Why Costco and Trader Joe’s Sometimes Stop Selling Your Favorite Foods
Costco’s strategy of discontinuing products can be a frustration for customers. (Gabe Ginsberg/SOPA Images/LightRocket/Getty Images)
Estimated reading time: 4-5 minutes
ATLANTA — Chances are you’ve been there: You go to Trader Joe’s for caramel popcorn, churro bites and fried gorgonzola cookies, or to Costco for its Kirkland Signature mini peanut butter cups and take-and-bake pizza.
But when you get to the store, your favorite treats aren̵[ads1]7;t on the shelf. And to your horror, you learn that they are not coming back.
They are discontinued.
It is one of the most disappointing experiences as a grocer. Why a beloved product has disappeared ranks as one of the most common questions customers ask stores. Fans run social media accounts dedicated to tracking discontinued products at Trader Joe’s, and other blogs about items lost at Costco.
Strategies at play
“We understand it can be disappointing — devastating, even,” Trader Joe’s says on its “discontinued product recall” customer contact page.
There are several reasons why Trader Joe’s, Costco and other stores suddenly stop selling customer favorites.
Sometimes the products are seasonal, or a manufacturer has always planned to make them for a limited time. Also, for stores like Costco and Trader Joe’s, liquidating items can enhance the treasure hunt-like appeal of those stores.
But more often other strategies come into play.
One important factor: It’s hard to get shelf space inside Trader Joe’s and Costco and stay there. These companies sell a limited number of products – only those products that are in greatest demand from customers.
It is quite a different strategy from supermarkets, as well as Walmart and Amazon, which offer a wide variety of food products and brands. Costco, for example, sells about 4,000 different products at any given time. Traditional supermarkets usually sell 40,000.
Supplier issues
Both companies’ ability to keep prices below most of their competitors depends on trading high volumes of top-selling items every minute, every day.
If an item isn’t selling fast enough on the shelf at Trader Joe’s or gathering dust at Costco warehouses, companies have to switch to something else that customers will snap up.
“If you don’t have high volume or growing volume, the cost of producing and handling a slow-selling product is such that it doesn’t make business sense,” Trader Joe’s vice president of marketing Matt Sloan said in a company podcast earlier this year.
If I know it’s going to be gone, I stock up.
-Angela Ackerman
Other times it is the product itself: Companies will withdraw goods if the suppliers raise the price too much or the quality declines.
“Costco would rather not sell an item than sell it at a price that’s too high,” said Chuck Howard, assistant professor of marketing at Texas A&M’s Mays Business School. “It would be off-brand for them to sell things that consumers think would be too expensive.”
About five years ago, for example, Costco replaced a $27 product, a 10-pound Perdue boneless frozen chicken breast with a $21.99 Wayne Farms version, said Marcus Walker, an assistant frozen food buyer at Costco from 2005 to 2020.
Price matching
Items that are cheaper in other stores are also important to eliminate.
Costco wants their products to be the cheapest option. It pulled Hot Pockets because it wasn’t able to match Sam’s Club prices on its product, Walker said.
Costco’s team buys its suppliers’ products in competitors’ stores and tests them to compare the quality with Costco’s. If they find an item tastes better elsewhere, they’ll ask the supplier to improve it for Costco, Walker said — and if that doesn’t happen, Costco will look to replace it.
Another problem, which the pandemic highlighted, is the stability of product supply. If a manufacturer can’t produce enough of an item, companies will stop selling it and replace it with something they can consistently stock.
In 2020 and 2021, with demand skyrocketing from customers stocking up on groceries during the pandemic, manufacturers halted production of many secondary products to make only the most in-demand items. And even though demand eased this year and factories returned to operating at more normal capacity, manufacturers still aren’t making as wide a variety of goods as they did before the pandemic.
Hormel Foods, the maker of Skippy and Spam, and Mondelez, which owns brands like Oreo, are among the companies that have recently said they are reducing the number of products they sell to focus on the most effective.
Angela Ackerman, who runs the @Costcoguide Instagram account with more than 230,000 followers, said Costco fans often ask her why they can’t find Costco’s dried dark chocolate mango in particular.
“They fall in love with something and want to see it again,” she said.
Scarcity can lead to sales, as Ackerman knows. When she sees a notice at Costco that they will no longer sell a valuable item, she buys more before it runs out. “If I know it’s going to be gone, I stock up.”
