There’s a good chance you’ve been there. You go to Trader Joe’s for caramel popcorn, churro bits, and roasted gorgonzola crumpets, or to Costco to get Kirkland Signature mini peanut butter cups, and take-and-bake pizza.
When you go to the store, your favorite treats don’t exist on the shelves. You are shocked to discover that they won’t be returning.
They have been discontinued.
It’s one of the worst experiences as a grocery shop shopper. Customers often ask their stores why a loved product is gone. Fans have social media accounts that track discontinued products at Trader Joe’s. Others blog about long-lost items in Costco.
“We understand that it may be disappointing, devastating even,” Trader Joe’s states on its “discontinued products feedback” contact page.
There are many reasons Costco (COST), Trader Joe’s, and other stores stop selling customers’ favorite products.
Sometimes products are seasonal or the manufacturer planned to produce them for a specific time. For stores like Costco or Trader Joe’s discontinuing products can increase the treasure hunt-like appeal.
Other strategies may be used more often.
One thing is certain: it’s hard to find shelf space at Costco or Trader Joe’s. These companies only sell the most in-demand products.
This strategy is quite different from supermarkets and the likes of Walmart (WMT), which offers a variety of brands and foods. Costco sells approximately 4,000 products at once, for instance. Traditional supermarkets usually sell around 40,000.
The ability of both companies to maintain prices lower than their competitors depends on the production of high volumes of top-selling merchandise each minute.
Companies should switch to another product if an item isn’t selling quickly enough at Trader Joe’s and is collecting dust at Costco warehouses.
Matt Sloan, Trader Joe’s vice-president of marketing, stated that if you don’t have a high volume or growing volume of sales, it makes no business sense to produce and handle a slow-selling product.
Sometimes, it is the product itself. Companies will stop buying items from suppliers if they raise the price or drop the quality.
Chuck Howard, a Texas A&M assistant professor of marketing at the Mays Business School, stated that Costco would prefer not to sell an item than to sell it at too high a price. It would be offensive for them to sell items that are too costly.
Marcus Walker, Costco’s assistant buyer of frozen foods from 2005 to 2020, stated that Costco replaced a Perdue 10-pound boneless, skinless frozen chicken breast for $27 with one from Wayne Farms for $21.99.
You can also get items at a lower price in other shops.
Costco wants to offer the best prices on its products. Walker stated that Hot Pockets was pulled because Costco couldn’t match Sam’s Club’s prices for the product.
Costco’s teams test the quality of suppliers’ products in other stores before purchasing them. Walker stated that Costco’s teams will ask suppliers to improve the product for them if they feel it tastes better elsewhere. If it doesn’t, Costco will replace it.
The stability of product supply is another issue that was highlighted by the pandemic. A manufacturer that can’t produce enough items will cease selling them and replace them with an item they can keep on the shelves.
With demand for food and groceries skyrocketing from the pandemic, many
manufacturers stopped making secondary products to produce only high-demand items. Even though demand has eased and factories are now running at a higher level of efficiency, manufacturers don’t produce as many items as before the pandemic.
Hormel Foods (HRL), which makes Skippy and Spam, and Mondelez(MDLZ), which owns brands such as Oreo, have recently stated that they will be focusing on the top-performing products and reducing their product range.
Angela Ackerman is the Instagram account @Costcoguide and has more than 230,000 followers. She said that Costco customers often ask her why they don’t have Costco’s dried dark cocoa mangoes.
She said, “They fall in love and want to see it again.”
Ackerman knows that scarcity can drive sales. She buys more if she sees at Costco that a prized item is no longer being sold.