Trader Joe’s has long offered some of the lowest prices for groceries, but that could soon change.
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.
- Data from Wedbush Securities
Analysts said the basket at 365 would have been even cheaper if they had accounted for discounts through 365’s new loyalty program. They also suggested that 365’s private-label offerings are higher quality than Trader Joe’s.
“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.