Frozen & Dairy Buyer: Trader Joe’s – Cherry Pickers of ‘Quality’
a special arrangement, presented here for discussion is a summary of a
current article from Frozen & Dairy Buyer magazine.
you think Trader Joe’s shoppers would say they like the most, if they had
to choose from among price, selection, quality of products or the total
shopping experience? Not that the other options receive bad grades but “quality” turns
out to be number one.
I recently asked
Phil Lempert, editor of SupermarketGuru.com,
to send me some data about Trader Joe’s shoppers. Specifically, I wanted
to ask Trader Joe’s shoppers what percent of their shopping they do there,
how often they visit, how they feel about the lack of national brands and
if they thought price, selection and quality were up to snuff.
month, 1,293 members of Mr. Lempert’s consumer panel checked in, with 67
percent of them women and 91 percent of them Trader Joe’s shoppers.
the Trader Joe’s shoppers, 82 percent rated product quality as “terrific,” with
another 16 percent checking off “okay.” Only 2 percent — sourpusses no
doubt — rated quality as “terrible.” Next on our list: “total shopping
experience.” Here, 78 percent said “terrific,” 20 percent said “okay,” and
those same malcontents 2 percent said “terrible.” Price came in third,
with 59 percent saying prices were “terrific,” and 40 percent saying “okay.”
in last place. With 49 percent saying “terrific” and another 49 percent
saying “okay,” that’s hardly bad. But the differences between the relative
answers are interesting.
of shoppers are using Trader Joe’s for fill-in and special purchases,” Mr.
Lempert said in an e-mail. “It’s more like a treasure hunt than a day-to-day
shop. Also, the fact that half felt the selection was okay further reinforces
research showed that 92.6 percent of the Trader Joe’s shoppers said “the
lack of national brands does not bother me.” But only 2 percent said they
do between 75 percent and 100 percent of their shopping there. Okay, so
maybe it doesn’t bother them, but they do visit other stores. Only 12 percent
said they do between 51 and 75 percent of their shopping at Trader Joe’s.
This means that 86 percent of Trader Joe’s shoppers do half or less of
their shopping there. But a third visit once a week or more, with another
25 percent visiting every other week.
Mr. Lempert sees
a “huge opportunity for them (Trader Joe’s) to expand to get an additional
shop frequency out of each category of shopper. They probably need to add
just a few leading SKUs that are currently not available” in the stores,
he says. For Trader Joe’s, getting more share of market would seem possible,
since shoppers seem to be cherry-picking the stores not so much for price
but for unique “quality” items. Based on the survey results, maybe some
tweaks to promote lower price perception would also help, whether the chain
actually cuts prices or not.
Questions: What can Trader Joe’s do to increase the overall grocery
spend from its loyal customers? What categories could be added or enhanced?
What pricing changes might be required?