurance and retirement benefits. Gardiner enjoyed working at Trader Joe’s, but the job wasn’t without its headaches. Scheduling of staff was a complete disaster. It was the most completely crazily disorganized. So there are a lot of things that they’re not good at. Really basic grocery store stuff like restocking the store. Are they ordering the right mix of stuff? Are they ordering the stuff that people actually want? They’re not that good at that. Are they keeping cold things cold? Are they keeping frozen things frozen? They’re not that good at that. They’re not particularly good at being a grocery store. They’re really not. What they’re good at is this one thing. Building this incredible brand. But experts say Trader Joe’s isn’t trying to be the very best grocery store.Trader Joe’s is acknowledging that for most Americans, you can’t do all your shopping at Trader Joe’s. You’ve still got to go to another grocery store. I do think sometimes you need the basics and they don’t have it. Sometimes the produce may not be like as fresh as other places. The company’s meat and produce sections have drawn criticism in the past for being limited or not the best quality. They’ve realized, hey, we can’t be all things to all people. And we know that our customers will also shop the competition. But what will they shop us for? And can we be best in class for those products? Let’s be honest. Grocery shopping can be a chore. It’s an errand many are happy to outsource to Amazon or Instacart.Technology is trending toward eliminating the grocery store shopping experience altogether. Meanwhile, Trader Joe’s isn’t competing on convenience. It’s giving you a different kind of grocery shopping experience, one that motivates people to seriously inconvenience themselves in order to shop there. The company has successful regional competition from the likes of Wegmans on the East Coast and H-E-B in the South. But other national and multinational grocery brands have tried and failed to imitate the concept in the U.S. Roberto says Trader Joe’s is hard to copy because it doesn’t have just one competitive advantage. The goal for any company right isn’t just to build a distinctive strategy. It’s to build a moat around their castle, to be able to defend the castle. How do you do that? You build a unique system of activities, interlocking choices and activities. A system where things fit together really well. That’s how Trader Joe’s has carved out its own niche in a very cutthroat industry. You can go anywhere to tick off a checklist of basic needs. But at Trader Joe’s, it’s about the joy of discovering something unexpected, even if it means not checking off a few things on your list.

Reader Comments

  1. This makes me want to go to Trader Joe’s! Their chocolate cats cookies for people are 👏🏻👏🏻👏🏻

  2. I love shopping at Trader Joe's when I'm in the U.S. Their products are so amazing. I wish they would come to Canada, even though the prices would probably be double here…

  3. Great video piece. I have been going to TJ's since the early 90s when they moved out of California to their second state, Arizona. Great products, good value and wonderful employees.

  4. I had no idea Trader Joe's has been owned by ALDI for so many years….. Truly, I thought all this time Joe held it privately.

  5. Trader Joes has the BEST quality ingredients at HALF the price of whole foods so idk what you're talkin about. It's the cheapest grocery store with the highest quality foods. Every other grocery store is processed garbage and whole foods is 2x more expensive than Trader Joes. Love TJs

  6. Went in a trader Joes once, walked around, couldn't find anything I actually wanted. Ended up walking out empty handed.

  7. The parking lots are always poorly designed, sized and executed somehow but by golly I must spend thousands a year there!

  8. They also missed Trader Joe’s strict rules about what they don’t put in their products, they don’t have anything artificial

  9. I have been to many trader joes and I have only had ONE nice and funny encounter with a cashier. The trader joes I have been to the employees are always serious and look like they dont want to be there or help.

  10. Trader Joe's + dollar store + farmers market = an affordable yet valuable, and well rounded shopping experience for me 🙂

  11. I did not know Trader Joe’s was owned my Aldi. No wonder I love shopping at both. It’s cheaper than shopping at Stop N Shop. I live in NYC. Food is expensive and Trader Joe’s and Aldi allows me to save money

  12. I wish they would consider having their locations in NY to be more closer to the subway stations. And yes its so challenging when shopping at these locations… long lines, smalll spaces, the subway stairs. walking distance etc

  13. ❤️ Trader Joe's..not overwhelmed with marketing … friendly workers… small intimate atmosphere…. Not beat to death with marketing products…. just get in and get out.. no hassle returns also!

  14. 8:24 is exactly why I shop there. It’s not overwhelming at all to shop there! It’s easier to select what I need for basic food items… I’ll go to a larger grocery store if I need specialty cooking items or baking ingredients… but Trader Joe’s does the job for basic foods & freezer meals

  15. I like ALDI and Trader Joes because they pay their employees well, have good products and are relatively cheap compared to the competition.

  16. ive had both the naked and trader joe "similar" counterpart and theyre different. they're similar but the trader joe version is less thick and less sugary. so no, you can't find the same thing

  17. I live less than a block from TJs. Do all my shopping there 😄 everyone loves TJs because basically everything you get there is good. Less selection but 9/10 things are tasty. It’s not because it looks like a market.

  18. I love their coconut creamer, it is one of the few vegan creamers that doesnt have a chalky taste in my coffee.

  19. For me it’s like going to a theme park when I visit Trader Joe’s. I love love love them especially for their wine selections.

  20. I like how that guy worked undercover at Trader Joe's just to complain and nitpick. Let's be honest, he has never run a successful grocery store.

  21. My favorite store. I have a gourmet-like grocery store one mile from my house but I will drive 45 minutes to go to Trader Joes because their products are awesome and they have good prices. I still get a few things from my neighborhood one but I spend way more money at Trader Joe's. Trader Joe's employees are also very nice and helpful which is much different from normal grocery stores.

