Today I was at Trader Joe's and overheard a conversation that made me irritated and sad all at the same time. It was between a customer and an employee and went something like this...
Customer: Oh, I just love Trader Joe's - it's the first place I come to on my grocery trips you know!
Employee: Hey, that's great, we're glad to hear it!
Customer: Absolutely, you would not believe how much I would be paying for olive oil at Schmuckety Schmuck's Gourmet Market across the street! So I come here first for the bulk of my groceries and then go there just for a few special items.
Employee: Ain't that the truth! Anything I can help you find?
And so on and so forth. Once the customer was gone the employee said to another employee, "You know, it's conversations like that that make me realize what a big difference there is between what stores charge and what they could charge."
The "could" was infused with the smugness of believing he had just discovered the secret to grocery pricing: greed.
Oh how sick and tired I am of this oft-assumed ill-informed opinion being bandied about by laypeople and even Ivy League educated economists everywhere.
What neither the customer nor the employee bothered to think about to factor into their assessment of "fair" pricing was the fact that Trader Joe's is a discount grocer with produce that goes bad faster (in my experience), far less quantity and variety of inventory, as well as unpredictable inventory availability on any given day. I can't tell you how many times I've had a hankering for turkey breast and TJ's is out of stock. This is because they buy in bulk and carry more frozen, non-perishable, and preserved products which last longer and can be priced lower. They buy less fresh food so it either sells out fast, or sits around longer since it is not quickly replenished (and then I buy it and it rots before I can eat it). They also have a good amount of TJ's branded goods and do not advertise their goods or services as much as other stores might (or at all? I've never seen a Trader Joe's advert). Either way, they have a nice little niche and do what they do well.
Additionally, it is important to notice that their stores are usually much smaller than the average grocery store (again, only in my experience) and they don't even have automated checkout lines with the conveyor belt thingy (which I'm guessing reduces overhead too.) So, while going to TJ's is hardly an ideal shopping experience, their prices are discounted to reflect the above-mentioned shortcomings and that's why I am still a loyal shopper there and often plan my shopping trips just like the lady above.
Now Schmucktey Schmuck's across the street is a much larger, nicer, and well-stocked store than TJ's. It features a full service bakery, meat counter, deli counter, premium wine selection, florist, catering service, gourmet kitchen where food is prepared to go, and a produce section that boasts rarities like cactus leaves and kumquats, etc. So while their olive oil is pricier, it should be! That is the premium paid for a much better shopping experience.
However, I can still see some of you are scratching your heads over why the SAME brand of olive oil is cheaper at TJ's than at SS's. Well - let's say you are having a dinner party and there is a rare, expensive variety of lobster tail you are planning to prepare. You know Schmuckety Schmuck's will have them fresh, in-stock. However, in order to provide their customers with this service at somewhat reasonable prices, they lower the price of the lobster tails somewhat and make their other staple goods like olive oil and yogurt just a bit more expensive.
What Schmuckety Schmuck's is NOT doing is hosing people for the heck of it! This type of analysis is so wrong it hurts my brain to even attempt to think it.
Don't get me wrong - even I have complained about the $9 I paid for a side of steamed broccoli at Dean and Deluca in Manhattan - but I was also requesting freshly steamed broccoli to go at one of the most gourmet stores in Manhattan, that was my fault.
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