Retailers

Trader Joe’s Talks Supply Chain, TP and a Return to Normalcy

Latest podcast goes behind the scenes during the pandemic
Photograph courtesy of Trader Joe's

Trader Joe’s—which has stood out from the pack in these uncertain times by communicating with consumers regarding everything from store locations where workers have tested positive for the coronavirus to temporary store closures for deep cleaning—knows one thing for sure: Shoppers want to be in the know on what’s happening at their local grocer due to COVID-19.

The Monrovia, Calif.-based grocer devoted its latest podcast to keeping shoppers in the loop with regard to its response to COVID-19, fluctuations in its supply chain, creative trouble-shooting and community donations in the face of a global pandemic.

A Slammed Supply Chain

At the outset of COVID-19, Trader Joe’s marketing team members Tara Miller and Matt Sloan said they had never seen anything like it.

“You want to make sure you’re going to be able to have food to feed yourself, to feed your family. I totally get it,” said Miller. “[But] it was a shock to our system, because you would walk into a Trader Joe’s that is always filled with product and the shelves in many cases were just empty.”

In some store locations, volume doubled, grinding “the support system to a halt,” added Sloan. As a small-footprint grocer, Trader Joe’s maintains a tighter amount of inventory in its distribution centers than large chains. As it strained to meet surging demand, “the product in the warehouses kind of disappeared,” Miller said.

Trader Joe’s calling card has long been its carefully curated, value-oriented, store brand-focused format. But pandemic-induced panic buying forced the grocer to shift gears immediately.

Suddenly it was selling 5-pound bags of rice, pasta sans the iconic Trader Joe’s branding on the package and single rolls of toilet paper without a UPC code.

In-Store Ingenuity

Like most grocers across the globe, Trader Joe’s was out of toilet paper—until it received a fortuitous email from an executive at an international hotel chain. With guest stays down dramatically, the hotel executive was flush with toilet paper.

“Within a week and a half, we had made a deal to buy toilet paper from this large international hotel chain that suddenly didn’t have guests staying in their hotel rooms,” Miller said. “We’re [now] selling individual rolls of toilet paper that were originally intended for use in hotel rooms.”

The rolls were priced at 69 cents each.

“Those weren’t retail-ready packages and specifically they didn't have … the UPC, so [they] didn’t scan at the register,” Sloan said. “And for a lot of retail businesses, that would be a make-or-break deal. But we figured out that, you know what, our crew is smart, they’re capable, we can figure out how to do this. We can ring it up manually. And that’s what we’ve been doing.”

The staff at its store in Saugus, Mass., turned single rolls of unbranded TP into a selling point by posting a sign that read: “April break getaway canceled? Don’t worry. Now you can enjoy a hotel toilet paper experience in your own bathroom.”

Shoppers who didn’t partake in the exotic hotel TP experience may be out of luck. Trader Joe’s reports that it expects to be back in stock on its store brand toilet paper by the first week of May.

Fresh Sales Slump Creates New Opportunities for Communities

As Trader Joe’s strived to meet the rise in demand across its stores, the game changed yet again, its officials said. Social distancing guidelines and stay-at-home orders resulted in consumers making less frequent trips. As a result, while sales of shelf-stable items such as rice and pasta and household items such as toilet paper were off the charts, refrigerated products took a hit.

“Right now, we are not selling as much … refrigerated product … dips and salads and fresh produce and things like that,” said Miller. “But if we suddenly tell our suppliers, ‘Um, we don’t want that right now,’ it’s entirely possible that [the] supply chain could disappear. Because if we’re not ordering a product, then they are not making the product. And then when we do want the product, will they still be able to make [it]? That’s where the Neighborhood Shares program … has really become even more important during this crisis,” said Miller.

Trader Joe’s Neighborhood Shares program donates 100% of products that go unsold but are safe for consumption. Drawing from more than 500 stores, the program works with more than 700 nonprofit partners to deliver food to people in need.

“Volume of product going out of our stores to our customers has slowed down because fewer people are shopping,” said Miller. “The stores don’t need to order as much from the warehouses, so we have more product sitting in our warehouses that would otherwise simply go to waste if we weren’t actively looking for people who needed it.”

As such, Trader Joe’s is working to share its surplus with its food bank partners across the country. In 2019, it donated nearly $384 million of food and beverage to its partners. And since March, Trader Joe’s has donated more than $51 million in food.

A Return to Normalcy

The podcast also shared input from front-line workers such as Fredo of Glendale, Calif., who said, “Everything’s kind of working like clockwork right now. I think things have normalized in a way, and we are finding a new normal. So I’m feeling good. I’m feeling comfortable. I think that we are all taking it day by day.

“The customers … have just been so understanding and also caring and attentive, and they’re constantly giving us compliments, and it’s created this atmosphere that we are all in this together … and it’s really brought the community a lot closer together.”

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