Trader Joe’s Slashes Prices as Whole Foods’ Cheaper Concept Store Launch Nears
With the first 365 by Whole Foods Market set to open its doors in May, Trader Joe’s appears to be gearing up for a healthy food price war, dropping prices on its already lower-priced food items.
“A basket of 77 items at Trader Joe’s,” Fortune reports, “was 26% cheaper than its equivalent at Whole Foods, according to a price comparison recently conducted at New York area stores by Deutsche Bank. That was a larger difference than in previous store checks.”
The offerings to be sold at the new 365 by Whole Foods Market stores are still much a secret, but the chain is expected to focus largely on its private label brand of products also named 365.
And Trader Joe’s seems to have done its homework in anticipation of the new chain launch, marking down similar items 15 percent lower than the Whole Foods brand.
“The discrepancies led the Deutsche Bank analyst, Karen Short, to speculate that Trade Joe’s could be making ‘price investments,’ which is industry parlance for discounts, as its store count reaches 500,” reports Fortune. “Three years ago, as its fleet hit 300 stores Trader Joe’s slashed prices on 200 items, catching Whole Foods unawares.”
“Our concern is that Trader Joe’s might be once again catching Whole Foods Market off guard, because prior checks have not shown such disparity,” Short wrote in a her research note.
The first 365 by Whole Foods Market will open just a mile from one of the busiest Trader Joe’s in the Silver Lake neighborhood of Los Angeles.
Whole Foods, which has the longstanding nickname ‘Whole Paycheck’ said it was opening the new chain of stores to reach millennials and shoppers with limited budgets. It’s also hoping to bust myths about healthy and organic foods being cost prohibitive—something big box rivals Target, Costco, and Walmart have been proving with an expanding array of lower-priced organic food items.
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Trader Joe’s image via Shutterstock
