Overall supermarket traffic slumps; Trader Joe’s Grows

High quality, low-priced private label goods have long driven traffic to Trader Joe's, and the longer inflation hangs around the longer its checkout lines get.

In the first half of 2022, Trader Joe’s traffic tracked right alongside grocery industry trends. The second half of the year was a different story, however.

From the beginning of July to the end of September 2022, the grocery industry went from a 2% increase in traffic logged in January to a nearly 7% decrease.  Over the same time period, Trader Joe’s started half-a-percentage-point back and entered October with a 7% increase, according to a report from foot-traffic analytics provider Placer.ai.

Since the beginning of 2023, Trader Joe’s has briskly continued to move ahead of the pack. The supermarket industry has been in the negative column for traffic all year, bottoming out with a 14% decrease at January’s end. Trader Joe’s, meanwhile, has remained in the plus column, posting visit increases of 5% in February and 6% in May.

“Trader Joe’s maintains its position as a specialty grocer that affords price-sensitive consumers a premium grocery experience when luxuries are few and far between,” said Placer.ai analyst Ezra Carmel.

Trader Joe’s also gets more out of its square footage than just about any other grocer.

In the first quarter of 2023,  Placer.ai did an analysis of customer behavior at a Ralphs Supermarket and a Trader Joe’s not far from each other on National Boulevard in Los Angeles. Though the median dwell time of customers was the same—24 minutes—average visits per square foot were 25 for Trader Joe’s versus eight for Ralph’s.

“The Trader Joe’s location’s trade area was also larger than that of the Ralphs location and had less overlap, which means that more shoppers from Ralph’s trade area were visiting Trader Joe’s than vice versa,” Carmel said.  “In addition, the two stores had identical median dwell times despite their size difference. So not only are Trader Joe’s stores smaller and therefore incur lower fixed costs – they also certainly get bang for their buck.”

Ralphs, however, registered a higher percentage of repeat visitors that engaged in less cross-shopping with Trader Joe’s than vice versa.

“So despite the Trader Joe’s location’s higher visits per sq. ft. and larger trade area, a higher percentage of visitors visited Ralphs repeatedly,” Carmel said. “This suggests that while Trader Joe’s specialty nature is an attractive proposition, demand for conventional grocers remains strong.”