Last fall, Trader Joe’s boldly encroached on Wegmans’ home turf, setting up shop in Rochester in the same suburban plaza where Wegmans’ mammoth flagship store towers.
The audacious move proved successful for the California-based specialty supermarket chain. Eager shoppers lined up early in the morning last October before the store even opened its doors in the sprawling Pittsford Plaza.
“The first few months you couldn’t even get in here because it was so jam-packed,” said Cynthia Van Houte, a Pittsford resident, during a recent trip to Trader Joe’s. “You had to come between 8 and 10 in the morning if you wanted to get in. It was unbelievable, especially since Wegmans’ iconic store – the supermarket Mecca – is right there.”
As the Buffalo area prepares for Trader Joe’s Western New York debut later this year, many are wondering: What’s the big deal?
What could be the draw that even standing a few hundred yards from Wegmans – a treasured hometown favorite and a nationally ranked supermarket — and in Wegmans’ headquarters city, of all places, Trader Joe’s can still thrive?
The chain has communities all over the country clamoring for a store, including some Kenmore residents who spent more than two years trying to lure it to the area.
Trader Joe’s plans to open a store this year on Niagara Falls Boulevard in Amherst. It is entering a market already crowded with the likes of Tops, Wegmans, Walmarts, Aldi, Dash’s, Budwey’s and others.
It’s something the company has done all over the country, staking out territory as a quirky chain that usually creates its own niche.
“It has an extremely loyal following; it’s almost gone beyond being cult,” said Tod Marks, senior project editor for Consumer Reports. “Trader Joe’s is not conventional by any means, in terms of product mix.”
With shelves stocked with unusual store brand items, like cookie butter, Thai lime and chili cashews and wasabi roasted seaweed snacks, Sue Forsyth, a 64-year-old from Brighton, said shopping at Trader Joe’s is “like an adventure.”
“The food options are really unique,” said Brielle Berman, a 22-year-old Rochester resident. “I just picked up a bag of coconut chips. Where else are you going to find coconut chips?”
Additionally, Marks, who conducted a survey last year of the leading 52 supermarket chains in the country, said Trader Joe’s is affordable and provides top-notch service.
“They are very efficient operators and one of the best stores that offer the best prices,” he said. “They do a good job. Not many supermarkets are better.”
In fact, it was a close second to Wegmans, which ranked No. 1 in Consumer Reports Best and Worst Supermarkets survey in May of 2012. Marks said there was no meaningful difference between the two supermarkets’ ratings. Wegmans scored higher on perishable goods but Trader Joe’s had better overall prices and the most open registers.
While Trader Joe’s is among the top supermarkets in the country, its strength among the big boys is impressive to retail experts because it is actually more of a boutique grocery store. Locations tend to be one-tenth the size of larger supermarkets, and they stock fewer than one-tenth of the items. For example, a typical supermarket carries 50,000 items, but Trader Joe’s has just 4,000. And 85 percent of those bear the chain’s private label.
Trader Joe’s is a privately held company run by Aldi Nord, which is owned by the Albrecht family of Germany. Another of division company, Aldi Sud, operates Aldi chain in the U.S. There are 367 Trader Joe’s stores around the country, and Supermarket News reported it had $9.5 billion in sales in 2011.
It was founded as Pronto Markets in 1958 by Joe Coulombe. In 1967, Coulombe renamed it Trader Joe’s, settled on its South Seas theme during a Carribean vacation, and opened the first one in Pasadena. Coulombe sold the company to the late Theo Albrecht in 1979. In 1996, the company made a move east, opening its first stores in the Boston suburbs of Brookline and Cambridge. While half of its stores are in California, largely concentrated in the Los Angeles area; it now has stores in 30 states.
The company continues to grow and is wildly popular throughout the country, but its East Coast operations haven’t been the success that its West Coast stores have been, said Burt Flickinger III, a retail analyst and managing director of New York City’s Strategic Resource Group. He said some California stores have sale volumes of $900,000 to $1 million a week because Trader Joe’s lower prices are more attractive in the state with the highest price market in the country. But competitive pricing from East Coast supermarkets have prevented that high level of sales, Flickinger said. He sees the new store being an indirect competitor to all existing local supermarkets, with annual sales between $10 and $15 million. Trader Joe’s entrance into Western New York “will take a little bit of volume from everybody, but it’s not going to have a significant sales impact on a single chain,” he said.
The company is secretive about its operations and suppliers. (The company declined interviews for this story.) It has a strong inventory of Trader Joe’s products that sell for as little as half the price of national brands. By dealing directly with vendors, the chain is able to cut costs, which is passed on to shoppers.
The chain tends to appeal to the college crowd – professors and students – and tends to do well in areas with a highly educated demographic. And it reportedly screens potential locations for those attributes before building stores. The Buffalo-area Trader Joe’s will be in a 12,000-square-foot building immediately south of the existing Barnes & Noble bookstore at 1565 Niagara Falls Blvd., near UB’s North Campus. It will be about a mile away from a Wegmans on Alberta Drive and a Tops on Maple Road.
“When a new retailer enters a market where we have stores, we don’t change course,” said Theresa Jackson, Wegmans consumer affairs manager, in an email. “Instead we remain focused on our customers and the things that are important to them – incredible service, the right selection of products, and low prices, especially on those products families buy every week.”
Wine was a hit
Trader Joe’s is touted for its organic ingredients and products. Along with hard-to-find food products, the chain is also famous for its wines, beers and spirits. It was famous for the Charles Shaw wines that sold for $2 a bottle, nicknamed “two-buck chuck.” (The price has since climbed to $2.49.)
But New York’s laws don’t allow grocery stores to sell alcohol other than beer. Trader Joe’s in New York City solved that problem by opening two stores side-by-side – one for groceries and the other for wine and liquor.
But while shoppers will be able to pick up meats, breads, fruits and vegetables at Trader Joe’s, its offerings are limited.
“It’s tough for a family to do a one-stop food stop,” Flickinger said. “The values will be good, but to do full food shopping, consumers will still have to go to a conventional supermarket, like Wegmans or Tops.”
Van Houte finds that to be true. She said the store is great for unique, healthy and easy meals but if she was raising three kids, Trader Joe’s wouldn’t be her primary grocery store.
But Melissa Foster, a Kenmore resident, thinks Trader Joe’s offers a comprehensive shopping experience. And she thinks its lower prices, especially for organic goods, will force local competitors to cut their prices. She is the president of the Kenmore Village Improvement Society, the 700-member organization that waged a two-year campaign to petition Trader Joe’s to open a store on Delaware Avenue in Kenmore.
Since Trader Joe’s is being courted heavily by other communities, the Kenmore group wanted its efforts to stand out. In addition to writing letters, submitting kids’ artwork, creating the “WNY for Trader Joe’s” Facebook page, the group also created “Kenmore Joe,” a life-sized promotional figure, decked out in a Hawaiian shirt, of course. Photos of “Kenmore Joe” with Trader Joe’s products and residents were sent to the East Coast headquarters as part of the village’s pitch.
The group was first to be notified by Trader Joe’s about the planned store for Amherst.
“We’re glad it’s coming,” Foster said. “We believe we influenced their decision to come to Western New York, and we’re happy about that.”
When the Amherst store opens, Foster said, “Kenmore Joe” will be the first in line.
Until then, Foster and other fans of the chain will continue to make trips to the Pittsford store to pick their favorite items.
“We’re thinking about going again on Sunday,” she said.