The sixth annual dunnhumby Retailer Preference Index (RPI) is out, concluding that "three years after the pandemic upturned the grocery industry, H-E-B has regained its leadership position from Amazon with Costco following closely behind in second place. Amazon fell to third while Wegmans took the fourth spot for the third year in a row.
"The 11 additional retailers with the highest overall customer preference index scores are: 5) Sam’s Club, 6) Market Basket, 7) Amazon Fresh, 8) Trader Joes, 9) Winco, 10) BJ’s Wholesale, 11) Target, 12) Aldi, 13) Shoprite, 14) Walmart Neighborhood Market and 15) Walmart."
Some key findings from the study:
• "In 2020 and 2021, the pandemic helped propel and then solidify Amazon as the top grocery retailer over H-E-B, Trader Joe’s and Wegmans, since Amazon’s value proposition excels at both saving customers time and providing a seamless eCommerce experience. But in 2022, H-E-B reclaimed the top spot due to their superior ability to deliver a combination of better savings and better-quality experience/assortment."
• "Digital has staying power but is no longer as key to driving short term retailer momentum as it was from 2020-2021. The pandemic increased the percentage of Americans shopping online for groceries from 39% to 50% of the country — an 11-point rise — and, despite record inflation, over half of those people remained online grocery shoppers in 2022. As a result, there are 9.4 million more omnichannel households today than there were in 2019 with a combined grocery budget of $4.9 billion."
• "Amazon is still superior in online shopping, but all other online retailers are closing the gap. In fact, 52% of customers of first quartile retailers reported they have an easy online shopping experience, an increase of 13% from 2019. The top six retailers for digital are 1) Amazon, 2) Amazon Fresh, 3) Target, 4) Sam’s Club, 5) Walmart, and 6) Walmart Neighborhood Market."
• "Retailers in the top quartile outperform the rest of the market in delivering superior customer benefits, savings, or both. Top quartile retailers have an average compounded average growth rate (CAGR) of 7.3% compared to third quartile retailers with a 3.2% CAGR. In addition, 59% of customers of first quartile retailers have a strong emotional connection with retailers compared to 45% of customers of third quartile retailers.
Amazon is still superior in online shopping, but all other online retailers are closing the gap. In fact, 52% of customers of first quartile retailers reported they have an easy online shopping experience, an increase of 13% from 2019. The top six retailers for digital are 1) Amazon, 2) Amazon Fresh, 3) Target, 4) Sam’s Club, 5) Walmart, and 6) Walmart Neighborhood Market."
• "Club stores are gaining momentum with three of the top 10 spots in the first quartile now occupied by club stores. Costco (2), Sam’s Club (5), and BJ’s Wholesale (10) achieved a high rank through a combination of top-notch dependability and saving customers money while delivering a seamless experience. In dunnhumby’s 2019 RPI, no club store ranked higher than seventh."
• "BJ’s Wholesale was the biggest mover in the RPI over the last three years, climbing from 27th place to 10th place in 2022, a 17 -point jump in rankings. Schnucks climbed 16 spots and currently sits in the 2nd Quartile overall. Other big ranking movers not in the first Quartile overall but improving were: Food Lion (14 spots up), Food4Less/FoodsCo (12 spots up), Weis (10 spots up) and Food City (9 spots up). These five retailers have two things most in common: they displayed superior ability to navigate supply chain issues by improving their ranking in the Operations pillar, which measures out-of-stock perceptions among other things, and they have existing strengths or made significant gains in their competitive position on saving customers money."
- KC's View:
In some ways, there is no surprise here, except maybe that Amazon Fresh stores are ranked as number seven.
I always think these rankings are instructive not so much because of the numerical rankings, but because they teach us that great and relevant food retailing can take many forms. WinCo is a very different experience than H-E-B and Wegmans, but that doesn't make it any less excellent within the lane that it travels.
All of these stores that are highly ranked stand for something specific in terms of how customers perceive them. That's critically important.