Trader Joe's Insiders Finally Explained Why There's No Rewards Program
After one TikToker chronicled her purchase of a whole week's worth of groceries at the popular grocery chain, TikTok was flabbergasted at how far $50 will get you at Trader Joe's. So how does the store keep prices so low? Instead of offering tons of different brands like most grocery stores do, Trader Joe's follows a similar model to what you'll find at the popular grocery store Aldi. Almost all Trader Joe's products are sold under the Trader Joe's label, which allows the buyers to negotiate for the best price and bypasses added expenses like advertising. TJ's passes those savings on to consumers. According to Business Model Analyst, over 80% of Trader Joe's products come from its own house brands.
The company is also highly selective about what it sells. The average Trader Joe's carries only 4,000 items, while most grocery stores carry a mind-boggling 30,000. Each one of those products is rigorously scrutinized and tested before being put on the floor. The store is careful not to let items outstay their welcome, and brings in new items every week (per Eat This, Not That). In addition to all this, there's one other way Trader Joe's holds prices down and it may surprise you — their loyalty program, or lack thereof.
The reasoning behind Trader Joe's lack of a loyalty program
Devoted fans of Trader Joe's will know that the popular store doesn't have any sort of loyalty program. According to an episode of the Inside Trader Joe's podcast from January 2, 2023, this is just another way the company holds down costs and passes savings along to its loyal customers. "We're interested in removing costs," says Inside Trader Joe's podcast co-host Matt Sloan. "[T]hose loyalty programs, they're not free. It costs money and takes lots of time and resources to track all your purchases, to give you a coupon targeted to your interest, to provide a deal that was paid for through a collection of the manufacturers, and maybe even that customer's own money[.]"
"To me," says co-host Tara Miller, other retailer's standard loyalty programs "[sound] anything but something that would engender loyalty because what it does is, it says this week I'm gonna shop over here because they have a discount on this. And next week I'm gonna shop over there because the manufacturers go back and forth with the different retailers, with the discounts." "[W]hen you shop at Trader Joe's," adds Miller, "you know what the prices are gonna be, we don't change our prices unless our costs change."
In fact, according to Forbes, Trader Joe's has a customer loyalty program that many stores would be jealous of — actual loyalty from their customers, earned through the store's unique products, reliably low prices, and knowledgeable staff.