Trader Joe's

The history of grocery stores in the United States is complex and full of competition and innovations as consumers' ever-changing tastes dictate who rises to the top. Some grocers compete on the basis of cost leadership, like Walmart, who’s slogan is “Everyday Low Prices”. Other grocers seek a blue ocean strategy by serving rural food deserts like Dollar General. Trader Joe’s, however, utilizes a unique differentiation strategy via distinctive product offerings and exceptional customer experience. Founded in California but expanded nationwide, it is the perfect middle ground for many shoppers between limited SKU boutique organic grocers and a typical American mega-grocery chain. As a firm, Trader Joe’s possesses a few key strengths that have allowed for rapid expansion within US

In order to continue offering such high-quality grocers at reasonable prices, Trader Joe’s has placed an emphasis on maintaining exceptional supply chain practices and supplier relationships. Joe’s differentiated themselves from suppliers by allowing slots in their store free of charge and squaring away accounts payable very promptly (Ager 6). As a result, suppliers have offered the grocery chain preferred pricing on private label goods under the trust of confidentiality. Another subtle capability and competitive advantage of the grocery chain is its ability to foster and maintain a cult following. With roots in Southern California as an “out-of-the-box”, hip, and sophisticated grocery store, the personality of Trader Joes has exceeded that of any competitor. According to the Harvard case study, “Trader Joe’s claimed that 80% of its customers had attended college,” (Ager 6). This customer profile extends to their internal company culture as well. Trader Joe’s looks to hire extroverted, enthusiastic, and educated