Trader Joe's sells $1,734 per square foot, compared to Whole Food's (NASDAQ:WFM) $930 per square foot, according to real estate investment firm JLL. With twice as much product being sold per square foot, it seems Whole Foods has lost its rank as the No. 1 name in organic groceries and, therefore, has recently faced declining sales.
Beyond the sales numbers, consumer perception of Trader Joe's is also higher, reported Business Insider. With plans to open 38 stores in the next year, Trader Joe's is thriving.
One reason behind this perception is that Trader Joe's sells products at lower prices than Whole Foods. A bag of quinoa at Whole Foods sells for $9.99 and just $4.99 at Trader Joe's. Also, gluten-free pizza is almost $3 less at Trader Joe's.
Whole Foods responded to this consumer complaint by announcing in spring that it would focus on lowering prices. The first move came last week when the retailer announced it would lower prices on all produce, about 400 items, in five Austin stores.
Another strategy that seems to be working for Trader Joe's is the popularity of its private label products. These items make up 80 percent of Trader Joe's products, meaning shoppers can't get things like Cookie Butter anywhere else. Whole Foods also has private label products, but they tend to be more basic and less original.
In addition, as more companies get into the organic and health brands division—Walmart is currently stocking such products—shoppers may catch on and start leaving Whole Foods for less expensive retailers.
With all that said, Whole Foods still has a leg up on many traditional grocers, who are losing market share to fresh format stores. In addition, the company is actively pursuing incentives to attract consumers including the recent rollout of a rewards program and a partnership with Instacart that will allow shoppers to get their groceries delivered in as little as an hour.
-See this Business Insider article
Whole Foods looks to streamline business processes, increase efficiency
What the Square-Whole Foods deal really means
Whole Foods confirms plan to buy 7 former Dominick's stores in Chicago
Whole Foods commits $25 million to local businesses, opens wellness center in Detroit
Trader Joe's, Whole Foods, Walgreens recall 90 tons of food linked to E. Coli