In your area, is Trader Joe's considered an equal to regular grocery stores ? In Ohio, they basically have (1) store for each larger city (7 stores total). Cleveland and Columbus, the two biggest cities, have (2) locations each, Cincinnati, Dayton and Toledo have (1) each. Most people - the ones that don't shop there - tend to think they only sell organic stuff, non-GMO products, cater to vegetarians, and so on, i.e. somewhat of a specialty grocery store. While they do have a lot of that stuff and they do cater to hippie or yuppie type crowds, once people go there, they see that they sell regular stuff, albeit in limited choices. There are many items we like from there but we have to make a trip to go there because of it's location.
In my area TJ basically is the equivalent of "we only sell what we can sell for a good value" store. Real estate size of the store is usually way smaller than Safeway (1/4 to 1/3), sell mostly stuff that people need all the time, good price, most things not organic, priced slightly to much cheaper than Safeway when not on sale (10-20% less). I have a feeling they sell mainly items of high volume, fun, convenient (a lot of freezer items), but you are expected to still go to Safeway for what they don't sell.
To compete on price you probably will be going to Walmart Neighborhood Store, priced probably near or lower than TJ but the quality is .... not always good, catering to lower end price sensitive vs quality sensitive crowd, often out of the way and in the case of Walmart, you are not getting a good deal after you spend all the time going there to get 5% cheaper on some items (and more expensive than Safeway when not on sale).
Whole Foods would be the Hippies / Organic crowd store here, and Costco would be the "we are middle class and we want to fit in and shop like middle class" store. TJ is probably, from my understanding, similar to Aldi's in East Coast.
Example on prices:
Eggs: TJ is 2.29 / dozen Safeway often 3.29 unless on sale for 1.29
Organic milk: TJ is usually 5.50 and Safeway often 6.50 unless on sale for 4.99
Onion: TJ is usually 69c and Safeway often 1.29
Salad lettuce: TJ is probably 2.29 for 12oz and Safeway 5.00 for 16oz
Roma tomatoes: 29c in TJ but probably 99c or so in Safeway
Carrots, Garlic, Shallot, etc: similar story
Chicken drumsticks: 1.79/lb in TJ is better quality than 1.49 to 1.99/lb in Safeway brand (non Foster Farm)
Peanut butter (non hydrogenated): good quality for like 2.99 or something vs Skippy for 3.49 or something
Better quality so I buy in TJ: pie crust, frozen fried rice, ice cream treats, frozen mac & cheese, frozen clam sauce pasta, frozen mushroom ravioli, Pasadena chicken salad, vegetable wash, pesto sauce in small jar, peaches and nectarine when in season, eggs (they can hard boil without problem, Safeway's egg turn watery for some reason, likely mishandled or stuff, I only hard boil TJ's egg)
Worse quality so I never buy in TJ: oranges, bread (they mold too fast somehow), cereals, frozen shrimp and fish (Safeway nailed it better, unless you are buying from Costco or Whole Foods), strawberry / blueberry unless during peak season.