Trader Joe’s Ex-President Opens High-Quality/Inexpensive Market for Poor

Newport Beach, CA

The former president of Trader Joe’s opened Daily Table as a non-profit grocery store in Boston’s “Southie” neighborhood of Dorchester. It offers high quality “sell-by date” and surplus food at huge discounts to help low-income grocery shoppers.

Doug Rauch opened the store on Thursday with the same wacky customer service for which Trader Joe’s is famous. Having successfully turned “TJ” into one of America’s favorite supermarkets, Rauch believes his business model can bring the type of higher quality grocery offerings to the poor, who have no other “value option” than the lower quality Walmart grocery shopping experience.

From about 7% of market share in 2002, Walmart currently captures about 25% of the grocery market in the U.S. Yet, America’s “favorite supermarket” by sales appears to offer the worst grocery shopping experience, according to the May 2015 issue of Consumer Reports. Of the 55 supermarket brands, Walmart was dead last in consumer ratings last year. The only category in which it did not earn low marks was price.

But as a grocery marketing phenom, Doug Rauch believes Daily Table can bring consumer satisfaction and incredibly low prices. With plans to soon open more stores in the Boston area, as well as locations in Detroit, Los Angeles, New York, and San Francisco, here are some of the prices this week at Daily Table, according to Supermarket News:

8-ounce frozen okra: 29¢
8-ounce frozen corn: 39¢
Can of tuna: 55¢
Box of cereal: 70¢
Dozen eggs: $1.19

In a Boston Globe article, Rauch explained that Daily Table is all about healthy and inexpensive food, rather than just profits. “Our job at Daily Table is to provide healthy meals that are no more expensive than what people are already buying,” Rauch said. “We’re trying to reach a segment of the population that is hard to reach. It’s the working poor who are out buying food, but who can’t afford the food they should be eating.”

The Daily Table stores also sell what Rauch calls healthy ready-to-cook meals and hot grab-and-go items with price points that are hyper-competitive compared to “cheap” fast food. “DT” entrees are priced starting at $1.79, with 50¢ to $1 side dishes.

The company’s website fully discloses that Daily Table will achieve its bottom tier price-point by getting wholesalers and higher-end markets’ donations of food that did not sell or are surplus. “We’ll be doing all of this by recovering food from supermarkets, growers and food distributors that would otherwise have been wasted. Hunger & wasted food are two problems that can have one solution,” according to Rauch.

Rauch first announced he would be opening Daily Table stores in September 2013 because he was frustrated by the amount of quality food that was thrown out by high end stores that were sensitive to customers concerns about stock approaching its stamped sell-by date. But Rauch was hit with a ton of bad press who claimed he wanted to dump food rejected by the rich onto the poor.

But for lower-income customers, going to superior-rated grocery stores usually is not an option. Trader Joe’s, Wegmans, Publix, and Whole Foods are seldom anywhere near the working class neighborhoods that Walmart services. By combining superior service with prices better than Walmart’s, the Daily Table may flourish across the nation.