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The Anchor Recap: September 2023

Ezra Carmel
October 10, 2023
The Anchor Recap: September 2023

This blog explores some of the past month’s insights from’s executive intelligence report – The Anchor – published weekly by the Analytical Research team. To view full articles from The Anchor or sign up to receive the report before it goes online, visit

Trader Joes: The Secret to Success in 2023

Trader Joe’s has emerged as one of the more disruptive value grocers in 2023 as consumers’ emphasis on bang-for-buck has been one of the major themes of the category this year. Trader Joe’s continued to find success in August as monthly year-over-year (YoY) visits once again outperformed conventional and value-oriented grocery chains.

Trader Joe’s high private label mix (roughly 80%) has allowed the company to keep pricing more competitive than conventional grocers and has certainly played a part in the company’s ability to drive traffic. Word about the brand’s constant innovation in private-label offerings continues to spread, as there are several websites devoted to highlighting Trader Joe’s new products every season.

Ultimately, Trader Joe’s ability to outpace the rest of the grocery category in 2023 comes down to driving traffic from lower-income consumers. Almost all grocery chains have seen a decrease in their trade areas’ median household incomes compared to pre-pandemic levels – likely due to lower-income shoppers visiting a wider variety of stores as they seek out value. However, Trader Joe’s has been an outlier given the 8% decrease in household income from Q1 2019 to Q2 2023.

New visitor acquisition isn’t the only factor driving Trader Joe’s success in 2023. In 2021 and 2022, Trader Joe’s visit frequency declined as the chain started to attract lower-income consumers who were likely to shop around for the best deals. However, visit frequency began to inflect in 2023, suggesting that customers are becoming more loyal as Trader Joe’s proves that it consistently delivers on value. This should serve the chain well as it continues to expand into new markets.

Hispanic Grocery: Customizing the Merchandise Assortment to the Neighborhood

Alongside Hispanic grocery chains that feature specialty departments like tortilleria or cremeria, many conventional grocers are also catering to an increasingly diverse American population. In Houston, TX, Kroger recently revamped a store to suit the area’s majority Hispanic population. With many of the features of a traditional Kroger – like a Starbucks or pharmacy – it also has Spanish-English signage and more Hispanic products and conveniences like ceviche, 17 varieties of fresh-cut queso, and house-made tortillas. Not too far from this recent Kroger revamp is an existing H-E-B-owned Hispanic concept store called Mi Tienda and a La Michoacana location – the largest Hispanic grocery chain in Texas.

Trade Area Analysis of these three locations between September 2022 and August 2023 revealed that the potential market of the Kroger store had a relatively large share of Hispanic residents (57.2%) but a smaller share than the La Michoacana (61.4%) and Mi Tienda (79.6%) locations. It’s likely that part of the strategy behind the Kroger remodel is an attempt to capture some of this Hispanic audience.

Both the Mi Tienda and La Michoacana locations have experienced YoY visit growth most months over the past year, while the Kroger location has seen mild visit gaps. However, YoY visits in August 2023 were up 2.3% for the Kroger store. With the new strategy and offerings that launched in September 2023, the remodeled Kroger could see visits continue to climb.

Five Below: Rising Above

Five Below’s Q2 2023 reporting revealed another set of strong top-line figures fueled by lots of "Wow!" treasure hunt for its customers. The retailer experienced an acceleration in foot traffic – mostly fueled by 12% venue growth YoY – as well as improved comparable transactions (+4.5%) and inventory turns (to 3.7x) which produced solid levels of profitability and cash generation for the company. 

But shareholders and analysts were in for their own "Wow!" moment when management lowered earnings expectations for the rest of the year to account for a greater level of shrink-theft. Despite this challenge, CEO Joel Anderson reported that Five Below kicked off H2 2023 with a strong back to school season and capitalized on Taylor Swift, Super Mario Bros. and Barbie trends.

Flea Markets: The 2023 Bonanza

One of the prevailing themes in 2023 has been that thrift is in style when food inflation is hot. This trend extends beyond off-price and secondhand fashion to include foot traffic to the flea market space. 

According to the National Flea Market Association in 2019, the country's over 1,100 flea markets conduct over $30B in sales annually. If it’s assumed, conservatively, that the industry grew by one-third since then, some $10B in consumer spending has transitioned from conventional retail to the secondary market. A market of that size, growing at a double-digit rate, has the potential to capture a lot of demand from conventional goods.

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