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a photo of a Trader Joe’s storefront

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In its recent history, Trader Joe’s has been fairly open about answering customer questions, including if they will everintroduce self-checkout in storesorwhy they don’t sell products online.

And in this month’sInside Trader Joe’spodcast episode, hosts Tara Miller and Matt Sloan helped answer another frequently asked question: How does Trader Joe’s set prices on groceries? Why are some of TJ’s prices more budget-friendly than their competitors', and why are others on the more expensive side? Here’s what to know.

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First, it’s important to note that grocery stores are experiencing inflation across the country due to various supply chain disruptions, stemming from issues like drought andavian flu. A common pantry staple that has borne the brunt of this is olive oil—and TJ’s employees explain why.

“Supply has been a bit challenged,” explains invited guest Chris, a senior category manager at Trader Joe’s. “Olives grow in places that have had a little bit less rainfall and a little bit more heat. Spain’s the biggest grower of olives, and they’ve had a couple bad harvests in a row.”

Spain supplies over half of the world’s olive oil, so it’s no wonder that olive oil prices have skyrocketed—even at Trader Joe’s.And Chris claims that the grocery chain doesn’t change their retail prices unless necessary, like when the cost of supply changes.

“When we’re lowering prices, we are all a lot happier than when we’re raising prices,” he explains. “We are very, very reluctant to raise our retails. That’s like the decision of last resort. When costs are going down, we don’t wait. We lower the retails the second we find out the cost is going down. We’re going to always offer a great value on our olive oil relative to everybody else, and the best value we can.”

On that note, there are a few products with notably low price tags at Trader Joe’s. This is because TJ’s does not use a cost-plus-pricing model (a system that promotes automatic markups on price points) and instead claims to keep grocery prices as low as possible.

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The Bottom Line

Trader Joe’s claims it will only raise its prices if the cost of supply increases, and the company aims to keep prices as low as possible for its customers.

“Sometimes our prices are going to go up because costs change in the world,” Miller emphasizes. “But if our costs go down, and they often do, we lower our retail prices for our customers almost immediately. That I think really sets us apart from other folks who sell groceries.”

With grocery stores like TJ’s and Aldi maintaining a price promise, we’re able to shop at our favorite places in a budget-friendly way. For more money-saving grocery tips, take a look athow a dietitian on a budget organizes her grocery list.

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SourcesEatingWell uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable and trustworthy.Inside Trader Joe’s.ICYMI: How Does Trader Joe’s Set Prices?U.S. Department of Agriculture’s Foreign Agricultural Service.EU olive oil production updateCalifornia Department of Food & Agriculture.California agricultural exports 2019-2020U.S. Department of Agriculture’s National Agricultural Statistics Service.2024 California almond forecast

Sources

EatingWell uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable and trustworthy.Inside Trader Joe’s.ICYMI: How Does Trader Joe’s Set Prices?U.S. Department of Agriculture’s Foreign Agricultural Service.EU olive oil production updateCalifornia Department of Food & Agriculture.California agricultural exports 2019-2020U.S. Department of Agriculture’s National Agricultural Statistics Service.2024 California almond forecast

EatingWell uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable and trustworthy.

Inside Trader Joe’s.ICYMI: How Does Trader Joe’s Set Prices?U.S. Department of Agriculture’s Foreign Agricultural Service.EU olive oil production updateCalifornia Department of Food & Agriculture.California agricultural exports 2019-2020U.S. Department of Agriculture’s National Agricultural Statistics Service.2024 California almond forecast

Inside Trader Joe’s.ICYMI: How Does Trader Joe’s Set Prices?

U.S. Department of Agriculture’s Foreign Agricultural Service.EU olive oil production update

California Department of Food & Agriculture.California agricultural exports 2019-2020

U.S. Department of Agriculture’s National Agricultural Statistics Service.2024 California almond forecast