Competition

I haven’t posted because I’ve been preoccupied with more pressing matters.

Listening to radio programs is something I enjoy, and one thing that recently caught my attention is Trader Joe’s business practices.

It's common knowledge that prices on many of their products are lower than the larger grocery store chains. While their dairy, nuts, nut butters, canned goods, pasta, rice, bread, cereals, and frozen fish are competitively priced, the quality of their fruits and vegetables leaves a lot to be desired.

I avoid buying any perishables that come in a bag because those bags are sprayed with chemicals to prolong shelf life. However, what surprised me is that Trader Joe’s has been accused of copying small businesses and undercutting their products on price. They seem to have modeled their business plan on what Zara does in the fast fashion industry.

In both cases, the low costs come at someone else’s expense. It's important to note that when prices are cheap, the consumer is happy but do they consider where it came from? Employees take the brunt in the background. This is evident in the fashion industry, with children working in Guatemala and others working for one dollar a day.

So, what does this mean in the food industry?

Small companies often invest years in creating a specialty item, spending a lot of money to market and merchandise it, sometimes creating a unique product that didn't exist before. However, Trader Joe's can come in, make a facsimile, and take advantage of all that hard work due to their resources. They have become masters of this business model. Let someone else make it, wait and see how popular it is, copy and manufacture it, and, presto with distribution set up, sell it in all your stores. There is no need for them to pitch it on Shark Tank, the system is in place.

It's difficult not to feel bad for small businesses but we have to acknowledge competition is part of the free enterprise system, the backbone of Capitalism with callous undercuts, warts and all.