Trader Joe’s plans to cease grocery delivery services from its stores in Manhattan.
In an e-mail statement, Trader Joe’s said its seven stores in the city will end grocery deliveries effective March 1. The Monrovia, Calif.-based grocery chain, part of Germany-based Aldi Nord, cited cost and wide availability of other delivery services in the area as reasons for the move.
“When we originally introduced delivery, we had one store on 14th Street in Manhattan, options for outside delivery services were limited and ride-sharing meant hopping into a taxi with someone else. Today, there are seven Trader Joe’s stores across Manhattan, with more on the way, and services for transporting food and people abound,” Trader Joe’s stated.
“What hasn’t changed is our focus on providing our customers with the best-quality products for great, everyday prices,” the company said. “Instead of passing along unsustainable cost increases to our customers, removing delivery will allow us to continue offering outstanding values and to make better use of valuable space in our stores.”
At this time, Trader Joe’s doesn’t plan to launch grocery delivery in other markets, according to Business Insider, which first reported the retailer’s decision to stop grocery delivery service in Manhattan.
Unlike other leading grocery retailers — such as Walmart, Whole Foods Market and Kroger, among others — Trader Joe’s doesn’t provide an online grocery shopping and delivery service.
Currently, third-party services such as Postmates and Envoy deliver from Trader Joe’s in some states.
Trader Joe’s boasts an extremely loyal base of customers and has no difficulty drawing shoppers to its stores, which in major metropolitan markets typically draw big crowds during prime hours. Overall, the retailer operates more than 470 locations in 43 states and Washington, D.C.
Earlier this week, a new study from facilities management company Vixxo found that 87% of consumers prefer to shop for groceries in stores, despite the rising array of options for buying online. Of over 1,260 U.S. consumers surveyed, 84% said they like being able to pick out their own products, and 60% prefer the experience of shopping in brick-and-mortar stores. In addition, 96% of Baby Boomers and 81% of Millennials polled indicated they favor the in-store experience to online for grocery shopping.
Still, the increasing rollout of delivery and pickup services is shifting online grocery sales more to brick-and-mortar retailers, according to Brick Meets Click. This year, companies that provide online grocery delivery and pickup on demand stand to grow sales 25% to 30%, the strategic advisory firm projected. Overall U.S. consumer spending online for groceries will rise an estimated 15% next year, lifting online share of grocery sales to 6.3%.