2. Mission Statement
• The mission of Trader Joe's is to give our
customers the best food and beverage values
that they can find anywhere and to provide
them with the information required to make
informed buying decisions. We provide these
with a dedication to the highest quality of
customer satisfaction delivered with a sense
of warmth, friendliness, fun, individual pride,
and company spirit.
3. People
Trader Joe's target market
• Health conscious consumer
• The well-educated and well-traveled consumer
– Someone who can appreciate sprouted wheat bread,
black rice, unpressed soap, soy milk, a canny
Argentine merlot, and a frozen spinach lasagna
• They cater to different cultures
– Asians, Indians, and Hispanics
• Consumers who appreciate a good value
4. Products
• Quality, healthy, gourmet food
– Wide variety of gluten-free foods
– No artificial flavors or preservatives
– Non-synthetic food coloring
– No genetically modified organisms
• Unique specialty products
– About 80% of their products are private-label
products
• Constantly bringing in new products
5. Products
• They carry a limited assortment of
products
– Only about 2,000 products versus
larger supermarkets who typically
carry about 30,000
• They do not carry familiar mass-
market brands
– So they don’t have to compete on
price
6. Products
• They typically stock only one kind
of laundry detergent, but 10 kinds
of hummus
• The products are great-tasting
• Hard to find in other supermarkets
• Come from around the world
7. Competitors
• When Trader Joe's opened in 1967, their competition
was 7-Eleven
– Today, Trader Joe’s has 420 stores
– Whole Foods – 350 stores
– Safeway – 1,300 stores
– Kroger – 2,640 stores (nation’s largest chain)
– Tesco (6,784 stores), the UK $90 billion grocery and
general merchandise chain, opened 200 stores in
California, Arizona, and Nevada in 2007 (Fresh & Easy).
They offered products similar to those at Trader Joe's, but
went out of business in 2013 due to weak sales
8. Place
• Trader Joe's has 420 retail stores in 40 states. Approximately half of their
stores are located in California.
• Fresh Format - emphasize perishables, are about half the size of a Traditional
Supermarket, and dedicate a greater proportion to fresh foods — produce,
meats, prepared foods — and a relatively smaller portion to “center store”
items such as cereal and ketchup.
9. Place
• Stores average between 8,000 - 12,000 square feet
– Versus 50,000 square feet found in traditional supermarkets
• Stores are always found in dense population areas where the community has a high level of education
• They seek to make your shopping excursion resemble a vacation
– Employees wear Hawaiian shirts
– Hand out food and drink samples from little tasting huts
– The atmosphere is a fun tropical adventure theme
10. Promotion
• Rely on word of mouth advertising
• Advertising is very limited
– No TV commercials, newspaper ads, E-mail advertising, social media,
coupons, or loyalty cards
– A small amount of radio ads
• The Frequent Flyer (newsletter), featuring new products and store
locations is mailed to customers three times each year and during
holiday periods.
• Trader Joe's doesn't conduct public interviews or share their
strategies
11. Pricing
• Everyday low price strategy
– Prices can be described as both reasonable and fair
• They only carry products where they're able to offer an
outstanding price
– 80% private-label brands are bought directly from the
manufacturer to keep the prices low
– They don't carry any mass-market brands so they don't
have to compete on price
• No coupons, discounts, or sales
12. Profit / Financials
• Trader Joe's is a privately held company so
financials are not made available to the
public
• Reportedly:
– $6.5 billion in sales in 2007
– $8 billion in sales in 2009
– Equals 11% growth per year
• The growth of Trader Joe's has been
achieved without debt as they're fully self-
financed
2007 $6.5 B
2008 $7.2 B
2009 $8.0 B
2010 $8.9 B
2011 $9.8 B
2012 $10.9 B
2013 $12.1 B
2014 $13.4 B
2015 $14.9 B
13. Environmental Factors - Social
• Trader Joe's has some advantages
– First, they have discovered that alcohol consumption rises
along with education levels
• They have responded to this by offering a large selection of both
beer and wine.
