Trader Joes Mexican grocery store, one of the largest in the country, said Monday that it plans to sell off most of its stores by the end of the year.
The chain’s Mexican operations have been the subject of much scrutiny over the past several years, with lawsuits filed against it by consumers, state attorneys general, and a federal judge.
Last year, the chain agreed to a $20 million settlement with the Justice Department over allegations of Mexican food safety violations.
TJ Foods, the parent company of Trader Joe.
In its earnings report issued Monday, TJ Foods said it expects to close its Mexican stores by year-end, citing lower than expected sales and declining customer demand.
The company said it plans a number of initiatives in the months ahead to improve its operations, including an initiative to invest in more advanced food processing facilities and better inventory management.
“We believe that these changes are a good investment in our business and a way to further enhance our ability to serve our growing customers and provide them with quality products and services,” TJ Foods President and CEO Jim Buss said in the earnings release.
“We continue to make great strides towards achieving this goal and look forward to continuing to grow our customer base.”
TJ Foods is one of several major food retailers to announce that it will be selling off its Mexican operations.
Trader Joe is not the only major U.S. chain facing challenges in Mexico.
On Monday, the Mexican government announced it had issued a crackdown on illegal drugs in the northern state of Michoacan, where the U.N. estimated more than 100,000 people had died since 2000.
The state of Jalisco is home to some of the world’s most violent drug cartels, and the cartels have been blamed for the deaths of thousands of people since they were founded in the 1980s.
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