Dunnhumby's Retailer Preference Index highlights role of private brands in swaying consumers
Customer data science company dunnhumby has released its third annual Retailer Preference Index. The nationwide study examines the U.S. grocery market, by picking consumers’ brains about the elements that make a grocer standout and ranking companies based on the results.
This year, San Antonio-based H-E-B leaped from fourth place to first, stealing the top spot from Trader Joe’s, largely based on its appeals to relevance and convenience. In third place was Amazon, followed by Albertsons Cos.’ Market Basket Banner, Wegmans and Costco. Rounding out the top 10 were ALDI, Sam’s Club, Walmart and Publix. The first quartile of the Index, which totaled 14 grocers, also included Winco Foods, Fresh Thyme, Sprouts Farmers Market and ShopRite.
Dunnhumby said that one of H-E-B’s strengths in comparison with its competitors has been its focus on assortment relevance and private brand offerings. The survey measured customer needs, which included price, quality, digital, operations, convenience, speed and discounts/rewards. Of those elements, price and quality, which included assortment and store experience, took into account pricing on private brands and the freshness and quality of private brands, among other elements.
The report also looks at which retailers might be seen as well-prepared for a potential recession based on their current price perception, private brands, promotional offerings, and relatively low levels of cross-shop with such discounters as ALDI, Walmart and Dollar General. H-E-B also took the top spot on that list, followed by Kroger’s Fry’s banner, Costco, Market Basket and Kroger’s King Soopers banner in the top five.
Private brands play a particularly important role when it comes to regional traditional retailers being competitive with national nontraditional sellers, the report says. It notes that in the top two quartiles, success was generally seen by retailers combining highly relevant assortment and promotions with a strong private brand.
“While traditional retailers will never be able to compete wholesale on base price due to scale and operating model disadvantages, it is possible to invest in and achieve positive differentiation on brand,” the report says. “Balanced-Value traditional retailers in the top two quartiles have less work to do on the private brand front than Balanced-Value traditional retailers in the bottom two quartiles. Why? Private brand in particular is a key driver to success, as was demonstrated in last year’s grocery RPI.”