H-E-B, Amazon top Dunnhumby's latest preference index
For the third time, a Texas regional grocery powerhouse has ranked as the top U.S. grocery retailer.
H-E-B took the top spot in the seventh annual Dunnhumby Retailer Preference Index (RPI), a nationwide study of the approximately $1 trillion U.S. grocery market. The San Antonio-based chain, which operates 430 stores in Texas and Mexico, is the first grocery retailer to be recognized three times as number one in the RPI ranking
Amazon, which has been in the top three every year of the RPI and has ranked first twice, came in second, followed by Costco. The seven other retailers in the top 10 are: Market Basket (4), Sam’s Club (5), Wegman’s (6), Aldi (7), ShopRite (8), Walmart Neighborhood Market Walmart (9) and Walmart (10).
The annual RPI examines survey responses from 10,000 American grocery shoppers. The five drivers of the customer value proposition are in order: Price, promotions and rewards, quality, digital, operations, and speed and convenience.
According to Dunnhumby, H-E-B topped the RPI ranking because the retailer has the strongest customer value proposition for the long-term. This is due to their “superior ability to deliver a combination of better savings and better experience/assortment, supported by time savings through superior digital capabilities," the report stated.
Other findings from the survey are below.
•Dunnhumby forecasts that the U.S. grocery market sales growth will be o.5% to 1.5% in 2024, which is one of only three times in the last 30 years with growth below 1% and the slowest growth since the Great Recession of 2009.
"The slowdown is due to the economic headwinds still facing consumers: slowing disposable income growth, lower savings rate, higher debt, cost to service consumer debt and the drying up of pandemic related savings buffers," the company stated in the study.
•For the first time in the history of Dunnhumby’s RPI, two Kroger banners (Kroger and Fry’s) made it to the top quartile by how they drove in overall price perception in 2023, a year when saving customers money was critical.
Two other Kroger banners (Fred Meyer and King Soopers) were also among the biggest climbers in this year’s RPI ranking. These latter two made it in the second quartile, just outside of the first quartile.
•Market Basket, Winco, and Aldi are the top three in the RPI’s “Price, Promotions, Rewards” pillar due to the strongest combination of “mass and personalized pricing levers.”
•Wegman’s. Trader Joes, and The Fresh Market ranked as the top three in the “Quality” pillar. Wegman’s has held the top position in the “Quality” pillar every year of the RPI.
“Knowing your customer and your competitive positioning regarding customer needs will be critical for retailers to scratch out any organic growth in 2024," said Matt O’Grady, dunnhumby's president of the Americas. "Customers are re-evaluating their opinions of retailers more than ever and that will only intensify in the coming months due to the economic headwinds facing consumers."
The dunnhumby RPI ranking combines financial results with customer perception. It includes the largest 65 retailers in the industry that sell everyday food and non-food household items. The financial data used in the dunnhumby model comes from Edge Ascential, and the customer perception data is sourced from dunnhumby’s annual survey of more than 10,000 American grocery shoppers.