Professor Sheri Bridges Discusses How Trader Joe’s Will Impact Grocery Consumers in Winston-Salem

10.21.2012 Article, Faculty News, Retail

Other grocers likely to feel some effects from new Trader Joe's store

Reposted from Winston-Salem Journal | by Fran Daniel
Devoted fans of Trader Joe’s have just a few more days of waiting before the retailer opens its newest location at Thruway Shopping Center in Winston-Salem.

Several retailers at Thruway, which is owned by Saul Centers, have said they expect to start reaping benefits from the large number of people expected to shop at Trader Joe’s when it opens Friday.

And nearby grocery stores may feel some effects too, experts say, although perhaps not in such a positive way.

A Harris Teeter store is already at Thruway and there’s another one less than a mile away on Cloverdale Avenue, Whole Foods is less than a mile away on Miller Street and The Fresh Market is 4.4 miles away on Robinhood Road.

“I’m sure they’re probably all going to feel it,” said Britt Beemer, the chairman and founder of America’s Research Group, based in Charleston, S.C. “The thing is, where are they going to feel the most amount of pain? Will it be in the produce section? Will it be in the meat section?”

Trader Joe’s is known for selling inexpensive Charles Shaw wine, which has become known as Two Buck Chuck, although it sells for about $3 at stores in North Carolina.

“If they do well with their wine sales, it may impact some of the liquor stores and wine stores around them,” Beemer said.

Beemer said that Trader Joe’s has a very loyal shopper base and gets a lot of repeat customers. He added that the store’s advertising will play a part in any impact on other grocers, affecting a few stores if it focuses on the zip code area around Thruway but affecting more retailers if its ads expand into Greensboro.

Sheri Bridges, the faculty director of the Center for Retail Innovation and a marketing professor at the Wake Forest University Schools of Business, said that competition is good for consumers because it makes other companies sit up and pay attention in areas where they may have grown complacent.

“Because some competition has come to town, it will cause them to really do their homework and figure out what they can do to protect their market share, keep their customers and compete against this new kid on the block,” she said.

“I think we’ll see more of these other stores doing maybe more cooking demonstrations, possibly more sampling, introducing more seasonal merchandise that is very specialized for the particular season,” she said.

Ray Collins, the president of Collins Commercial Properties Inc. in Winston-Salem, considers Trader Joe’s more of a specialty retailer than a grocery store — one that draws from a broader customer base than the traditional grocery stores.

He said people tend to drive from long distances to shop at a Trader Joe’s.

“Harris Teeter, Whole Foods and Fresh Market may feel a little bit of a sales loss when Trader Joe’s opens, but I think their sales will return to their prior levels quickly, if they go down at all,” he said.

Drewry Sackett, a spokeswoman for The Fresh Market, said that company officials have found that there is always room for good business operators.

“Our concept is quite different from theirs,” she said of Trader Joe’s, “and we have found in other markets that our stores can often complement one another.”

Danna Jones, a spokeswoman for Harris Teeter, said that the supermarket chain would remain focused on offering its customers “the absolute best in customer service and high quality products at competitive prices.”

Officials with Whole Foods declined to comment.

Alison Mochizuki, a spokeswoman for Trader Joe’s, declined to give specifics when asked how Trader Joe’s has affected other grocery stores when the chain enters new markets.

She said it’s hard to predict what the future will hold for the chain in Winston-Salem but company officials hope their store will be embraced by the community.

One thing is for certain. Trader Joe’s opening day is expected to bring out its fans as well as people who are curious about what has caused all the commotion over the chain in recent months.

“The opening of Trader Joe’s is going to be like Black Friday at Walmart or a shopping mall,” Bridges said. “It really is. People will be standing in line. There will be this sense of excitement. There will be the rush to get in the door. It will be just general craziness.”

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