TO: The Class of Bus300.06, The Class of Bus300.

06
FROM: Kevin Xu, CSR Skeptic
DATE: 2/22/23
SUBJECT: Trader Joe’s Social Responsibility Strengths and Weaknesses

Trader Joe’s
Trader Joe’s is an American chain of grocery stores with 560 locations across the United States. Trader
Joe’s is defined by ‘matchflame’ on UrbanDictionay as “A grocery store that deals in mostly organic
food. Lots of white people. Everywhere.” Trader Joe’s fulfills a truly unique space in the grocery store
market, performing near the top of its category, and is able to achieve this without any means of
traditional marketing. A qualitative study conducted by iModerate defined Trader Joe’s consumer
perception as “Consumers tend to view Trader Joe’s as a hip, quirky store that attracts a down-to-earth
crowd…” This perception purports Trader Joe’s as a brand with a strong sense of corporate social
responsibility, but is this market perception true when considering the concrete business practices
exercised by Trader Joe’s? This report aims to present findings on the Trader Joe’s brand’s contributions
and impediments to its surrounding communities, and assess its overall level of corporate social
responsibility.

Using What You Have

Trader Joe’s quirks and unique style of operation spawns from the relationships with its suppliers and
carries all the way through the consumer when its products hit the shelves. By utilizing certain operation
models such as truck-to-shelf inventory management, a lack of supplier favoritism, and strategic
discontinuation of products, Trader Joe’s is not only able to keep costs low, but they are also able to spin
this in a way that appeals to the consumer. The truck-to-shelf model allows Trader Joe’s to maintain a
higher level of just-in-time inventory, while also providing fresher products for customers. In addition to
this, there is no supplier favoritism that allows for suppliers to purchase higher traffic positions within the
store, and therefore maintain this sense of integrity toward the customer, prioritizing simple and quality
offerings, as opposed to brands that buy into the store. In addition to this, Trader Joe’s allows for the
seasonal guidance of product offerings, when certain ingredients are out of season and charged at a
premium, Trader Joe’s opts to discontinue the product as opposed to pushing the higher costs onto the
customer. In turn, this creates a sense of demand within the customer base while also preserving them
from higher cyclical costs.
Appeal to Consumer Psychology
A Trader Joe’s business practice that communicates its sense of corporate responsibility is in the products
that TJ’s carries, and the psychological responses that those products and their environmental stylings are
capable of eliciting. Through a consideration of the customer journey, considering the purchasing
processes, and supplementing this with thoughtful customer service, Trader Joe’s is able to provide a
refreshing grocery store experience that’s simple and intuitive. In turn, this creates a strong sense of brand
loyalty and creates an authentic customer experience in each Trader Joe’s location that is uniform and yet,
unique to each city it operates in.

Communication Analysis
Trader Joe’s communication of its social responsibility and standing begins as soon as you enter their
stores. From the easy and charming island theme, to the friendly employees and strong customer service,
it is the hand-drawn signs and house brands that really scream out to the consumer that this business feels
down-to-earth, local, and quality. These methods of communication are purely implicit, Trader Joe’s isn’t
making these claims to corporate social responsibility outright, but they certainly are playing the
consumer’s connotative associations with these aspects of business. Try to remember if you’ve ever seen
a Trader Joe’s ad on television, on social media, or on the radio, surely you cannot! And yet, Trader Joe’s
sustains as a household name in the top of its category.

In the vein of explicit communication, Trader Joe’s has a direct line to its consumers on a monthly, highly
accessible basis. Despite having 2.8 million followers on Instagram, Trader Joe’s still continues to
produce and print the Fearless Flyer, a monthly catalog that presents its products in a cute and quirky
manner. The Fearless Flyer is Trader Joe’s direct line that not only allows it to promote new products,
because of the fun and cheerful storytelling, Trader Joe’s communication is highly effective at creating an
emotional and psychological response in readers/consumers.
This further corroborates one of Trader Joe’s strengths, creating the perception of an ethical, no-nonsense,
and local grocery store– without explicitly presenting that idea in plain terms.
However, it is also exactly these factors that Trader Joe’s falls short. What can they do better to support
this perception they’ve built? .
Transparency
However, this friendly Hawaiian-themed grocery chain has historically had difficulty disclosing
information regarding its products and processes. While Trader Joe’s develops its identity and position
within the grocery store market as a pragmatic and local style grocer, Trader Joe’s is actually a national
chain that operates hundreds of stores. Trader Joe’s house brands often supply products that are
manufactured by larger and far less ethical corporations, such as Nestle, PepsiCo, or ConAgra.

What can be done? If Tj’s increases their level of transparency on product suppliers, then there is likely to
be a resulting reduction in purchases and demand for certain products. If Trader Joe’s intends to increase
its ethical standing, an appropriate response would involve finding strong alternatives to replace
controversial products.

Excessive Packaging
In its competitive business model offering a limited selection against a high turnover rate, Trader Joe’s
faces criticism for its use of plastic packaging. Part of this issue is guided by its focus on processed foods
rather than fresh foods, but even some fresh produce items are delivered to the shelf in a packaging.
Processed foods result in more packaging, higher carbon footprint, and ingredient/manufacturing
processes that may not be ethically sourced.

What’s the response? Trader Joe’s can’t just stop selling processed products since that’s a primary product
offering. What’s more likely, is a reduction in packaging for certain products like fresh produce, or bulk
nuts, grains, pastas, as well as investing in compostable packaging for processed items.
 REFERENCES

iModerate. (2015, October 28). New iModerate study reveals differing perceptions of Trader Joe's
and. PRWeb.

Jkaybay. (2021, February 16). How ethical is Trader Joe's? The Green Stars Project.

Morgan, B. (2022, October 12). 7 reasons customers are more in love with Trader Joe's than ever.
Forbes.

Prophet. (2022, May 27). How trader joe's drives Fierce Customer Loyalty: Prophet thinking.
Prophet