- Trader Joe’s, Costco, Amazon, H-E-B, Walmart and Wegmans rank as the nation's top grocers, according to a new report by customer data science company, Dunnhumby, The Shelby Company says.
Unlike most reports that focus on either customer preference or financial performance, the Dunnhumby report takes both aspects in account in ranking 59 grocers, surveying 11,000 customers and analyzing the $700 billion grocery market.
- Top retailers shared several common focuses: price, quality, value and a focus on price that is supported by digital execution. In addition, most of the highly rated companies are newer entrants to the grocery market, the report said.
A popular business quote that says you can have a product or service that is fast, good or cheap — pick two. That seems particularly notable when looking at the Dunnhumby Retail Preferences Index (RPI).
In the inaugural report, the customer data science company looked at what customers said they wanted, and combined it with where customers actually spent their money (determined by the company's financial performance) to come up with an overall view of what companies are customer favorites.
The top 10 winners are familiar ones: Trader Joe's, Costco, Amazon, H-E-B, Walmart, Wegmans, Aldi's, Sam's Club, Sprouts Farmers Market and Whole Foods Market. But they didn't all get on the list for the same reasons. The report assess the two most important perceived drivers — price and quality.
Based on that, grocers were segmented into four quadrants: struggling mainstream, price focused, premium and balanced value. Trader Joe’s, Costco, H-E-B, Sam’s Club and Sprouts fall in the balanced value category. Whole Foods and Wegman’s are premium, while Walmart, Amazon and Aldi are price focused. None of the stores in the fourth quadrant, the struggling mainstream, made it into the top 10 of the report.
Some grocers scored high enough in area to compensate for a weakness in another. Whole Foods, for example, scored so high on quality, if not on price, that the quality score lifted the grocer to the 10th spot. Amazon scored high for its price focus, but not as much as a premium grocer. Still, the price focus was significant enough to place the retailer third on the list. Now, with Whole Foods and Amazon joining forces, with an eye on premium and value, they may see an entry into the upper quadrant of balanced value. They may already be moving in that direction: AmazonFresh enjoyed a 45% increase in grocery sales in the 4th quarter of 2017, compared to the 3rd quarter.
The report provides a good self-assessment tool for grocers, and demonstrates that having a specialty is key. For companies like No. 5 Walmart — known for low prices and low customer service ratings — the lesson is, excel in delivering price or quality, and build from there.