Did Trader Joe’s make the right decision to end grocery deliveries?
Running counter to one of grocery’s biggest trends, Trader Joe’s announced it is ending its delivery service in New York City on March 1 with no plans to roll out delivery elsewhere. The high costs and arrival of numerous delivery services were cited as the reasons.
“When we originally introduced delivery, we had one store on 14th Street in Manhattan, options for outside delivery services were limited and ride-sharing meant hopping into a taxi with someone else. Today, there are seven Trader Joe’s stores across Manhattan, with more on the way, and services for transporting food and people abound,” Trader Joe’s said in a statement released to media outlets.
“What hasn’t changed is our focus on providing our customers with the best-quality products for great, everyday prices,” the grocer added. “Instead of passing along unsustainable cost increases to our customers, removing delivery will allow us to continue offering outstanding values and to make better use of valuable space in our stores.”
The grocer has offered delivery in New York for 10 years.
The move comes as Walmart, Kroger and Amazon (with Whole Foods) are ramping up online grocery fulfillment options. Analysts project that U.S. grocery e-commerce will take off over the next few years due to expanded pick-up and delivery options as well as robotics-driven picking efficiencies.
An article in Bloomberg suggested delivery costs are likely much higher in New York City with fierce competition in the area from Jet.com, Peapod, Instacart, FreshDirect and Amazon.
On the other hand, some feel third-party services can still support delivery and point out that TJ’s shift places more focus on winning in-store experience.
In explaining earlier this year why Trader Joe’s landed top on its list of America’s favorite grocery stores, dunnhumby wrote that having a minimal digital approach means Trader Joe’s falls short on convenience. But the bricks and mortar-only, private brand approach “minimizes costs and keeps prices low, allowing them to reinvest in customer service, product quality and in-store experience.”
- Trader Joe’s is killing its grocery delivery program even as Walmart, Whole Foods, and Kroger spend billions to win the online grocery wars – Business Insider
- Trader Joe’s to end grocery deliveries in New York City – Supermarket News
- Trader Joe’s Bows Out of Cutthroat NYC Online Grocery Market – Bloomberg
- Trader Joe’s Kills Its Grocery Delivery Program – Food & Wine
- The Supply Side: Online grocery poised for 20% annual growth by 2023- Talk Business – Talk Business
- Researchers expect online grocery sales to continue growing fast in 2019 and beyond – Digital Commerce 360
- Walmart taps 4 more delivery companies to help it get groceries to homes – CNBC
- These Are the Grocery Stores Americans Love the Most – Thrillist
- Why Trader Joe’s plans to end its grocery delivery program – Produce Retailer
DISCUSSION QUESTIONS: Is Trader Joe’s wise to end its delivery service in New York City and plans for other markets? Will Trader Joe’s eventually need to offer e-commerce options?