Chances are you’ve been there: you head to Trader Joe’s for caramel popcorn, churro bites and roasted gorgonzola crackers, or Costco for its Kirkland Peanut Butter Mini Cups. Signature and its take-out pizza.
But when you get to the store, your favorite treats aren’t on the shelf. And, to your horror, you learn that they won’t be coming back.
They were interrupted.
This is one of the most disappointing experiences as a grocery store. Why a beloved product disappeared is one of the most common questions customers ask stores. Fans run social media accounts dedicated to tracking discontinued products at Trader Joe’s, and others blog about long-lost items at Costco.
“We understand that this can be disappointing, even devastating,” Trader Joe’s says on its “Discontinued Product Feedback” contact page for customers.
There are several reasons why Trader Joe’s, Costco (COST) and other stores suddenly stop selling customer favorites.
Sometimes products are seasonal or a manufacturer has always planned to produce them for a limited time. Additionally, for stores like Costco and Trader Joe’s, stopping items can enhance the appeal of these stores as a scavenger hunt.
But more often than not, other strategies are at play.
One major factor: It’s hard to get shelf space inside Trader Joe’s and Costco and stay there. These companies sell a limited number of items – only the products most in demand by customers.
This is quite a different strategy from supermarkets, as well as Walmart (WMT) and Amazon (AMZN), which carry a wide range of foods and brands. Costco, for example, sells around 4,000 different products at any given time. Traditional supermarkets usually sell 40,000.
The ability of both companies to maintain lower prices than most of their competitors depends on turning over high volumes of top-selling merchandise every minute, every day.
If an item isn’t selling fast enough on Trader Joe’s shelves or piling up in Costco’s warehouses, businesses have to move on to something else that customers will buy.
“If you don’t have high volume or growing volume, the costs of producing and managing a slow-selling product are such that it doesn’t make business sense,” said the vice president of the Trader Joe’s marketing, Matt Sloan, in an earlier company podcast. This year.
Other times it’s the product itself: companies will pull items if suppliers raise the price too much or drop in quality.
“Costco would rather not sell an item than oversell it,” said Chuck Howard, assistant professor of marketing at Texas A&M’s Mays Business School. “It would be off-brand for them to sell things that consumers think are overpriced.”
For example, about five years ago Costco replaced a $27 10-pound frozen boneless skinless chicken breast from Perdue with a $21.99 Wayne Farms version, said Marcus Walker, assistant buyer at frozen foods at Costco from 2005 to 2020.
Cheaper items in other stores are also to be eliminated.
Costco wants its products to be the cheapest option. It pulled Hot Pockets because it was unable to match Sam’s Club pricing on the product, Walker said.
Costco teams buy their suppliers’ products from competing stores and test them to compare the quality to Costco’s. If they find an item tastes better elsewhere, they’ll ask the supplier to upgrade it for Costco, Walker said — and if that doesn’t happen, Costco will look to replace it.
Another issue, which the pandemic has highlighted, is the stability of product supply. If a manufacturer can’t produce enough of an item, companies will stop selling it and replace it with something they can still keep on the shelves.
In 2020 and 2021, as customer demand stocked up on groceries during the pandemic, manufacturers halted production of many secondary products to produce only the most in-demand items. And even though demand has waned this year and factories have started operating again at more normal capacity, manufacturers are still not making as wide a variety of items as they did before the pandemic.
Hormel Foods (HRL), the maker of Skippy and Spam, and Mondelez (MDLZ), which owns brands like Oreo, are among the companies that recently said they were reducing the number of products they sell to focus on their top – the achievers.
Angela Ackerman, who runs the @Costcoguide Instagram account with more than 230,000 followers, said Costco fans often ask her why they can’t find Costco Dark Chocolate Dried Mangoes in particular.
“They fall in love with something and want to see it again,” she said.
Scarcity can fuel sales, as Ackerman knows. When she sees a notice at Costco that it will no longer sell a popular item, she buys more before it runs out. “If I know it’s going to disappear, I stock up.”
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