Colorado grocers have little to fear from the arrival of Trader Joe's, analysts say, despite the retailer's cultlike following among some consumers.
Fans undoubtedly will be lined up for the Friday opening of Colorado's first three Trader Joe's — in Denver, Boulder and Greenwood Village. Yet the popular specialty grocer typically fails to disrupt the competitive mix in its new markets.
"Trader Joe's doesn't carry nearly as wide an offering as a supermarket does, so grocers may notice the (competitive) effect is skewed toward particular categories — for example, cheese or packaged deli," said Jon Springer, an editor with Supermarket News.
The California-based retailer is known for stocking its own private-label products, some of which sell at a discount to brand-name goods at other grocers.
Customers are unlikely to alter their regular grocery-shopping patterns after the opening of Trader Joe's, said Cliff Young, a marketing professor and associate dean at the University of Colorado Denver business school.
"The target markets are entirely different," Young said. "I will continue to go to my neighborhood King Soopers for my everyday grocery needs. But Trader Joe's has this mystique of exclusivity. It's sort of unique and Whole Food-ish."
Colorado's largest grocery chain is King Soopers/City Market, with a market share of 33.4 percent, followed by Walmart at 23.9 percent and Safeway with 19.5 percent, according to industry tracker Shelby Report.
Analysts say that if Trader Joe's has any competitive impact, it is likely to be on smaller grocers such as Whole Foods, with a Colorado market share of 2.8 percent, and Sprouts, with a 1.3 percent share.
Even in markets with a long history of Trader Joe's, share numbers typically are low. The grocer has been in Arizona since 1993 and operates 14 stores in the state, yet its share of the Arizona market is 2 percent, according to Shelby Report.
"They only open a handful of stores in any given metro area. Therefore, they never really gain more than about 5 percent of market share in any given area," said David Livingston of Wisconsin-based DJL Research.
Representatives of Trader Joe's, King Soopers, Safeway, Sprouts and Whole Foods offered little or no comment for this article, saying they do not discuss competition with other grocers.
Friday's openings of Trader Joe's are at 750 Colorado Blvd., Denver; 5910 S. University Blvd., Greenwood Village; and 1906 28th St., Boulder. Two more stores are under development, in Fort Collins and across from Governor's Park in central Denver.
Steve Raabe: 303-954-1948, email@example.com or twitter.com/steveraabedp