  22. Only thing is, I still can't find where to find ALMOND butter taste that similar to TJ, however I prefer to shop at Lidl 🙂 More convenient, cheaper, also carry plenty of European goods which I prefer 🙂 ALDI is actually kinda change their game a lil bit to what I observed, but still LIDL is more make sense after all

  23. Guys, I live in LA and I have tried everything. Von's, Trader Joe's, Whole Foods, Albertson's, Ralph's and even Costco.

    If you have a family of 5+ -> Costco
    If you're single or are just in a relationship (my case) -> Trader Joe's for food and produce + 99c store for anything that you don't put in your body (cleaning supplies, tools etc..)
    If you wanna be environmentally friendly and are willing to do a little bit of scheduling too, you can order your produce from "Imperfect Produce" too. They would deliver their "ugly" but perfectly edible and tasty produce to my doorstep every Tuesday. I used to do that and would literally be able to only spend $250/mo on groceries for myself ($100 at TJ's + $20 with Imperfect produce, every two weeks).

  24. Watched this while eating Trader Joe's Organic Corn Chip Dippers and Chunky Olive Hummus. Can't imagine life without it. And the wine prices are better than anywhere else.

  25. I spend way less money there their stuff is not expensive ginger snaps avocados mango juice chocolate covered almonds minced garlic garlic salt sheesh the best supermarket everrrr y’all bugging I love Trader Joe’s it’s the BEST period I’m so lucky to have two by me

  26. I just shop at Aldi. Trader Joe’s has some good products but not worth the price for me. I can still get many organic foods at Aldi.
    Trader Joe’s is the high priced fancy Aldi. If I had bigger food budget I would shop at Trader Joe’s more.

  27. I was SO CLOSE to getting a job with them but the interviewer kept assuming I couldn't lift a cart of items to restock. Even though I was one of the main people to move my very heavy belongings at least four times. If I have to do it I will do it. I hope better is on the horizon.

  28. That’s stupid with the woman said customers want to feel that they’re smart shoppers I don’t want to feel anything I just do what I need to do what is best for me that’s just an idiotic statement I am smart I don’t need to feel like I’m doing something smart

  29. Another dumb statement too many choices people get overwhelmed that’s for the limited intelligence people they can’t process that much information just more stupidity on the public. People are so inferior minded it’s really pitiful

  30. Why are all the produce wrapped in plastic. Reason why I still shop at Safeway is because they don't wrap every since fruit & vegetable in plastic.

  31. Trader Joe's not having the freshest produce is interesting. Aldi also doesn't have the freshest produce. The slaw I buy at Aldi only stays super fresh for 2 days in the refrigerator while the same slaw from other supermarkets stays super fresh for 4 days. I think the open doorless refrigerators they are stored in before being bought are to blame.

  32. This is a great neighborhood store with specialty items which is all I use it for at this point. I can’t afford it on a regular basis, it really adds up with all my other expenses. I’m very happy to shop mainly at Grocery Outlet. When my refinance goes through, I may get some stock. Trader Joe’s has the best pie crust, all butter. Latkes are something I won’t make but they have them. They have good pork tenderloin, and veggies, fruits. Mainly it’s their too good snacks and single dish entries that add up. Their chicken salads are good, totally worth it.

  33. 1. aldi's (the company Americans think of) does not own Trader Joe's. Aldi is two companies in Europe, and the one that owns Trader Joe's does not own the American chain of Aldi grocery stores.
    2. Only mates, or assistant managers, wear the floral shirts, crew members wear t-shirts that say Trader Joe's, and afaik there's only one captain per store (who also wears the floral shirts).

  34. I don’t have Trader Joe’s or Aldis. Whole Foods isn’t close. Lucky market is close but expensive. So Walmart it is.

  35. Loyalty cards are a security issue and allow companies to spy on you. I work at tjs. I was told hackers can’t get your info because tjs doesn’t store it (no loyalty card) and they don’t want to know how much TP you buy personally. Loyalty cards are actually really freaking creepy. They give you “deals” in exchange for a psychological profile on you to market to you.

  36. This video is one of the more accurate ones out there. It avoids a lot of the assumptions the media makes about tjs (and passes it on as fact). You do mess up the Aldo thing. There are two Aldi companies that are competitors. One owns Aldi US and one owns TJs. Aldi competes with Tjs.

    Also, Mark Gardener’s take on his store (bad orders, bad scheduling, acting out social situations) doesn’t apply to others. Everything he said his store did is the opposite of mine. We never play out scenarios. We keep our frozen stuff frozen (“cold chain” is constantly harped on at my store). The scheduling is second to none at my store! We pride ourselves at my store at being “the best grocery store” in my town and we are in a saturated market. Our Captain has been in the grocery business for decades and we are the best in my area at “grocery store stuff”. Either Mark didn’t mention any of this or the video producer cut it. Each store is run differently.

  37. Trader Joe's and ALDI need to be doing A LOT more to address the impact they are having on the environment. The packaging used for these goods is toxic: killing us and the planet.

  38. I spend $80 on groceries at target for both me and my husband. The only thing I get at Trader Joe’s is tortillas because they taste really good:)

  39. I dont know about anyone else… I'd rather have Naan from India and not from Indiana. Let's celebrate culture properly and authentically. Way to go TJ's!

  40. 1:00 I am so offended that the once great CNBC Make It has stooped to such low levels as to call the much-coveted All-di a blasphemous Aal-di.

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