Should Pirate Joe’s Walk the Plank?

Discussion
Sep 03, 2013

With no Trader Joe’s in Canada, a store has opened in Vancouver selling inventory bought at retail prices at Trader Joe’s locations in the state of Washington. Trader Joe’s has sued.

Originally opened up about a year and a half ago under the name, "Pirate Joe’s," the name changed earlier this year to "_irate Joe’s" after Trader Joe’s filed its lawsuit claiming trademark infringement and unfair business practices.

The motto of the store: "Better than nothing" A sign on the sidewalk proclaims: "Unauthorized. Unaffiliated. Unafraid."

"I bought the stuff at full retail. I own it," owner Michael Hallatt told NPR. "I get to do with it whatever I want to, including reselling it to Canadians. My right to do this is unassailable."

He adds, "There is no confusion in the marketplace. Pirate Joe’s, now _irate Joe’s, is blatant and unambiguous."

Some products are marked up more than double U.S. retail prices but are still often half the prices of similar items in local markets in Vancouver. An active resale market on Amazon and eBay promotes Trader Joe’s products, often at exorbitant markups, he claimed.

While the lawsuit continues, Mr. Hallatt told NPR he has long tried to get Trader Joe’s to offer some "guidance on how they would like me to operate."

In stocking up, Mr. Hallatt told the Los Angeles Times that he’s careful to take only a few of the desired items at each store to not disrupt inventory flow. Having been asked not to shop several locations, he’s hired others to pick up merchandise. But legally, the former Bay Area resident strongly feels he has the right to resell what he’s bought.

"The only way this is going to end is if Trader Joe’s opens in Vancouver," Mr. Hallatt told the Los Angeles Times. "I would love that. They would put me out of business, but I’d love that. I love their stuff."

Trader Joe’s, with a policy against commenting on pending litigation, hasn’t spoken publicly about the case. With no e-commerce, a resale market appears the only way for customers to acquire Trader Joe’s merchandise without visiting an actual store.

What do you think of Trader Joe’s response to its products being resold in Canada, where it doesn’t have a retail presence? What should stores and brands in general do about resale activity, whether offline or online?

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16 Comments on "Should Pirate Joe’s Walk the Plank?"


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Zel Bianco
Guest
8 years 8 months ago

This is a tough one. Many food cart vendors, small delis, and the like would be out of business if they didn’t have Sam’s, Costco, etc., to buy their inventory at “club” prices and resell them to the public. Given that Trader Joe’s does not have a location in Vancouver, there is not much that can be done, although I don’t believe Mr. Hallatt would “love” it if they did decide to open a store and put him out of business. Perhaps Trader Joe’s should hire Mr. Hallatt to “seed” the market for an eventual expansion of Trader Joe’s north of the border.

Gene Hoffman
Guest
Gene Hoffman
8 years 8 months ago

To Trader Joe’s I ask, what is your objective for suing? To make your lawyers richer or to promote TJ products prior to eventually opening stores in Canada?

Resale activity, honorable or not, has worked its way into today’s bag of retailing tricks. Trader Joe’s should ignore this activity by that reseller. It helps increase the aura of TJ’s and increases the hope that TJ’s will sell its own products in Canada in its own stores.

W. Frank Dell II, CMC
Guest
8 years 8 months ago

Just like diverting, the way you stop it is to stop selling. US labeled Trader Joe’s product does not meet the label standard for Canada which must have both English and French. The options are straightforward. Have the government force _irate Joe’s to stop selling for not meeting country standards. Trader Joe’s could open up a store, they could sell _irate Joe’s operator the Canadian or province franchise. If nothing works, sell direct to _irate Joe’s to keep the inventory pressure off stores, with a good margin.

Ian Percy
Guest
8 years 8 months ago

Sometimes the problem is so obviously the solution. Could Trader Joe’s have a more enthusiastic store manager than Mr. Hallatt…or a more receptive marketplace? Come on TJ, read the tea leaves!

