Chicago-based data science company dunnhumby this month released its fourth annual Retailer Preference Index (RPI), a study that examines the approximately $1 trillion U.S. grocery market based on survey of 10,000 U.S. households combined with retailers’ financial performance.
After a year dominated by COVID-19, Amazon eclipsed previous winner H-E-B and runner-up Trader Joe’s to take the top spot.
For the first time, Target, due to strong COVID-driven momentum, broke into the top quartile of the RPI. Target is the only newcomer to the first quartile overall, jumping six spots to move out of the second quartile, a spot they occupied the previous three years.
The top 10 grocery retailers with the highest overall customer preference index scores are Amazon, H-E-B, Trader Joe’s, Wegman’s, Aldi, Market Basket, Sam’s Club, Costco, Publix and Target. They were followed by Fresh Thyme, ShopRite, Sprouts Farmers Market and Walmart.
“COVID has led to record highs and lows in economic metrics, along with huge shifts in where and how consumers shop food retail, changing the competitive trajectories of retailers who were winning and those who were struggling before the pandemic. As a result, we viewed 2020 through a different lens than we’ve viewed the grocery industry in previous years,” said Grant Steadman, President of North America for dunnhumby. “Amazon accelerated past every other retailer on our COVID Momentum Metric and customer safety ratings, due to its speed to shop and virtual store format. As we begin to emerge from the pandemic, we should expect value perception to come back strongly. Beyond COVID, retailers with Customer First strategies will best adapt to changing behaviors and deliver what matters most to their customers.”
The overall RPI ranking evaluates retailer performance on seven drivers of customer preference: Price, Quality, Digital, Operations, Convenience, Discounts, Rewards & Information and Speed. The retailers who focus their business on superior value perception or “Value Core” – defined by the strongest combination of Price and Quality – tend to have the most financial success and the strongest emotional bond with customers. This year, dunnhumby also included the COVID Momentum Metric to the calculation. This metric results from a statistical model that predicts how retailer execution on the same preference drivers’ impact short-term financial success, namely market share gains or losses during 2020.