January 19, 2009
Trader Joe’s Vs. Trader John’s
By Tom Ryan
Gristedes recently
revamped its 14th St. location in Manhattan with a new format, sign and
name – Trader John’s. Trader Joe’s, whose wildly-popular first store in
New York City is located three blocks away, sued the New York City supermarket
chain for outright copying its formula.
On Friday, a city judge
ruled in favor of Trader Joe’s cease-and-desist request, agreeing that Gristedes’
name for the location and red lettering were too similar to Trader Joe’s.
"Of all the possible
names … he just had to pick the name of a store a few blocks away with
a long line of people outside,"
Trader Joe’s lawyer, Dale Cendali told MSNBC.
In its earlier 51-page
complaint, Trader Joe’s argued that Gristedes had
the store "gutted, renovated and renamed and redecorated to make it
appear more similar to Trader Joe’s," and called the renovation a
"blatant attempt to confuse consumers and capitalize on Trader Joe’s
hard-earned goodwill."
The lawsuit, according
to The New York Post, also cited online critics calling the former Gristedes at
the location "especially crappy" and "one of the filthiest
of all the filthy, overpriced Gristedes." Lawyers
said the "low quality" of that store, made "its attempted
passing off as a Trader Joe’s even more harmful by diluting and tarnishing
of the Trader Joe’s trademarks."
Gristedes’
lawyer Larry Weinstein had argued that no one would mistake Trader John’s
for Trader Joe’s because the new store wouldn’t be selling any of Trader
Joe’s house brands.
Before the judge’s ruling, Gristedes’
spokesman Gerald McKelvey told the Post that
Trader John’s was a prototype "to see if we can sell groceries
less expensively."
The idea came from Gristedes’
owner John Catsimatidis, a billionaire who made
most of his money in energy and real estate. Mr. Catsimatidis told Bloomberg
News prior to the judge’s ruling that the case had no merit. He said, "My
name is John and I am a trader, so I don’t know what their problem is."
Discussion Question:
What do you think Gristedes was thinking with
Trader John’s? Considering the success of Trader Joe’s, why haven’t more
grocers attempted a similar format? Are there particular challenges a
chain would face if it wanted to set up a format similar to Trader Joe’s?
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Anyone who knows John Catsimatidis knows that he is not among those to be taken seriously. “Trader John’s” is a manifestation of his ego, poor judgment, and lack of creativity. He is, sadly, a cartoon character.
What were they thinking? Nothing bright, that’s for sure. And nothing very creative either. Sure, you don’t have to reinvent the wheel to be successful, but you don’t have to steal it either.
At the heart of all winning retail concepts is uniqueness. There’s nothing unique (or ethical) at ‘Traitor John’s’.
This was an attempt by Gristedes to raise the awareness of their stores, and gain publicity for their chain. They certainly accomplished this, and the buzz continues to occur, as is indicated by the fact that we are writing about the chain on RetailWire.
The reasons other chains don’t attempt to exploit the limited assortment, private label concept is that they don’t have a strong belief in their own PL program. Retailers who believe that their PL products are just as good or better than the national brands have the best shot at making this a success, and don’t be surprised if Whole Foods takes a look at replicating Trader Joe’s with its 365 brand, and opens up limited assortment stores in the Natural market.
Incredible…I hope there are/were punitive damages assessed….
Hmmm…think I’ll gather some international merchandise and some divinely scented candles and open a store called “Pier Two”….
Hey, the guy’s rich and he’s having some fun irritating a grocery chain that’s very impressed with itself. If Catsimatidis can afford the cost of his “game,” I say go for it. What is Trader Joe’s afraid of? If they’re so much superior to Trader John’s, it’s only a matter of time until they put Trader John’s out of bidness the old fashioned way–by outselling them.
And let’s not take ourselves so seriously, either. Trader John’s is just a fun experiment that doesn’t cost us anything, and doesn’t deserve the time spent on our high-minded critiques. Instead, it’s just entertainment. During these times, we could loosen up and have a little fun, don’t you think?
It is hard to believe they couldn’t think of a more original name. Why not choose a new name that builds on their existing image? They get an “F” for creativity in my opinion.
While this case seems to represent a clear case of trademark infringement–indeed so clear cut it’s good for amusement value–it does highlight the broader issue of protecting brands/trademarks vs. “legitimate” competition: the latter inevitably involving “copying” of something, yet essential for a free economy; I remember a case a few years ago in which Sephora sued Macy’s on the grounds that the latter had copied the “look and feel” of S’s stores (or something along those lines); unfortunately I don’t remember the outcome of the case, but I found the entire premise of the litigation disturbing.
