A Tale of Two Stores: Trader Joe’s Trade-Off

The Trader Joe’s on Memorial Drive in Cambridge embodies the grocer’s reputation as a community-centered store that offers hip, healthy food at affordable prices. A vibrant mural stretches across the squat stucco building’s riverfront facade, depicting smiling members of the Cambridge community sharing meals together. Inside, the bustling store truly feels like a trading post. Friendly crew members and regular shoppers create a welcoming environment that invites newcomers to join the search for delicious and affordable finds, like speculoos cookie butter or the plant-based tikki masala. The Trader Joe’s appears embedded in local history, and it continues to play an active role in the community today.

The Trader Joe’s across the river in Allston seems to tell another story. Steel-paned floor-to-ceiling windows dominate the large storefront. A sleek new apartment building rises several stories above, and the Harvard Science and Engineering Complex looms down the road. These aggressively modern structures are conspicuous amidst the older, more charming brick buildings in the surrounding neighborhood. It’s hard to believe that a Trader Joe’s occupies this lot: A tech startup or an upscale grocer selling twenty-dollar kombucha seems more likely. In the store, the grocer’s characteristic hand-written labels and casually arranged displays feel out of place among the industrial lighting and sharp modern design.

At first glance, this tale of two Trader Joe’s appears to follow the familiar story of a company that compromised its foundational values as it achieved success. The older Cambridge location represents the company’s economical, community-based ethos, while the newly-constructed Allston store demonstrates — like the big supermarkets it originally sought to oppose — that Trader Joe’s has become an intrusive presence. While this evolution appears to violate the core values of the brand, this narrative ignores founder Joe Coulombe’s shrewd entrepreneurial spirit that has remained the driving force of the company’s operations. New Trader Joe’s stores are in line with Coulombe’s resourceful tactics that helped the company beat competitors and grow to a national scale. Although this business acumen inspired Trader Joe’s egalitarian image, it also limited the brand’s accessibility by catering to a specific demographic of middle-class, college-educated consumers. As Trader Joe’s continues to grow as one of the nation’s most popular grocery stores, it must reconcile these competing values to uphold its mission of making affordable, high-quality food accessible to all.

Joe Coulombe started Trader Joe’s in 1967 as a grocer that offered affordable products not found in traditional convenience and grocery stores. For several years, he ran a chain of convenience stores in Southern California. Coulombe saw the value of filling product gaps and dealing directly with the supplier. He applied these lessons to Trader Joe’s, selling health-oriented and imported food not offered by competitors. This approach eliminated intermediaries, allowing Trader Joe’s to buy directly from suppliers and sell items at discounted rates.

Trader Joe’s unique product offerings are both a core staple of their brand as well as a large reason for its enduring popularity. The company has built a unique and diverse selection of tasty and healthy items that keep customers coming back at one of the highest rates in the industry. Shoppers would be hard-pressed to find items like black tea boba coconut ice cream and Everything But the Bagel seasoning anywhere else. To keep shoppers curious and engaged, the grocer continuously adds new products while removing less-successful ones, according to their company website.

Customers respond positively to these efforts, and social media accounts and blogs with millions of followers have helped establish a community of Trader Joe’s regulars who bond over the store’s treasure trove of unexpected finds. A welcoming employee base, dressed in distinctive Hawaiian shirts and leis, further fosters an inviting, casual shopping environment with friendly service, hand-written signage, and recommendations galore.

The brand’s private label allows it to accomplish all this at reasonable prices. Today, 80% of Trader Joe’s items are sold under the brand name. Standardizing these cheaper rates across all the brand’s numerous locations further guarantees accessible prices for customers across the nation. A Consumers’ Checkbook survey found that products at Trader Joe’s were on average 18% cheaper than the industry average, while 76% of customers believed the store was of “superior” quality.

In addition to a unique selection of affordable offerings, a defining characteristic of Trader Joe’s has been its clear focus on serving an educated, middle-class demographic. When describing the target consumer he had in mind when starting Trader Joe’s, Coulombe would often use the phrase “overeducated and underpaid.” He envisioned a store that catered to university graduates who had adventurous, health-oriented palates but couldn’t afford gourmet meals on a middle-class budget. Coulombe and his successors in Trader Joe’s leadership crafted an economical assortment of healthy food items to fit the bill. Instead of adopting a full-service supermarket approach that would require a comprehensive set of groceries and necessities, Trader Joe’s features a narrow yet carefully curated product range to match the target consumer’s taste, a remarkably successful strategy.

Though good for business, this narrow focus has challenged Trader Joe’s commitment to accessibility and even made it a symbol of gentrification in lower-income communities. A list of store locations indicates that Trader Joe’s tend to pop up in wealthier parts of urban centers. There’s a glaring lack of stores in more rural parts of the Midwest, where access to cheap, healthy food is especially needed. Even in urban areas, less affluent residents choose other stores over Trader Joe’s, as it doesn’t offer a comprehensive set of necessities like other grocers. As a result of its close association with upper-middle-class consumers, many lower-income communities of color view Trader Joe’s as a force of gentrification. For example, the Portland African American Leadership Forum opposed the opening of a Trader Joe’s in a historically diverse and low-income neighborhood in 2016. Trader Joe’s ultimately abandoned construction.

These concerns are not unwarranted, either. A study by Zillow found that the arrival of a Trader Joe’s caused neighborhood rent and property values to increase 4.5% faster than the city average. Another investigation by RCLCO consulting group reported that construction of a Trader Joe’s in an apartment complex raised rent by an average of 5.8%.

The niche, distinctive products that make Trader Joe’s so beloved by many are also the reason why it has become a symbol of class privilege and gentrification for lower-income communities. Still, the grocer has undeniably succeeded in offering unique, healthier alternatives to traditional groceries. Expanding its target consumer base may allow Trader Joe’s to be more inclusive in its offerings and store locations. Reframing the business strategy that has guided the company since its founding will hopefully bring Trader Joe’s closer to achieving its goal of making healthy, delicious food accessible for all.