business news in context, analysis with attitude

Business Inside has a story about something that someone, somewhere finds to be controversial - a TikTok video suggesting that Trader Joe's is a chain primarily targeted at affluent people.

According to the story, the video "spurred discussion around Trader Joe's, a chain with around 530 stores and 10,000 workers, predominantly being for rich people. It's not the first time that debate over the grocery chain's perceived priciness has gone viral on TikTok, either.

"Insider previously found that the grocery chain draws in an up-and-coming crowd, with the typical shopper being a married, college-educated individual between 25 and 44 years of age earning over $80,000 and living in an urban area.

"In a 2007 report published in Pepperdine University's Graziadio Business Review, researchers found that Trader Joe's eschews national brands and instead focuses on selling a constantly changing mix of merchandise that 'are distinct from those sold in traditional supermarkets.' The result is a slew of 'high quality' products 'offered at low prices' within a relatively small store, compared with larger grocers or big-box competitors."

KC's View:

As you might be able to tell from the my characterization above, I'm more shocked that this is seen as news than I am by the idea that Trader Joe's attracts an educated, well-off customer base.

The key to Trader Joe's success, to my mind, is less about price than it is about differentiated products that appeal to people who know something about food.  It is not as health-oriented as some might think, nor is it particularly good at fresh foods.  The magic happens with the private label items that are high-quality and give the buyer a sense of being special because the products are positioned that way.

That's a really good combination.  What is more mystifying is why more retailers don't try to find their own way to the same formula for success.