Trader Joe’s locations: Why are they often in wealthy neighborhoods?

A typical Trader Joe’s is full of chatty employees wearing Hawaiian shirts, products with trendy labels and shopping carts full of pickle popcorn and kale gnocchi.

With no self-checkout counters or delivery services, each of the 500 stores is much smaller than a regular grocery store, to make it feel “like a neighborhood store,” President of Stores Jon Basalone said on the store’s podcast.

“Maybe you bump into somebody or a crew member and can talk about what you’re buying or products or what’s going on in your lives, that sort of thing,” he added.

Long checkout lines and crowded parking lots attest to the store’s popularity, while its secure spot in USA Today’s list of top 10 supermarket chains in the US affirms that.

The Trader Joe’s brand draws in customers, and the cheap prices and organic options — like the $0.19 organic bananas or the $2.69 organic hummus — motivate them to come back.

Lower costs can be attributed to their private labeling, said Eva Montoya, 23, a former crew member at the downtown Salt Lake City location.

Catering to an ability to “save every penny,” Trader Joe’s prices are an estimated 16% lower than competing stores. But is the chain willing to be accessible to communities that can greatly benefit from these cost-cutting prices and healthy food options? Is Trader Joe’s really a “neighborhood store” for every neighborhood?

The gap

Trader Joe’s offers affordable options, but mostly to well-off neighborhoods. A recent study focused on Southern California found that the grocery chain had more locations “in regions of upper-middle class income as opposed to lower and upper-class incomes.”

Montoya, who initially worked at a Santa Barbara Trader Joe’s location, also noticed that the two locations in the area were in wealthy neighborhoods.

In essence, Montoya is a second-generation Trader Joe’s employee: Her parents worked for the chain in the early 2000s, as did her uncle in the ’80s. The Montoya family has often wondered why lower-income folks didn’t shop there — was it the price or the location?

This year, Trader Joe’s expects to open six new locations, from Santa Monica, California, to Miami, Florida. But the list doesn’t include any rural areas in the Western, Midwestern and Southern regions of the US where people typically struggle to gain access to nutritious food, also known as “food deserts,” according to the Department of Agriculture.

California has 192 Trader Joe’s locations, while Utah has only three — two of which, Salt Lake City and Cottonwood, are in regions with higher median household income, $80,196 and $93,563, respectively, than the state median of $74,197, while the location in Orem is one of the biggest retail centers in Orem and Utah Valley.

The reality is that over 53 million people live in communities that have easier access to grape soda than a handful of grapes. Living in such a neighborhood can lead to poor diet, increased obesity levels and other diet-related diseases.

The term “food desert” makes the phenomenon appear naturally occurring, even though the problem is a “result of systemic practices, such as redlining, that have caused disinvestment and a subsequent lack of grocery stores,” explained Caroline Harries, acting director at Healthy Food, an organization that advocates for food justice.

Rural areas, with declining populations, distribution problems and regulatory barriers such as signage and parking requirements, aren’t the ideal place for a grocery store, she added.

behind-the-scenes

Trader Joe’s, the “neighborhood grocery store,” has shown its commitment to diversity and inclusion by buying 15% of items from Black-owned businesses and donating food to extend its reach, but the store continues catering to a specific clientele. Business Insider described a typical customer as a married person who lives in an urban area, is 25 to 44 years old and earns $80,000.

This held true more than two decades ago as well.

“Basically we feel that the demographics of the area fit well with our target. We saw a very educated base of individuals who are curious and are interested in food,” said Michele Gorski, Trader Joe’s spokesperson, in March 1997.

“Our customers are highly educated and adventurous. They are interesting people that like to explore different eating options.”

The stereotype that low-income areas aren’t interested in nutrient-rich food is a misconception and there is actually a greater demand in those neighborhoods than retailers realize, said Harries. One study found that people associate low socioeconomic status with fewer food skills, less knowledge about food and less desire for nutritious food options.

A participant in the study said, “A lot of low-income people are used to highly processed foods … and may not buy fresh or local if it were less expensive.” Another said, “They haven’t made the connection … that food is going into my body, and that’s the most important thing that I can do for my own health.” But these opinions aren’t always based on facts.

So, if any chain grocer moves into an underserved community, does that fix the issue of food access hierarchy?

Just a Band-Aid

Perhaps the problem isn’t just the lack of a Trader Joe’s or Whole Foods in an impoverished area, but the absence of power millions of Americans have over food.

For example, there are plenty of urban farms in west Salt Lake City, “but lots of that food gets exported over to east side communities. Are there structural things that we could be doing, to give folks sort of more control over their own food systems?” said Dr. Adrienne Cachelin, an environmental and sustainability studies professor at the University of Utah and the director of the SPARC Environmental Justice Lab.

Building big-box retailers in these areas may not be the most sustainable approach, as they can become the biggest threat to community-based efforts, she added.

In 2014, a historically African American neighborhood in Portland, Oregon, was resistant to a Trader Joe’s moving in, stating that it “does not primarily benefit the Black community” because it would “increase the desirability of the neighborhood” — in other words, it’s a recipe for gentrification.

A street-level Whole Foods or Trader Joe’s can raise the rental rate premium by an average of 5.8%, according to a Real Estate Consulting report, resulting in locals being displaced.

Before Montoya quit working at the grocery chain, she considered transferring over to a new location. She wondered where that could be.

“We know that wherever they build a store next in Utah is going to be like the next gentrified town,” she said.

Maybe the solution isn’t simply building food retailers to reduce the food insecurity gap, but to think of holistic and creative solutions — like promoting locally grown food and matching produce at a Trader Joe’s with urban agriculture, said Cachelin.

“Who are the people that live in these areas that other people are calling food deserts?” she said. “What do they want?”

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