Retail Giant Price War: Trader Joe’s Sells Items Cheaper Than Whole Foods
Apr 02, 2016 02:46 AM EDT | By Chandan Das
Deutsche Bank analysts recently said that Trader Joe's is likely to be cutting prices, and this might pressure Whole Foods to announce an entirely new pricing. Moreover, after checking 77 similar items at Trader Joe's New York outlet and comparing the prices with the items available at nearby Whole Foods concluded that Joe's was selling items at roughly 26 percent cheaper.
For instance, Trader Joe's sold baskets at $240, while the same basket was available for $303 at Whole Foods. The price gap is much wider compared to earlier checks and analysts believe that Trader Joe' is implementing a comprehensive price cut, something akin to what the company had done two years back, the Business Insider reported.
Way back in 2013, when Trader Joe's retail stores touched the 300 mark across the US, the company cut prices of about 200 items. The report quotes Karen Short, an analyst with Deutsche Bank, as saying that the move by Trader Joe's has seemed to have caught Whole Foods off guard, forcing it to cut prices on similar items.
Since Trader Joe's has opened about 500 stores now, the company seems to be slashing prices again. According to Short, Trader Joe's may have once again caught Whole Foods off guard as previous checks did not show such difference in prices at the outlets of these two retail giants.
Aside from lower prices, Trader Joe's has also been benefitting from the cult appeal of items such as Cookie Butter. On the other hand, Whole Foods has been taking a beaten up on social media for ridiculous items like asparagus water and pre-peeled oranges, First We Feast reported.
Meanwhile, it was found that the private-label items at Trader Joe's were also 15 percent cheaper compared to Whole Foods' 365 private-label goods. In fact, both publicize their private-label foods for being free of synthetic flavors, preservatives, trans-fats, genetically modified ingredients, as well as other ingredients that may be potentially unhealthy.
Short stated that the wide price gap between Trader Joe's private label products and WFM's '365' private brand was actually a surprise to them considering the fact that generally the strategy of '365' brand has been to match Trader Joe's on price in private label, notwithstanding the fact that WFM's private label is significantly superior in quality and, hence, justifies a premium. She wrote that in their previous price checks, a private label of Whole Food matched Trader Joe's item by item, but not this time.
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