Trader Joe's has a new competitor in the low-price grocery wars
There's a new competitor now that's almost as cheap: Whole Foods.
Whole Foods' new chain, 365 by Whole Foods Market, is only about 4% more expensive than Trader Joe's - and that's not including 365's loyalty program discounts - according to a recent price check by Wedbush Securities.The first 365 location opened in Los Angeles last month.
Analysts compared a basket of about 100 items at 365 to a basket of similar items at nearby supermarkets including Trader Joe's, Sprouts Farmers Market, Vons Supermarket, and a traditional Whole Foods store.
While 365 was slightly more expensive than Trader Joe's, it was 14% cheaper than Sprouts, 31% cheaper than Vons, and 23% cheaper than a traditional Whole Foods store.
The baskets cost $207 at 365, $199.03 at Trader Joe's, $241.54 at Sprouts, $299.50 at Vons, and $269.39 at Whole Foods.
"We attribute the majority of pricing differential to difference in quality, sustainability, and other traits (non-GMO, etc.) of private label offerings," analysts wrote.365 was cheaper than all the other stores in every single category except meat, according to the study. 365 had an average premium of about 1% in the meat department compared to competitors.
"365 pricing appears to be doing its intended job: to become increasingly price competitive to small-format value-oriented peers," the analysts wrote.