John Catsimatidis opened his first Red Apple a block and a half from where I am writing this. Neighbors called it “Rotten Apple” for the ambiance. His father, uncle and girl friend (now wife) worked the registers. He has made a lot of money in grocery (and other businesses) since then and wants to run for Mayor of New York. Mike Bloomberg he ain’t, but this maneuver got his picture all over the newspapers and on TV. Chalk it up to campaign expenditures. Trader Joe’s was just a handy foil.
It wouldn’t have been totally stupid to adapt some of Trader Joe’s best practices–and I do mean adapt, not adopt–but coming up with such a similar name was indeed totally stupid. No excuse for sticking out your chin with a big sign that says “hit me.”
It just makes Gristede’s look tacky. I feel badly for some of the good and dedicated people who work there; it must be embarrassing for them. As someone mentioned, punitive damages are in order.
Independent of any facts relative to this case alone and strictly in my own opinion, it’s just completely unnecessary to rip off another company’s “name” in order to be successful in what basically might even be the same concept.
They were thinking they could fool all of the people some of the time. Trader Joe’s is unique. Copying them just makes the original all the more appealing.
Mr. Catsimatidis probably did this for self amusement to see what he could get away with. I doubt he is very upset with the loss in court.
Any retailer can copy the Trader Joe’s format but that’s the easy part. Copying the culture is something entirely different. Trader Joe’s is not so much a retailer but is more of a cult. That is something that has taken years to develop and cannot be copied overnight.
Aldi is another successful retailer that no other retailer has been brave enough to copy. They are the only grocer that isn’t afraid of opening in Wal-Mart’s parking lot. They have set up their entire operation of opening just one type of format. Most other grocers simply cannot devote 100% of their time to this kind of operation.
It’s sort of a bad example of reinforcing the stereotype that New Yorkers think that civilization ends at the Hudson River. Not only a bad business idea, but a bad PR move. Why acknowledge that you think you need to ride their coattails if you have come up with something better? If it’s not better, then why do it?
There are no Trader Joe’s in Denver, so I had never seen one until last week, when by chance I managed to find my way to exactly the 14th St. store in question. I didn’t see the Trader John’s, but it was cold and snowing, and for some bizarre reason there were a bunch of college students walking around with no pants on. But I digress…
I don’t think that I got to fully experience Trader Joe’s that night because the place was so packed that they were probably violating their fire code on occupancy. Every register had a line at least 10 people deep–to the point that they had employees with signs standing at the end to indicate where the line began. I have never seen a grocery store–short of pictures in the press after natural disasters–that had whole 4-foot sections of shelving completely empty. I mean laid to waste–not a single crumb left. I would’ve bought something, but sheesh! It would have taken me an hour, assuming I didn’t have to fight someone for the last pack of dried cherries or something.
When you see that kind of devotion, it’s hard not to be tempted to try to tap into that. But if you’re going to try it, tap into those things that make people passionate. I’ve never understood people who try to copy the surface things about a brand. You pretty much only get to fool people once, and then they never come back–and nowadays they tell not only their friends but post it on blogs for everyone to read. And there may be a big lawyer bill to pay on top of it all.
I agree with Warren–TACKY! This was obviously a publicity stunt because nobody could be so stupid as to think they could get away with that. He probably thought once he got people into the store they would buy things there.
Having worked for Frito-Lay years ago, I can tell you that we were constantly picking up product made by small local and regional snack companies around the country. The packaging and brand identity were obviously very close rip-offs of F-L brands and meant to confuse or copy the leader. This is kind of common with small businesses, It’s usually a result of not being familiar with the trademark laws.
Gristedes either was not smart enough to seek a good trademark attorney or the one they had was not the brightest. Papa Joe’s Pizza and Papa John’s Pizza seem to coexist, but one could surely anticipate that Trader Joe’s was not going to tolerate a Trader John’s.
Trader Joe’s has more at stake in this battle and also a much deeper pocket. The cost of defending against a legal complaint by Trader Joe’s would be very high. Moreover, I believe consumers attracted to this type of operation would be put off by this transparent attempt to hijack Trader Joe’s name. The name Trader Gristedes would certainly have adequately communicated to the public that this was a store like Trader Joe’s from Gristedes.
Personally I am not a big fan of all this natural and organic stuff–a distinction without a difference. I have been tempted to ask the hip young ladies I see shopping there if they checked to make sure the inks used for their tattoos were natural and organic.
Honestly, how stupid can you get?
It was a dumb idea, but…has anyone seen the private label of the foods sold at Aldi? Some of their private label emulates the national brand labels, with a few slight changes. I guess its ok for them to pay homage to the national brands, with their lookalike items. Just something to think about….