Once again, San Antonio-based grocer H-E-B has secured the prestigious top position in dunnhumby’s seventh annual Retailer Preference Index (RPI). This is the third time HEB has been recognized as the number one food retailer in the company’s rankings. It is the first company to earn the distinction three times. Amazon claimed the second spot this year, with Costco Wholesale completing the top three. The remaining retailers in the top 10 include Market Basket, Sam’s Club, Wegmans Food Markets, ALDI, ShopRite, Walmart Neighborhood Market, and Walmart.
The dunnhumby RPI is a comprehensive nationwide study that assesses the approximately $1 trillion U.S. grocery market. It ranks the largest 65 retailers in the industry based on financial results sourced from Edge Ascential and customer perception data derived from dunnhumby’s annual survey of over 10,000 American grocery shoppers. According to dunnhumby, there are five drivers of the customer value proposition including: price/promotions/rewards, quality, digital, operations and speed/convenience.
“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.” According to the report, H-E-B secured the top position in the RPI ranking owing to its robust customer value proposition designed for long-term success. The key factors contributing to this achievement include their exceptional capability to provide a blend of enhanced savings and a superior experience/assortment. This is further reinforced by their adept use of digital capabilities, resulting in time savings for customers.
Dunnhumby predicts U.S. grocery market sales growth will be the slowest growth rate since the recession of 2009 at only 0.5% to 1.5% in 2024. The deceleration can be attributed to persistent economic challenges confronting consumers, including a slowdown in disposable income growth, a reduced savings rate, increased debt, higher costs associated with servicing consumer debt, and the depletion of savings buffers accumulated during the pandemic. Customers are more focused on retailer value propositions than ever before, leading to a highly competitive grocery market. The most potent catalyst for enduring retailer success continues to be savings achieved through low base prices and highly tailored promotions and rewards, closely followed maintaining high-quality assortment. The report also found that retailers in the top quartile had a stronger emotional connection with customers (59%) than retailers in the fourth quartile (41%).
O’Grady said the Retailer Preference Index report delves into the customer’s perception of the grocery market and how retailers are meeting their needs, as well as each grocer’s ability to cater to different consumer segments. The report highlighted that in the “Price, Promotions and Rewards” category of the index, Market Basket, Winco, and Aldi claimed the top three positions, respectively. This achievement was attributed to their effective combination of mass and personalized pricing strategies. Wegman’s retained its leading position in the “Quality” category, a position it has maintained every year since the index’s inception. Notably, Kroger and Fry’s, both part of the Kroger banners, entered the top quartile for the first time in the history of the index, as reported by dunnhumby. This success was driven by improvements in overall price perception in 2023, a category that held increased significance as customers sought ways to save money amid inflation. Additionally, Kroger banners Fred Meyer and King Soopers advanced in the ranking, reaching the top of the second quartile.