Deutsche Bank said its recent pricing study in NYC showed Trader Joe's had a significant price advantage. The analysts conducted a price check to see, if, in fact, a meaningful price gap existed. What's ridiculous is that they were actually surprised by the results. Well we all know that prices haven't been lowered in any meaningful way, because the problem is the high overhead caused by bad decisions and the do-nothings at regional and global. TJs (and its sister company, Aldi) runs with stunning efficiency. Meanwhile we have a bunch of nincompoops flying around the country or driving all over the place every day slurping wine and ordering unnecessary changes in how the oranges are stacked. Competitors' promotions and pricing are simple instead of the wasteful high-low-high-higher strategy of constant changes (and errors).
"The analyst has three observations from the recent WFM/TJ's checks. First, it was found that TJ's had a wide price advantage, with a basket of 77 SKUs priced 21 percent below WFM. Second, TJ's had a clear pricing advantage across both perishables (WFM was +30 percent above) and non-perishables (WFM was +24 percent above).
"In fact, we found that TJ's had lower prices on 78% of the items checked, while WFM had an advantage on just 9% of the items (13% were at parity)," the analyst said.
Third, the analyst's checks found that TJ's private label was priced at a 15 percent discount to WFM's private label. Hilariously, the analyst stated "this was a surprise as WFM has historically been very focused on matching TJ's prices on private brands."
These brokerage analysts should do reality checks more often. Visit ANY competitor and you will find the same stuff (or better) for less money. The ineptitude, inefficiency and incompetence continues. Why any analyst is surprised by these findings is absolutely stupefying to me.
http://www.benzinga.com/analyst-ratings/analyst-color/16/03/7771474/trader-joes-might-be-once-again-catching-whole-foods-off