Why Costco and Trader Joe’s Stop Selling Your Favorite Food | CNN Business

New York
CNN Business

Chances are, you’ve been there: You head to Trader Joe’s for caramel popcorn, Churro bites, and toasted gorgonzola cookies, or to Costco for mini Kirkland Signature peanut butter cups and takeout pizza.

But when you get to the store, you won’t find your favorite on the shelf. And to your horror, you know they won’t come back.

It has been discontinued.

It is one of the most disappointing experiences as a grocery shopper. Why a beloved product has disappeared into the rank as one of the most common questions customers ask in stores. Fans run social media accounts dedicated to keeping track of discontinued products at Trader Joe’s, and other blogs about long-lost items at Costco.

“We understand that it can be disappointing — even devastating,” Trader Joe’s says on the Contact page for “discontinued” customer feedback.

There are several reasons why Trader Joe’s, Costco (COST), and other stores have suddenly stopped selling customers’ favorite products.

Sometimes the products are seasonal, or the manufacturer always plans to make them for a limited time. Also, for stores like Costco and Trader Joe’s, discontinued items can enhance these stores’ treasure hunt-like appeal.

But often, there are other strategies at play.

One major factor: It’s hard to get shelf space inside Trader Joe’s and Costco and stay there. These companies sell a limited number of items – only the products most in demand by customers.

This is a very different strategy from supermarkets, as well as the likes of Walmart (WMT) and Amazon (AMZN), which offer a wide variety of foods and brands. Costco, for example, sells about 4,000 different products at a given time. Traditional supermarkets usually sell 40,000 items.

The two companies’ ability to keep prices lower than most of their competitors depends on delivering large quantities of best-selling merchandise every minute, every day.

If an item doesn’t sell quickly enough off the shelf at Trader Joe’s or is gathering dust in Costco warehouses, companies will need to switch to something else that customers will snap up.

“If you don’t have high volume or growing volume, the costs of producing and handling a slow-selling product don’t make business sense,” Trader Joe’s VP of Marketing Matt Sloan said in a company podcast earlier. this year.

Other times, it’s the product itself: Companies will pull items if suppliers raise the price too much or the quality drops.

“Costco would rather not sell an item than sell it too high,” said Chuck Howard, assistant professor of marketing at Texas A&M University, Miss Business School. “Selling things that consumers think will be expensive will be a bit off-brand for them.”

For example, about five years ago, Costco replaced Purdue’s $27, 10-pound frozen boneless chicken breast with a $21.99 version of Wayne Farms, said Marcus Walker, an associate purchaser of frozen foods at Costco from 2005 to 2020.

Cheaper items in other stores are also key to getting rid of.

Costco wants its products to be the cheapest option. Walker said she pulled Hot Pockets because they weren’t able to match Sam’s Club prices on the product.

Costco teams buy their suppliers’ products from competitor stores and test them to compare quality against Costco products. If they find an item that tastes better elsewhere, Walker said, they’ll ask the supplier to improve it for Costco — and if it doesn’t, Costco will look to replace it.

Another problem emphasized by the epidemic is the stability of product supplies. If a manufacturer can’t produce enough of an item, companies will stop selling it and replace it with something they can keep constantly on the shelves.

In 2020 and 2021, with customers stockpiling groceries in high demand during the pandemic, manufacturers halted production of many by-products to make only the most in-demand items. Even as demand slumps this year and factories return to operating at more normal capacity, manufacturers still don’t make as wide a variety of items as they did before the pandemic.

Hormel Foods (HRL), the maker of Skippy and Spam, and Mondelez (MDLZ), which owns brands like Oreo, are among the companies that recently said they were reducing the number of products they sell to focus on the most important one — performance.

Angela Ackerman, who runs the Costcoguide Instagram account with more than 230,000 followers, said Costco fans often ask her why they can’t find Costco’s dried dark chocolate mango in particular.

“They fall in love with something and want to see it again,” she said.

Scarcity can fuel sales, Ackermann knows. Whenever they see a notice at Costco that they won’t be selling a valuable item anymore, they buy more before they run out.”

#Costco #Trader #Joes #Stop #Selling #Favorite #Food #CNN #Business

Leave a Comment

Your email address will not be published. Required fields are marked *