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Fri August 30, 2013
Bag It, Trader Joe's Tells 'Pirate' Grocer In Canada
Originally published on Fri August 30, 2013 1:24 pm
For the past year and a half, Mike Hallatt has been driving across the U.S.-Canada border and back, bringing loads of groceries back to Vancouver. There's no food shortage in Canada — but there's an absolute lack of Trader Joe's grocery stores, and that created an opening for an entrepreneur who doesn't mind making a long drive.
Originally called Pirate Joe's, Hallatt's store serves a niche market: Canadians who wish Trader Joe's was in their country and who will pay a bit extra for triple ginger snaps and fanciful trail mixes.
Trader Joe's is not pleased. It filed a lawsuit this summer, complaining that Pirate Joe's harms the grocer's brand by selling its products outside its control and confusing customers. In response, Hallatt changed the store's name to _irate Joe's.
"I bought the stuff at full retail. I own it," Hallatt says. "I get to do with it whatever I want to, including reselling it to Canadians. My right to do this is unassailable."
And, he says, "There is no confusion in the marketplace. Pirate Joe's, now _irate Joe's, is blatant and unambiguous."
But Hallatt adds that he doesn't see the big chain, which is owned by the same German family that owns the Aldi supermarkets, as an enemy. And he says the company is damaging its own brand by pursuing him in court. Hallatt has spoken to numerous news outlets about the case, including NPR member stations in Southern California and New Hampshire.
"I would prefer Trader Joe's accept my long-standing offer to follow guidance on how they would like me to operate," Hallatt says in an email.
As for reselling Trader Joe's products, he says he's far from alone.
"I discovered there are many people running resale businesses on eBay and Amazon," Hallatt says. "The amount online resellers manage to mark up the prices is the stuff of legend among TJ's employees."
More intriguingly, he adds, "There are three grocery stores reselling Trader Joe's products in the U.S. that I know of."
The Vancouver store's motto carved into its threshold reads, "Better than nothing" — with a trademark symbol identifying it as a protected slogan. It seems that the Canadians who crave Trader Joe's treats would agree.
As Hallatt says, "Business is brisk!"
The unique business model led us to get in touch with Hallatt. Below is a lightly edited version of his answers to our questions. Trader Joe's has not been speaking publicly about the active lawsuit.
NPR: Will there be a hearing on Trader Joe's lawsuit soon?
Hallatt: "We filed a motion to dismiss a few weeks ago, they responded [last] Monday and we [responded] to that. The court will take a look at it soon I hope. Parallel to that we are in the early stages of discovery ahead of a jury trial to resolve their complaint — if it comes to that."
I assume people get really attached to some products. What are your biggest sellers?
"We have people come in and say things like, "My babies," as they pull items off the shelf. I'm amazed how many specific and emphatic requests we have received in the past year and a half. There are at least a few people attached to every product we carry, and if I don't have it sitting on the shelf I hear about it.
"I'm reluctant to open on a day we are out of stock on Ridge Cut Salt & Pepper Potato Chips, for example.
"Once a week we get a call from a guy who asks only, 'Is it safe?' This is code for Low Calorie Lemonade. There are maybe 25 people in Vancouver who know about that stuff. It's fantastic."
Have you been told to leave Trader Joe's stores?
"Not formally from corporate. When the first squeeze came around the time of the cease and desist letter last year, it was the manager of the Bellingham [Wash.] store who apologetically asked me not to shop there anymore.
"I'm still OK if I'm shopping for myself or my family, although my cart gets looked over.
"I tell people who are 'helping' me shop not to clear out shelves but to shop like a typical shopper in there, stocking up. Get one or two of a set of items, bag them yourself and get out of there."
Do you have to portion supplies out to several vehicles?
"For too long it was just my Honda Element. The record was 98 bags of groceries. A few were on my lap. I've since up/downgraded to a '93 E-250 extended van. [It has a] straight six, so I need earplugs over 50 mph. Ninety-eight bags barely dents capacity.
"We call our product acquisition program 'Plan C' and we have a sign in the store that reads, 'Don't ask because we can't tell you.' "
What are the export laws for bringing groceries over the border?
"Pretty much anything I can buy in the U.S., I can legally import into Canada. There are permits required for meat, seafood and dairy. We stick to vegetarian packaged nonperishable items.
"Packaging compliance is also required and we are working closely with the Canadian Food Inspection Agency to ensure we are fully compliant."
Do you have any plans to expand?
"_irate Joe's is a unique response to the market Trader Joe's created in Vancouver when it opened a store just over the border in Bellingham. I feel they should either open a store up here or leave the free market to sort itself out. Requiring a 160-mile round trip across an international border to get their products is anything but neighborly."