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Gap widens between Trader Joe's and Whole Foods

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Wed, 14/05/2014 - 15:40
Ted Marzilli
Trader Joe's and Whole Foods

Whole Foods’ stock has been on shaky ground lately, plunging by 19% on May 7th from flat earnings. Rival Trader Joe’s, meanwhile, is widening the gap between itself and Whole Foods in two key metrics – potential sales as measured by purchase consideration, and general consumer perception.

While Trader Joe’s has been in the lead position since the beginning of the year, in mid-March key metrics for the two chains began to diverge even more. Of particular importance is the growing difference in purchase consideration, since it is directly related to potential consumer sales.

At the beginning of the year, there was a three percentage point difference between the two chains in the percentage of consumers who said they would consider the two stores the next time they were grocery shopping. That gap has now widened to a five percentage point difference, and at one point in early April it reached seven points.

Mirroring purchase consideration is the overall consumer perception of the two chains, but with a wider variance. We measured consumer perception utilizing YouGov BrandIndex’s Buzz score, which asks respondents “If you've heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?" With a scale that ranges from -100 to 100, with zero indicating an equal amount of positive and negative feedback. The gap in Buzz scores moved from a three point to a seven nt difference at the beginning of the year to a 10 point difference today. Trader Joe’s current Buzz score is 17 while Whole Foods stays at 7.

Trader Joe and Whole Foods were measured with two of YouGov BrandIndex’s scores: Purchase Consideration (“When you are next in the market to purchase products in this specific category, from which of the following would you consider purchasing?”) and Buzz. All respondents are adults age 18 and over.

Buzz: Trader Joe's, Whole Foods
Buzz: Trader Joe's, Whole Foods
Purchase Consideration: Trader Joe's, Whole Foods
Purchase Consideration: Trader Joe's, Whole Foods
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