The Natural Food Channel: Trader Joe's Profile
Popular for its quirky personality and unique products, Trader Joe’s Co. is an $11.3 billion, retail chain of more than 400 small-footprint stores that likewise appeal to both natural food shoppers and gourmets. Trader Joe’s has gained massive fandom for being unlike conventional supermarkets. Due to their limited amount of stores, Trader Joe’s is a destination: a place consumers seek out to purchase their natural and organic foods. The chain’s strengths mirror its competitor Whole Foods, as both works to capitalize on growing consumer interest in natural and organic products. In many ways, Trader Joe’s and Whole Foods also have very similar – and in many cases the same – customers. Yet, the striking differences between the two stores are what keep the customers going to both stores. Trader Joe’s focus is a sharply edited assortment of great products at a reasonable price; while Whole Food’s focus is premium quality with a huge selection.
In The Natural Food Channel: Trader Joe's Profile the historical growth and expansion strategies of Trader Joe’s are analyzed. Also examined is their mission/position, store location and design, product standards and programs, use of private label, pricing, advertising and use of social media, organizational structure, ethical and environmental initiatives, consumer demographics and psychographics, and more.
Chapters in this report also examine the wave of up-and-coming competitors in the natural foods industry. In the past two years, several growth-oriented specialty food retailers and natural food chains—including Sprouts Farmers Market, The Fresh Market, Fairway Market, and Natural Grocers by Vitamin Cottage—joined the industry with initial public offerings (IPOs). Additionally, Natural Markets Food Group, which owns the Mrs. Green’s Natural Market chain, is said to be considering an IPO as well. Then there is startup company Fresh Thyme Farmers Market, backed by Midwest-based supercenter retailer Meijer Co. It also is strongly rumored that billionaire investor Ron Burkle’s private equity firm Yucaipa Cos. plans to revive the Wild Oats Market name, converting the Fresh & Easy stores it acquired from Tesco Plc in November 2013 into Wild Oats natural foods markets. And supermarket Kroger Co., which maintains more than 2,400 stores across the country under regional banners including Kroger, Ralph’s, and Fry’s, is also making a play for the natural and organic food space and considers itself the second-largest player in this market after Whole Foods.
Scope and Methodology
The sources for The Natural Food Channel: Trader Joe’s Profile include both primary and secondary research data. The primary data includes research gathered through interviews with retailers and other members of the natural and healthy food industry, and on-site examinations of retail stores. Secondary research involved the evaluation and comparison of data from articles found in financial, marketing, and industry publications, as well as on corresponding websites and in consumer social media. Other sources for secondary data include annual reports, 10-Ks, transcripts of earnings calls, and literature from individual companies. Consumer data are derived from Simmons National Consumer Surveys for Summer 2013, from Experian Marketing Services.
Each chapter contains tables, charts, graphs, and illustrations that reinforce content and make the points in the text easier to understand.
The Natural Food Channel: Whole Foods Profile (February 2014) is also available from Packaged Facts as a companion report. Chapters 3 and 4 in these reports contain parallel content. If you purchase The Natural Food Channel: Trader Joe’s Profile, receive a $750 discount on our Whole Foods report.
Market Insights: A Selection From The Report
Trader Joe’s has not experienced any significant direct competition because it occupies a unique niche in the marketplace. No one else has the same assortment of merchandise because about 80% of Trader Joe’s inventory is composed of private label items. Although individual items may be identical to products at other grocers, for the most part, Trader Joe’s differentiates its products a fresh twist, such as an all-natural formulation or a new flavor no one else has thought of. Trader Joe’s is also unparalleled because it embraces a combination of gourmet, natural/organic, and ethnic/multicultural foods rather than focusing on just one of these sectors—and it does so at far lower prices than upscale specialty grocers and most natural foods stores. Moreover, the chain’s incomparable atmosphere makes it a fun destination rather than a tedious shopping trip.
Whole Foods and Trader Joe's Cultivate Image as Must-Visit Health Food Destinations
Unlike conventional supermarkets, Whole Foods Market and Trader Joe's are destinations: places consumers seek out and travel to over long distances. The two chains' retail strengths echo similar market strategies as they seek to capitalize on growing consumer interest in natural and organic products, according to The Natural Food Channel: Whole Foods Profile and The Natural Food Channel: Trader Joe's Profile, companion Packaged Facts reports focused on retailing in the natural and organic food and beverage market segment.
In many ways, Whole Foods and Trader Joe's have very similar--and actually often the same--customers. Many consumers shop at both Whole Foods Market and Trader Joe's, or would, if both stores were in the same trading area, notes Packaged Facts research director David Sprinkle. The report reveals that consumers who are likely to shop at both chains have a higher than average education; are more conscious of labels, ingredients, nutrition, and eating healthfully than the average consumer; are more interested in natural/organic products (and not just food); are more interested in gourmet foods, foreign foods, and the way food is presented; and are more concerned about environmental issues.
Yet, for all the similarities, it's the striking differences between the two chains that keep the same consumers shopping at both.
Whole Foods is America's first national "Certified Organic" grocer and is the leading retailer of natural and organic foods with $13 billion in fiscal 2013 sales. Whole Foods focuses on premium quality and huge selection. Though also offering value-priced items, the chain presents an image of luxury, with case stacks of expensive olive oil as common as displays of its value-focused Everyday 365 store brand.
Meanwhile, Trader Joe's focus is renowned for its quirky personality and unique products. The chain is a sharply edited assortment of great products at great prices. It has much smaller selections and not quite as much variety to offer when it comes to fresh produce, meats, seafood, and prepared foods.
There is also a vast difference in the chains' marketing thrusts. Whole Foods' marketing intent is to promote sustainability, responsible sourcing, and the concept that by buying products at its stores, consumers are supporting not just organic foods, but a production model that benefits local farmers, people in third-world countries, and the environment. In contrast, the marketing thrust of Trader Joe's, with its whimsical atmosphere and newsletters, is that it is here to make shopping fun but it also just so happens to have these great products that it searched the world to find just for its customers, at prices that are a steal.
For more information on The Natural Food Channel: Whole Foods Profile, please visit: http://www.packagedfacts.com/redirect.asp?progid=86121&productid=8032064. For a look at The Natural Food Channel: Trader Joe's Profile visit: http://www.packagedfacts.com/redirect.asp?progid=86120&productid=8031891.
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