Trader Joe’s Discusses Painstaking Site Selection Process

On a recent episode of the "Inside Trader Joe's" podcast, Matt Sloan, VP of marketing, discussed the slow and meticulous process the grocer undertakes in deciding where to open a new store.

“We'd like to be in neighborhoods all around the country, but it takes time,” said Sloan. “We're not going to rush it because rushing it would result in stores that don't live up to our expectations or quite honestly, to our customers’ expectations.”

The episode addressed a common question Trader Joe’s often gets from customers: “How do I get a Trader Joe’s in my neighborhood?”

Offering a few insights, Sloan cited population density as a critical metric in site selection. Sloan said, “We need lots of people to be customers in any of our stores. So, I'd say first and foremost, we're looking where people are.”

An ideal spot may be an area where there are no Trader Joe’s or a more densely populated area that has other Trader Joe’s but traffic patterns present challenges for customers in the area when trying to reach other stores.

Having enough parking is also high on the list of criteria for site selection. Sloan said, “We want to make sure that we're putting stores in places where it's relatively easy to get in and out.”

Sloan further noted that Trader Joe’s doesn’t look to grow by acquisition and purposely seeks out distinctive real estate opportunities. He said, “We're not interested in growth by just buying another chain and putting a different sign on the building. It wouldn't really feel like a neighborhood Trader Joe's. So, we're looking at things that are opportunities for us to make that neighborhood store a great Trader Joe's for that area.”

The calculated approach to expansion also reflects the time it takes to train employees who are often new to Trader Joe’s.

Sloan further said pleas on social media from consumers to open a location in their town “don't have much, if any, impact” on site selection, noting that site selections are ultimately “business decisions” that take in a number of other criteria.

According to Sloan, Trader Joe’s, with more than 550 locations, is currently analyzing over 1,000 potential sites to identify the ones with the best chance for success. The grocer is opening 26 stores this year. Sloan said, “With such a deliberate process and so much time and energy behind it, none of this is casual. We're not just flippantly opening a store location to see like maybe that works and then closing it a few years later. This is very deliberate, and for us, what's important is that it's controlled growth.”

Beyond access and demographics, a white paper from Accruent, a developer of contract management software for retailers, cites proximity to competitors, proximity to suppliers and logistics, and costs as other key factors in site selection for retailers.