7 Reasons Why Trader Joe’s Is So Cheap
Trader Joe’s is a savvy shopper’s tropical paradise. Here's why.
Trader Joe’s is serious about value—you can tell that from their 19-cent bananas! But they have everyday super-low prices on lots of other great products, too.
How do they do it? Why is Trader Joe’s so cheap? As it turns out, TJ’s does cut a couple costs here and there—and some of their money-saving tricks might surprise you.
They Don’t Run Ads
No $4M Super Bowl ad spots for this budget-friendly chain. Trader Joe’s relies on word-of-mouth to bring more customers to their stores, which keeps their advertising costs extremely low. The iconic “Fearless Flyer,” the TJ’s newsletter you see at all the checkouts, is the company’s primary form of advertising. Having super-friendly employees and a stellar reputation doesn’t hurt, either!
They Don’t Have Name Brands
Almost all of their products are private label, which means 80% of what you buy will be labeled with “Trader Joe’s” (or Trader Ming’s, Trader Jose, Trader Giotto…you know). While other grocery chains end up paying extra for brand-name products from mass-market suppliers, TJ’s cuts out the middleman by buying foods directly from the source and doing all of the packaging themselves.
They Only Stock the Best Stuff
Every product at Trader Joe’s has to pull its own weight. If an item doesn’t sell strongly, it goes away to “gangway” for something else.
They Keep Operational Costs Low
Trader Joe’s stores don’t have a full-service butcher shop, bakery or café. We’ve also heard that the chain likes to use energy-efficient lighting to cut down on utility costs. Plus, TJ’s tends to stock certain things in boxes, rather as individual products on the shelf.
They Have Small Stores
Less square footage than other top grocery chains means Trader Joe’s can keep overhead costs low. And every penny they save on the A/C bill gets passed on to customers like us.
They Don’t Have Coupons
It might seem odd, but Trader Joe’s helps customers save money by not having promotions. They offer the best deals without any “gimmicks,” which means they don’t have to pay to print coupons, promote a weekly sale or run a membership program. Just low prices, every day!