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BUZZBATTLE: Trader Joe’s vs. Whole Foods — Which Health Foods Grocer do You Prefer?

trader joes vs whole foods

Grocery chains Trader Joe’s and Whole Foods both enjoy incredible success and massive followings. We explored each brand to discover what makes them oh-so popular and now we’re passing what we’ve learned on to entrepreneurs like you.

Read all about these fine grocers and if you’re a business owner (or hope to be) tell us which one you’d prefer to emulate.

The Contenders

Trader Joe’strader joes logo
Founded: Pasadena, CA
Year Founded: 1958
CEO: Dan Bane
HQ: Monrovia, CA
Number of U.S. Locations: 398
Annual Sales: $8B

Whole Foodswhole foods logo
Founded: Austin, TX
Year Founded: 1980
CEO: John Mackey
HQ: Austin, TX
Number of U.S. Locations: 350
Annual Sales: $11B

Founder: Joe Coulombe

After graduating from Stanford Business School, and earning his Master’s in Business Administration, Trader Joe’s founder Joe Coulombe took a job with drugstore chain Rexall. The company asked him to test a store named Pronto Market that would compete against the convenience store 7-Eleven. After operating six Pronto Markets in the Los Angeles area, Rexall told Coulombe to close them. An entrepreneur at heart, he bought them instead.

Ten years later, in 1967, Coulombe used his extensive industry knowledge to open the first Trader Joe’s. He stocked Trader Joe’s with items he felt would appeal to a highly educated consumer and smartly located the first Joe’s in Pasadena- a town recognized as well-educated. Just over a decade later, he sold his company to German billionaire Theo Albrecht, but stayed on as chief executive until he retired in 1988.

Founder: John Mackey 

Whole Foods co-founder John Mackey dropped out of college, but that hasn’t prevented him from making a major mark on the grocery industry.  In 1978, Mackey and his girlfriend Renee Lawson (Hardy) started a vegetarian grocery store named SaferWay. It wasn’t long before the two also operated a health food restaurant and then merged SaferWay with Clarksville Natural Grocery. The business was then renamed Whole Foods Market.

In 2006, Mackey astounded the business world when he announced that he was reducing his annual salary to just $1.00 and establishing an emergency fund for employees in need. According to Whole Foods newsroom page, Mackey “continues to work out of a passion to see the business realize its potential for deeper purpose, for the joy of leading a great company, and to answer the call to service he feels in his heart.”

Round One: Social Media Presence

trader joes logoSimply put, Trader Joe’s doesn’t have one. That’s right; scan Joe’s website or dive into your favorite social media outlet and you won’t discover an official Trader Joe’s account. In line with the company’s “no traditional advertising” marketing philosophy, Trader Joe’s hasn’t gone social.
whole foods logoOn the other end of the social media engagement scale, you’ll find Whole Foods. The company is well respected by marketers for its intense social media strategy. Whole Foods engages with it customers through Facebook, Twitter, Instagram, Pinterest, Google+, and YouTube. One reason why Whole Food’s social media approach works is because it fairly decentralized. Headquarters takes a hands-off approach and allows community managers at each store significant control. Whole Foods also effectively uses social media as a tool to better understand its buyer personas.

Round Two: Community Involvement

trader joes logoTrader Joe’s website doesn’t offer much information about community involvement; just two programs are mentioned. Trader Joe’s Food Donation Program focuses on fighting hunger. According to its website, the company donated more than 25 million pounds of food in 2010. That’s about the same as 656 truckloads of food or an amazing 20 million meals. Joe’s also donates food to food banks and soup kitchens.

Trader Joe’s In The Neighborhood program encourages employees to get involved in and give back to local communities. The site claims that in addition to countless employee volunteer hours, the company donated more than 102,000 gift baskets in 2010. All in all, Trader Joe’s community involvement is respectable, but failed to impress us.
whole foods logoThere appears to be a much greater focus on community involvement at Whole Foods. Its website offers several pages dedicated to community programming.

Projects include the Whole Planet Foundation which works to eradicate poverty in developing-world communities in which Whole Foods sources its products. 

The company’s Whole Kids Foundation is designed to support schools and encourage families to improve kid’s health and nutrition. Whole Foods’ goal is to eliminate childhood obesity. During its Community Giving Days, Whole Foods donates five percent of that day’s net sales to a local educational organization or nonprofit.

Round Three: Competitive Advantage

trader joes logoTrader Joe’s competitive advantage is the same today as it was in 1967 when it was founded. It turns your dreaded weekly shopping chore into a cultural experience that maintains mom and pop shop ambiance and does so at rock-bottom pricing. Visit Joe’s and you might think you’re strolling through an international farmer’s market that boasts a combination of budget staples and affordable luxuries.

Bonus: Trader Joe’s staff is incredibly knowledgeable and helpful.  And that’s something getting more and more difficult to find as massive discount stores continue to flourish.
whole foods logoWhile Trader Joe’s focuses on stocking an incredible variety of international food items at affordable prices, Whole Foods believes in supplying a vast assortment of wholesome, high quality foods that have a decidedly healthy twist.

In addition to being a brand that’s know for its natural and organic items, its “Whole Foods, Whole People, Whole Planet” motto has transformed the market into shopping experience that makes people feel good. And that’s certainly a competitive advantage that fewer and fewer businesses can tout.

Final Round: Which Is the Best Grocer?

We want to know: If you’re starting a new business or developing one that’s already off the ground, which specialty grocery store will you turn to for inspiration?

Alexia Chianis

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