Trader Joe’s Hit by Whole Foods Price Cuts

Published on: 03 Oct, 2017

After Amazon.com, Inc. (NASDAQ: AMZN) acquisition of Whole Foods, cost cuts as well as internal restructuring has been hurting rivals, such as Trader Joe’s, the most. Whole Foods’ foot traffic jumped 17% year over year the week of price cuts and traffic was still up 4% three weeks later. About 10% of Trader Joe’s customers seemed to haved moved to Whole Foods each day after first week of the acquisition after price cuts were announced. After the first week, Trader Joe’s still had a 6% defection rate even three weeks later.

The defection rate shows consumers moving from a rival to Whole Foods as a percentage of the total regular consumer base. The percentage of regular Trader Joe’s customers which are shoppers that visit the supermarket at least twice a month is then calculated with shoppers that go to Whole Foods instead of Trader Joe’s or another competitor on a given day.

Almost one in 10 regular Trader Joe’s customers went to Whole Foods instead of going to Trader Joe’s following the first week after the acquisition.

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Ariana Cheong

Email: ariana@financialinsiders.com

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