H-E-B- Sits Atop dunnhumby List of Top U.S. Grocery Retailers

Texas based H-E-B is living up to its high reputation as the regional grocer is ranked No. 1 in dunnhumby’s annual Retailer Preference Index (RPI). 

The company, which operates more than 430 stores in Texas and Mexico, sits ahead of major national retailers Costco (2) and Amazon (3) on a list that is produced from a nationwide study of the $1 trillion U.S. grocery market. Rounding out the Top-10 are Market Basket (4), Sam’s Club (5), Wegmans (6), Aldi (7), Shoprite (8), Walmart Neighborhood Market (9), and Walmart (10). 

“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. In this year’s RPI, we illuminate how the consumer views the grocery market, and how different retailers are meeting the general population’s needs as well as the needs of different consumer segments.”

The dunnhumby RPI combines financial results with customer perception when ranking grocers. 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. 

The five drivers of the customer value proposition are in order: (1) Price, Promotions, and Rewards, (2) Quality, (3) Digital, (4) Operations, and (5) Speed and Convenience.

Other key findings in the RPI include:

• dunnhumby forecasts the U.S. grocery market sales growth will be 0.5% to 1.5% in 2024 — one of only three times in the last 30 years with growth below 1% and the slowest growth rate since the Great Recession of 2009. This 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.
• Competitive intensity is at an all-time high in this fourth year of economic uncertainty. Customers are re-evaluating retailer value propositions more than ever, ensuring those value propositions align with their needs. The average retailer ranking in a value proposition changed by six spots, higher than any previous year.
• Savings through low base prices and highly personalized promotions and rewards remains the strongest driver of better long-term retailer performance, followed by maintaining high quality assortment. Market Basket (1), Winco (2), and Aldi (3) are the top three in the RPI’s “Price, Promotions, Rewards” pillar, due to the strongest combination of mass and personalized pricing levers. Wegmans (1), Trader Joe’s (2), and The Fresh Market (3) are the top three in the “Quality” pillar. Wegman’s has held the top position in the “Quality” pillar every year of the RPI.
• H-E-B topped the RPI ranking because they have the strongest customer value proposition for the long-term, dunnhumby said. This is due to their ability to deliver a combination of better savings and better experience/assortment, supported by time savings through superior digital capabilities.
• Amazon has been in the top three every year of the RPI and has ranked first twice. They are doing this with a segmented approach, rather than building a customer value proposition that equally attracts different segments of the general population.
• Two Kroger banners (Kroger and Fry’s) made it to the top quartile (the top 16 retailers in the RPI) for the first time in the history of the RPI. The Kroger banners’ move into the first quartile can be explained by improvements they drove in overall price perception in 2023, a year when saving customers money mattered more than any year in this study, prior to 2022. Two other Kroger banners (Fred Meyer and King Soopers) were also among the biggest climbers in this year’s RPI ranking. These latter two sit in the second quartile, just outside of the first quartile.