Why Trader Joe’s will never, ever dive into online shopping

Online grocery shopping exploded during the pandemic and still makes up a more than $8 billion segment.

But Trader Joe’s on Monday said it will never seek out a piece of that e-commerce pie.

In the specialty grocer’s monthly Inside Trader Joe’s podcast, the retailer said being a bricks-and-mortar company is core to its identity and is the only path that makes financial sense for the business.

“We love being a real place for a whole bunch of reasons and not just because it’s where we started,” co-host Matt Sloan, of the grocer’s marketing department, said during the episode. “It’s because we’re good at it, and it’s because we know how to go about it. And it’s because doing it allows us to keep doing it really well, without and of the distractions and all of the costs that ultimately might get passed onto those shopping with us, were we to pursue them.”

Plus, the “treasure hunt” experience is core to Trader Joe’s, co-host Tara Miller noted.

“It’s that experience of being inside the four walls of Trader Joe’s that makes Trader Joe’s what it is,” Miller, who also works in the grocer’s marketing department, said. “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.”

Beyond the customer experience, though, is the business case for eschewing e-commerce, Sloan said.

Adding another sales channel would “only just add cost,” he said, adding, “Free shipping doesn’t really exist.” Adding shipping costs, warehouses and all of those additional employees would impact the grocer’s bottom line, Miller said.

Trader Joe’s small footprint limits the number of products it can carry and forces customers to interact with each other and with store employees, building that emotional shopping experience, the hosts said.

“One of the things that I think makes Trader Joe’s truly unique is that while we are solely a bricks-and-mortar retailer, we’re not a big box,” she said. “We very intentionally have smaller footprint stores. It helps us to have a more personal connection with our crew members, with our customers, with the products that we sell.”

On Monday, longtime Trader Joe’s CEO Dan Bane announced his retirement, effective July 2.

Bane, who had held the top post for 22 years, will be replaced by current COO Bryan Palbaum. President of Stores Jon Basalone will be promoted to vice CEO and company president.

Monrovia, California-based Trader Joe’s was founded in 1967 by Joe Coulombe. The grocer now operates 543 stores in 42 states and Washington, D.C.