When it comes to buying groceries, prices are immensely important. Need proof? Take millennials' obsession with Traders Joe’s. It isn’t just TJ’s innovative products like everything bagel seasoning, coffee flour, and pepperoni pizza macaroni and cheese that keep customers coming back almost every single week. It’s also the fact that when you're feeling thirsty, you can pick up a bottle of wine for two bucks, or that you can easily throw together a summer feast that doesn’t break budgets. Yep, it all comes back to money. Usually we just accept the real good, but real cheap identity of TJ’s without question, but Business Insider just explained how the grocery chain maintains this status, and the reasons are actually pretty interesting.
According to Business Insider, the main reason Trader Joe’s stays so affordable is by selling private-label products. You may have noticed that there are never bags of Cheetos or pints of Ben & Jerry’s in TJ’s aisles, and that’s one of the chain’s secrets. Staying away from big brands names helps keep consumer costs down. Just like generic items are cheaper at other grocery stores, the same applies here. Business Insider reports that, "eighty percent of the products carried by Trader Joe's are in-house," which means the groceries are purchased straight from source: suppliers. With the middlemen removed, costs are reduced. It's basic supply chain economics and it makes all the difference.
Two other factors that contribute to TJ's low prices are the fact that it doesn't spend much on marketing and its simplistic store design. Trader Joe's doesn't advertise much and primarily relies of fans sharing their love for the chain with their friends as a way to attract new customers. It seems like that tactic is really working out, since people Instagram the launch of new Trader Joe's products with similar fervency to that of a new Frappuccino or Oreo reveal.