Sunday, May 15, 2016

Trader Joe's price investments widening the gap with Whole Foods

According to an analyst, Trader Joe's may be widening its price advantage with Whole Foods. Karen Short of Deutsche Bank Securities said in a report recently that a Trader Joe's in the New York market had a total price advantage of 26% over a neighboring Whole Foods Market across a basket of 77 like items. In fact, Trader Joe's prices were cheaper on 60 of the 77 items checked.

Overall, Trader Joe's prices were 30% cheaper on perishables and 24% cheaper on non-perishables. In addition, Trader Joe's had a 15% advantage in overall prices versus Whole Foods' private label items.

Short said the widening price gap may be the result of a round of price investments by Trader Joe's, which recently reached the 500 store mark. The company made a similar round of price investments in 2013, when they reached the 300 store mark. That event in 2013 garnered a response by Whole Foods, which lowered prices to remain competitive with its rival.

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