A Texas powerhouse has topped an online giant as the top grocery retailer in the United States.
H-E-B regained its leadership position from Amazon in the sixth annual Dunnhumby Retailer Preference Index (RPI), a nationwide study of the approximately $1 trillion U.S. grocery market. Costco Wholesale came in second, while Amazon fell to third. Wegmans Food Markets took the fourth spot for the third year in a row, followed by Sam’s Club. (See complete list of top 15 grocers at end of article.)
While H-E-B ranked first overall, Amazon is still superior in online shopping even as online retailers are closing the gap.The top six retailers for digital are Amazon, Amazon Fresh, Target, Sam’s Club, Walmart and Walmart Neighborhood Market.
The dunnhumby RPI ranking grocers combines financial results with customer perception. It includes the largest 63 retailers in the industry that sell everyday food and non-food household items. The financial data used in the model comes from Edge Ascential. The customer perception data is based on dunnhumby’s analysis of 30,000 consumers surveyed between October 2021 and November 2022.
Key findings from the study are below:
- Fierce battle at the top between U.S. grocers. In 2020 and 2021, the pandemic helped propel and 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 its superior ability to deliver a combination of better savings and better-quality experience/assortment.
- Price is top consumer need across all income brackets, including 66% of people making $50,000 to $74,999 and 53% making more than $200,000.
- Digital has staying power. The pandemic increased the percentage of Americans shopping online for groceries from 39% to 50% 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.
- 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.
- 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. By contrast, no club store ranked higher than seventh in dunnhumby’s 2019 RPI.
- BJ’s Wholesale was the biggest mover in the RPI during the last three years, climbing from 27th place to 10th place in 2022. Schnucks climbed 16 spots and currently sits in second 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).
The 15 retailers with the highest overall customer preference index scores in the dunnhumby RPI are:
5. Sam’s Club;
6. Market Basket;
7. Amazon Fresh;
8. Trader Joes;
10. BJ’s Wholesale;
14. Walmart Neighborhood Market; and
“In 2017 we set out on a journey to understand how customers’ preferences and retailers’ financial results predicted which retailers would last,” said Matt O’Grady, dunnhumby's president of the America’s. “But little did we know that in the ensuing six years consumers and retailers would have a lifetime of difficulties including a pandemic that shook consumer behavior and the global economy, a prolonged period of supply change struggles, and a once-in-a-generation inflation crisis," "We believe this report can serve as a blueprint to help grocers improve their competitive positions, while providing key findings for marketing and consumer preferences.”