Report: Trader Joe’s visits surge as grocery prices do the same
Traffic at the specialty grocer is far outpacing that of other food retailers, coinciding with rising food prices, according to new data from Placer.ai.
As grocery prices increase, so too do visits to Trader Joe’s.
That’s according to data released this week by foot traffic research firm Placer.ai, which found that visits to the specialty grocer are far outpacing those at other food retailers in recent months. The research gives a glimpse into sales metrics at the notoriously quiet grocery chain.
Between January and July of last year, visits to Trader Joe’s largely followed those at all other grocery stores, Placer.ai found. But beginning last August, when grocery price inflation began to surge, Trader Joe’s traffic began surpassing other food retailers.
By last month, visits to Trader Joe’s were 6.3% higher than they were in January 2022. During the same period, visits to all other grocery stores fell 5%, according to Placer.ai.
Traffic at Trader Joe's is outpacing that of conventional grocers. Source: Placer.ai
Monrovia, California-based Trader Joe’s differentiates itself with a curated selection of owned brands, offering many products that shoppers cannot find elsewhere.
“Trader Joe’s continued success may be due to the company’s reputation as a budget-friendly grocery option,” the data firm said in its report. “The California-based grocer’s many private-label products help keep prices relatively low, and this value perception could be driving trade-down to Trader Joe’s … Trader Joe’s maintains its position as a specialty grocer that affords price-sensitive consumers a premium grocery experience when luxuries are few and far between.”
Placer.ai also took a close look at Trader Joe’s presence in Los Angeles, where it has nearly a dozen stores, to examine how it stands out from supermarkets. A comparison of a Trader Joe’s store and a Kroger-owned Ralphs store less than a mile away found that, per square foot, visits to Trader Joe’s were more than three times higher during the first quarter.
Plus, Placer.ai found that both stores had media dwell times of 24 minutes even though the Ralphs supermarket is much larger.
“The Trader Joe’s location’s trade area was also larger than that of the Ralphs location and had less overlap, which means that more shoppers from Ralph’s trade area were visiting Trader Joe’s than vice versa,” the report found. “So, not only are Trader Joe’s stores smaller and therefore incur lower fixed costs—they also certainly get bang for their buck.”
But Ralphs did have a higher percentage of shoppers who visited at least three times during Q1 (32.4%) compared to Trader Joe’s (24.9%), suggesting that demand remains for the broader selection of conventional grocers, the report said.
In addition to its curated selection, Trader Joe’s stands out in another way from conventional food retailers: It has no interest in e-commerce.
In a podcast last month, the specialty grocer said being a bricks-and-mortar retailer is central to its identity and the only path that makes solid business sense.
“It’s that experience of being inside the four walls of Trader Joe’s that makes Trader Joe’s what it is,” one of the podcast’s hosts noted. “That experience would not be the same if you were trying to order something from a website that showed you the products you already know about.”
Read more about:
Trader Joe'sAbout the Author
You May Also Like