Why Costco Stopped Selling Your Trader Joe’s Favorites

New York
CNN Business

You’ve probably been there: Head to Trader Joe’s for caramel popcorn, churro bites and roasted gorgonzola crackers, or Costco for Kirkland Signature mini peanut butter cups and to-go pizza.

But when you get to the store, your favorite foods are not on the shelf. And you’re terrified they won’t come back.

Their activity has been suspended.

This is one of the most frustrating experiences as a grocery shopper. One of the most common questions customers ask stores is why a favorite product has disappeared. Supporters run social media accounts dedicated to tracking discontinued products at Trader Joe’s, while others blog about long-lost items at Costco.

“We understand that this can be frustrating, even devastating,” Trader Joe’s says on its “discontinued product feedback” contact page for customers.

There are several reasons why Trader Joe’s, Costco ( COST ) and other stores suddenly stopped selling customer favorites.

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

But more often other strategies are at play.

One key factor: It’s hard to get and keep shelf space inside Trader Joe’s and Costco. These companies sell a limited number of products – only products that are most in demand by customers.

It’s a completely different strategy from supermarkets, as well as companies like Walmart ( WMT ) and Amazon ( AMZN ), which offer a wide variety of foods and brands. For example, Costco sells about 4,000 different products at any given time. Traditional supermarkets usually sell 40,000.

Both companies’ ability to keep prices lower than most of their competitors depends on delivering high volumes of top-selling items every minute, every day.

If a product doesn’t sell quickly enough on the shelf at Trader Joe’s or collects dust in Costco warehouses, companies have to move on to something else that customers will get.

Matt Sloan, Trader Joe’s vice president of marketing, previously said in a company podcast: “If you don’t have high volume or growing volume, the cost of manufacturing and handling a slow-selling product is so high that it doesn’t make business sense.” this year.

In other cases, it’s the product itself: Companies will pull items if suppliers raise the price too much or the quality declines.

“Costco would rather sell it than sell it too high,” says Chuck Howard, associate professor of marketing at Texas A&M’s Mays School of Business. “It would be off-brand for them to sell what consumers think will be too expensive.”

For example, about five years ago, Costco replaced its $27 10-pound boneless, skinless frozen chicken breast with a $21.99 Wayne Farms version, said Marcus Walker, assistant buyer for frozen foods at Costco 2005-2020.

Cheaper products in other stores are also grounds for elimination.

Costco wants its products to be the lowest priced option. Walker pulled Hot Pockets for not matching Sam’s Club prices on the product.

Costco teams buy their suppliers’ products from competitors’ stores and test their quality to compare with Costco’s. If they find a product tastes better elsewhere, they’ll ask the supplier to improve it for Costco, Walker said — and if that doesn’t happen, Costco will try to replace it.

Another issue highlighted by the pandemic is the stability of product supply. If a manufacturer can’t produce enough, companies will stop selling it and replace it with something they can keep on the shelves continuously.

In 2020 and 2021, with high demand from customers hoarding food during the pandemic, manufacturers stopped production of many secondary products to produce only the most in-demand products. Although demand has eased this year and factories have returned to more normal capacity, manufacturers are still not producing as wide a variety of products as they did before the pandemic.

Skippy and Spam maker Hormel Foods ( HRL ) and Mondelez ( MDLZ ), which owns brands like Oreo, are among the companies that have recently said they are cutting back on the number of products they sell to focus more. – performers.

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 dried dark chocolate mangoes in particular.

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

As Ackerman knows, scarcity can boost sales. When he sees a notice at Costco that a prized item is no longer on sale, he buys more before it runs out. “If I know it’s going to be gone, I stock up.”

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