Can Trader Joe’s continue thriving without delivery and curbside pickup?
Trader Joe’s, with no e-commerce presence or curbside pickup, missed the pandemic-driven e-grocery surge and doesn’t seem to mind.
The limited-assortment grocer is also experiencing challenges because its smaller stores are harder to reconfigure for social distancing. Long lines outside locations have appeared over the last few months.
Placer.ai found monthly visits to Trader Joe’s were down 44.4 percent in April, 24.6 percent in May, 12.1 percent in June and three percent in July. However, August turned positive, up 1.0 percent, the first positive month since February.
“Amazingly, it’s done so while other brands who’ve struggled — like Whole Foods — remain down,” wrote Ethan Chernofsky, VP marketing at Placer.ai, in a blog entry.
Trader Joe’s ended a test of delivery in New York City in early 2019 because it wanted to keep product costs down. The grocer also doesn’t use third-party deliverers, such as Instacart.
On an “Inside Trader Joe’s” online episode from April 20, Matt Sloan, VP of marketing, acknowledged that the chain has received requests to add such omnichannel offerings during the pandemic but has chosen to invest in staff.
“Creating an online shopping system for curbside pickup or the infrastructure for delivery, it’s a massive undertaking. It’s something that takes months or years to plan, build and implement and it requires tremendous resources,” he said. “Well, at Trader Joe’s, the reality is that over the last couple of decades we’ve invested those resources in our people rather than build an infrastructure that eliminates the need for people.”
Tara Miller, Trader Joe’s marketing director, added that offerings from outside delivery companies and curbside pickup by other grocers “don’t always translate into positive results.”
The only other major grocer RetailWire found not offering delivery or curbside pickup was Grocery Outlet, the close-out grocer.
RJ Sheedy, president, on a recent quarterly call said that growth potential with physical stores and challenges replicating the in-store experience is keeping Grocery Outlet from selling online. He said, “Ultimately, our customers enjoy the in-store WOW! shopping experience, the treasure hunt, the value, the personal engagement.”
- Coronavirus Update: How Trader Joe’s is Caring for Crew Members and Customers – Trader Joe’s
- Placer Bytes: The Trader Joe’s Comeback, American Dream’s Glimmer of Hope and Home Depot’s Extended Black Friday – Placer.ai
- Did Trader Joe’s make the right decision to end grocery deliveries? – RetailWire
- Episode 24: The Coffee Cuppers’ Guide to Trader Joe’s – Trader Joe’s
- Trader Joe’s explains why the store won’t be starting curbside pickup or grocery delivery – San Francisco Chronicle
- Grocery Outlet Holding Corp. Announces Second Quarter Fiscal 2020 Financial Results – Grocery Outlet
- Grocery Outlet (GO) Q2 2020 Earnings Call Transcript – The Motley Fool
DISCUSSION QUESTIONS: Should Trader Joe’s reevaluate its decision regarding delivery and/or curbside pickup if the pandemic persists or is it making the right decision to not offer these services? Does Trader Joe’s focus on the quality of its store personnel justify its decision?