Trader Joe’s opens in Birmingham today at the Summit, and judging from my Facebook feed, we could not be more excited. We’re pumped about Trader Joe’s good food (many of their products are all-natural, some are organic and pretty much all of them are fun) and about their low prices. We’re happy that we’re finally deemed cool enough to have a Trader Joe’s in our city. We’re excited to try Unexpected Cheddar Cheese, whatever that is. But when we’re loading up bags full of two-buck chuck and Organic Pumpkin Toaster Pastries, are we doing a disservice to our local companies? Is shopping at Trader Joe’s really any better than shopping at Walmart?
Well, yes … and no. Yes, it would be better for our economy to buy groceries from locally owned stores. But no, Trader Joe’s isn’t exactly a corporate devil — from all the research I could find, they’re not even close.
How Does Trader Joe’s Compare to Other Groceries?
Here are the main reasons to shop locally: Way more money (up to 60% more) goes back into our economy when we buy local. But locally owned stores also tend to treat their employees better, make staffing and stocking decisions locally, and have a less disasterous footprint than corporate stores.
Trader Joe’s doesn’t stack up when it comes to the local financial benefit of locally owned stores (like Organic Harvest, Western and farmer’s markets), and they don’t make staffing and stocking decisions locally. However, they start looking pretty great when compared to other grocery chains, especially other chains that sell discount groceries: They prioritize organic, natural food that’s free of transfats and HFCS, and they have a much smaller footprint than most grocery stores.
But the biggest reason I don’t mind supporting Trader Joe’s is because they treat their employees well. From all the research I could find, Trader Joe’s staffers are paid well and treated pretty fairly. To me, this is huge — treating human beings well should be an important goal of any company (at least one I’ll support with my money), but most big chains don’t prioritize their people at all. Trader Joe’s is an exception, and I think that’s wonderful.
How Does Trader Joe’s Keep Prices So Low?
I’ve often written that low prices should make us suspicious. Instead of getting gleeful over low prices, we should ask ourselves why the prices are so low — often the reason is that, somewhere along the way, people and communities are being abused. I did lots of research to try to find these abuses from Trader Joe’s, and I came up short every time. Here’s how TJ’s does keep prices low:
Trader Joe’s keeps labor costs low by minimizing labor needs. Their stores are much more self-service than your typical grocery (new products are put out still in their boxes instead of stocked onto shelves, for example), so they don’t have to hire as many people to keep the store running.
Trader Joe’s stores have a small footprint. This means their stores are smaller, and since grocery stores are incredibly expensive to heat and cool, smaller footprints mean cheaper electric bills. It also means lower rent. (Smaller footprints also mean less havoc on local economies when corporations relocate or close.)
Trader Joe’s skips most advertising. Trader Joe’s doesn’t even have corporate social media pages! Most of their advertising is done by fans, and that means they don’t pay for it.
Trader Joe’s saves money by selling private label products. TJ’s doesn’t just sell products that bear their name and are exclusive to them, but these items do make up a much higher percentage of stock than they do at other stores.
What’s Private Label and How Does It Keep Prices Low at Trader Joe’s?
Private label products are products packaged just for Trader Joe’s (the ones that have their name on them), and they’re what Trader Joe’s is famous for. TJ’s private label is also both the most fascinating and the most shady of their cost-lowering strategies. On one level, the strategy is brilliant: They source from factories around the world, so they can shop around for good prices on trendy foods, then combine those trendy foods with cheaper ingredients, creating private label products that are both trendy and cheap.
For example: Maybe pumpkin is expensive now, but cranberries are cheap. So Trader Joe’s sells Pumpkin Cranberry Crisps — they capitalize on the popularity of pumpkin in the fall, but they keep the price-per-item down by combining it with a cheaper product. (This is just a metaphor — I don’t have any idea about the market price of pumpkins or cranberries.) Customers are happy because they find fun products, get to enjoy trendy and seasonal foods, and don’t pay much for the experience. Trader Joe’s is happy because they still get a good markup on their crisps.
I believe this is why Trader Joe’s regularly pulls popular items that are still performing exceptionally well, and why you can’t count on your favorite Trader Joe’s private label product being available next month — because, instead of raising the price of a product when it can’t be sourced cheaply anymore, TJ’s simply pulls the item altogether. Because Trader Joe’s is more of a specialty store than an all-your-needs-met grocery store, they can do this without too much customer complaint.
Trader Joe’s is quite secretive about where their private label food is sourced, and that makes sense — announcing which factories make their food is basically giving a road map to competitors. But because TJ’s isn’t transparent about where their food is made, we don’t know how people are treated in their factories. Does this automatically mean there’s a big problem? No — but it doesn’t mean there isn’t one. For me, lack of transparency isn’t a reason not to shop at Trader Joe’s sometimes; but it does mean I’ll shop with a bit of caution.
Trader Joe’s Is a Sometimes Store
I think shopping at local stores is usually the more ethical and economic choice, and when it comes to shopping for food, that might be doubly true. But a modern economy does not survive on local shops alone: Corporations are a reality, and probably a necessity, in our increasingly global market, and part of localism is calling corporations to account for the good and bad things they do. That means boycotting corporations that do very bad things, but it also might mean rewarding corporations that make decisions we agree with — decisions like selling organic food and paying their workforce fairly.
Cookie Monster said it well: “Cookies are a sometimes food.” I think Trader Joe’s Cookie Butter is a sometimes food as well, but it’s one corporate splurge we don’t have too feel badly about. As long as we’re still supporting our locally owned shops and farmer’s markets on a regular basis, Trader Joe’s is a way we can shop local-ish without compromising our integrity — or our economy — too much.
Carrie Rollwagen is author of The Localist: Think Independent, Buy Local and Reclaim the American Dream, creator of 30 Days of Local Praise and co-founder of Church Street Coffee & Books. Find her on Instagram, Facebook and Twitter @crollwagen.