– Second, market research has revealed a relationship
between education and consumer choices
• The more highly educated tend to travel more and therefore, are
more inclined to be attracted to the unique product lines offered
by Trader Joe's
– Finally, they're very culturally aware
• Actively cater to the growing populations of Asians, Indians, and
Hispanics
14. Environmental Factors - Economic
• Trader Joe's is positioned to perform well in all
economic conditions
– They perform well in a weak economy because they
have low prices
– They perform well in a strong economy because they
have unique products
• They basically carry luxury products at reasonable
prices, which is quite rare
15. Environmental Factors - Technological
• Trader Joe's is slow to adapt to new technology
– They didn’t start experimenting with scanning bar
codes at the checkout until 1999
– Still rely on handwritten customer response cards
– Do not utilize any form of loyalty system
– They aren’t currently taking advantage of social
media, E-mail, or smartphone apps
16. Environmental Factors - Competitive
• Whole Foods is their biggest competition
– Other than that, Trader Joe's doesn't currently have a lot of strong direct competition
– I believe that will change
• The demand for organic, gluten-free, and non-GMO foods is growing rapidly
Consumer Perception on Quality (YouGov BrandIndex)
17. Environmental Factors - Competitive
• YouGov BrandIndex tracks public perception of thousands of brands across the world
– Consumer perception of Trader Joe’s is significantly higher than Whole Foods.
– Trader Joe’s is winning the price-war in a big way and consumers are aware of this.
– Consumers view Trader Joe’s as inexpensive but high-quality
Consumer Perception on Value (YouGov BrandIndex)
18. Environmental Factors -
Competitive
Trader Joe's Whole Foods
Sales per square foot $1,734 $930
Bag of quinoa $4.99 $9.99
Gluten-free cheese pizza $4.99 $7.49
2013 revenue $12.1 billion (est) $12.9 billion
Number of stores 420 350
Today, major grocery chains still capture a huge share of our grocery dollars
- Kroger, $98.4 billion
- Safeway, $36.1 billion
- Publix, $28 billion
19. Environmental Factors -
Regulatory
• The external regulatory forces work in favor of
Trader Joe's
– They specialize in organic, gluten-free, and non-
GMO foods
– Due to the regulatory forces in place, products
which are labeled as such cannot be falsified
– Sales at Trader Joe's could potentially suffer if
another company started selling cheap gluten-free
products, which weren't truly gluten-free
20. SWOT - Strengths
• Low prices
• Unique products
• Constantly bring in new products
• Quality products
• Strong brand name
21. SWOT - Strengths
• Trader Joe’s sells 2 - 3 times as much per square foot than
other supermarkets
• Product guarantee (no questions asked on returns)
• Cheerful employees (casual and chatty cashiers)
• Culturally aware
• They encourage consumer feedback
22. SWOT - Weaknesses
• While Trader Joe’s has weaknesses, most of them
stem from their strategy (which is clearly effective)
– Slow to adapt to new technology
– Size of store
– Lack of stores in some cities
– Typically have smaller parking lots
– Limited selection (lacking basic products)
– Lack of social media presence
23. SWOT - Opportunities
• Opportunity lies in the
Fresh Format concept
• Growing demand for
organic foods
• Expand private-label
market
• Expand into the online
market
• Expand internationally
3.6%
10.6% 12.7%
19.0%
22.9%
31.2%
38.4%
92.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Projected % increase in sales 2013 - 2018
24. SWOT - Threats
• Competition is going to get stronger
– It's only a matter of time before retailers close the gap (of supply and
demand) for healthy food
• Existing supermarkets will expand product selection
• Completely new retailers will open stores (Tesco, Fresh & Easy)
• Rising labor costs
– But they pay above minimum wage (average hourly
wage is $12.24 - $13.20 per hour for crew members)
25. Conclusion
• I would want to work for Trader Joe’s because...
– Average hourly wage is $12.24 - $13.20 per hour for
crew members
– Full-time employees make at least the median
household income for their communities and part-
time employees earn health-care benefits
– Turnover among full-time crew is only 4% annually
• I would invest in Trader Joe’s, but you cannot
because they’re a private company