If Trader Joe’s takes the stealth approach to Canada (unlike Walmart who acted like Canada was a backwater extension of the U.S.) open their typical smaller stores in strategic trendy locations (West Vancouver, Gastown, etc.) they would be an absolutely HUGE hit.

Mel Kleiman
Guest
8 years 8 months ago

I would suggest that this is not just a few items, but a potential for possible trademark infringement. They needed to take the action.

David Livingston
Guest
8 years 8 months ago

Trader Joe’s should just walk away from this. Why should they even care? Pirate Joe’s is just a mule service, importing their products into Canada. Trader Joe’s should even give Pirate Joe’s a discount and help them promote the Trader Joe’s name in Canada. Don’t make Priate Joe’s the enemy, make them your best friend.

Cathy Hotka
Guest
8 years 8 months ago

Wait…this guy walked into a Trader Joe’s and purchased hundreds of thousands of dollars worth of merchandise? Did he move it in the usual tiny TJ cart? Honestly, the logistics of this make no sense at all. Does he walk into a TJ’s and take all the eggs, all the milk, all the organic salmon? Crazy.

Warren Thayer
Guest
8 years 8 months ago

Trader Joe’s needs a bottle of Two-Buck Valium.

Kevin Price
Guest
Kevin Price
8 years 8 months ago

I understand the trademark infringement issue and can’t blame Trader Joe’s for suing. Seems somewhat laughable to me that the change from ‘Pirate’ to ‘_irate’ was made when the problem, I suspect, is the use of ‘Joe’s.’

But buying and reselling? It’s not clear from the article that that’s behind the legal action…and I can’t see why Trader Joe’s would mind anyway. I love seeing free enterprise at work and absolutely HATE seeing free enterprise efforts being crushed by ‘the big guy.’ But if the issue is trademark infringement, I’d probably side with ‘Trader’.

David Zahn
Guest
8 years 8 months ago

I would be interested in the legal requirements. On the one hand, the marketing implications are terrific to spread the gospel of Trader Joe’s. On the other hand, if products become tainted, go out-of-code or have other issues – does the shopper/consumer blame Trader Joe’s or not.

It feels like this “entrepreneur” is trying to hold Trader Joe’s hostage (I am not as quick to want to hire him – does he have the ethics a company would want in a leadership position?). I see this as gray vs. black and white, however, I am more aligned with the company than the individual on this one.

In terms of what to do – get out in front of the issue and announce to the market what your plans are (if strategically advantageous).

George Anderson
Guest
8 years 8 months ago

Pirate Joe’s seems to carry a very limited selection based on Yelp reviews of the store. The store appears to stock only shelf-stable items and none of the popular refrigerated and frozen items found in Trader Joe’s.

Ben Ball
Guest
8 years 8 months ago

As usual Gene Hoffman hits the salient nugget.

Anybody who grew up east of the Mississippi in the ’70s remember how we coveted “bootleg” Coors beer?

Tony Orlando
Guest
8 years 8 months ago

Another case of lawyers gone crazy. Trader Joe’s should consider this a compliment to their products, but NO, they want to put the guy out of business. This guy is a free marketer and I admire anyone who has some hustle to make money. Chill out and let the guy keep buying stuff at FULL RETAIL.

I’m a couple hours from Canada. Hmmm, maybe I can get someone from there to move some of my inventory….

Herb Sorensen, Ph.D.
Guest
8 years 8 months ago

Legally, this is no different than a shopping service, where an agent buys a list of merchandise, sometimes for multiple households, paying full retail price or more. I don’t think Trader Joe’s has a leg to stand on! Har. πŸ˜‰

vic gallese
Guest
8 years 8 months ago

What a compliment to TJ’s! You know they have Canada in their sights. Just a matter of when.
The lawsuit and proceedings will be good free pub for TJ’s. Can’t lose.

Craig Sundstrom
Guest
8 years 8 months ago

The obvious question that no one has asked (though “vgallese” came close): given this apparent demand, why DON’T they have stores in Vancouver (and elsewhere in BC and Canada)? Of course, it may be the high prices reflect a limited supply, and a full operation would be more reality-based.

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