Grocery shopping has been anything but normal in recent years. First came Covid, then inflation, leaving shell-shocked shoppers without a lot of time to sit back and ponder which grocery store they like the most – after all, with grocery shopping having become so unpleasant, we kind of didn’t like any of them. But that’s starting to change, and stores that offer low prices and relevant promotions are the ones that are cementing their status as customers’ favorites.
That’s according to dunnhumby’s Seventh Annual Retailer Preference Index, which combines shopper surveys with financial performance data for dozens of grocery chains, to find out which stores are doing best at giving shoppers what they’re looking for.
Some findings haven’t changed much year over year. The Texas grocer H-E-B has earned the top overall spot for the second year in a row, besting Amazon and Costco, “due to their superior ability to deliver a combination of better savings and better experience/assortment,” dunnhumby found. Higher-end, higher-priced grocery stores don’t do as well in the rankings, since savings are shoppers’ top priority.
But when the results are broken down by which retailers do best in specific categories, there’s been a bit of a reshuffling in the rankings. “The importance of saving customers money remained at its elevated high,” dunnhumby noted. But shoppers are beginning to take a closer look at what really works for them, as adjusting to today’s new normal is “allowing them to scrutinize their retailer options more closely and how well those retailers truly align to their needs.”
And lately, shoppers seem to like Kroger. “For the first time in the history of our study, two Kroger banners made it to the top,” dunnhumby pointed out. The country’s largest traditional grocery chain has “made improvements in customer perception of savings in 2023… a year when saving customers money mattered more than any year in our study, prior to 2022.” Kroger and Kroger-owned Fry’s rose in the rankings to join the top quartile of all 65 retailers that were ranked. Kroger-owned Fred Meyer and King Soopers were also among the biggest climbers in the rankings, each of them rising 13 spots to the high end of the second quartile. “Kroger banners tend to be best-in-class at targeted savings,” dunnhumby noted. The retailer’s low everyday prices and personalized promotions have proven to be a potent combination.
That’s because many grocery retailers tend to excel in just one or the other. Market Basket, WinCo and ALDI are tops in the category of low prices, but none of them appear anywhere near the top of the “promotions and rewards” category. That category is dominated by Kroger-owned stores, with Fry’s and Smith’s leading the pack, and King Soopers, Fred Meyer and Kroger itself not far behind.
Interestingly, Safeway – soon to be owned by Kroger, if federal regulators allow it – is number five on the list of stores with the best promotions and rewards. And Winn-Dixie, soon to be owned by ALDI, is number three. So together, Kroger and ALDI could end up with a lock on seven of the top ten promotional retailers if this year’s results carry over to next year.
For many grocery shoppers who frequent other stores, though, “‘Low Base Prices’ and ‘Promotion Relevance’ are two critical unmet needs,” dunnhumby found. “The retailers who solve these pain points will not only win over customers, but also shine a light on the inadequacies of retailers not meeting those needs.” And personalization is increasingly crucial. “It’s important for retailers who promote, to do so on the products most relevant to an individual consumer,” the report noted, “because if they do not do it well, there is an option out there that is.”
Overall, “competitive intensity is at an all-time high in this second year of inflation/economic uncertainty,” the report concluded. “Customers are re-evaluating their opinions of retailers more than ever,” dunnhumby’s President of the Americas Matt O’Grady said in a statement, “and that will only intensify in the coming months due to the economic headwinds facing consumers.”
So some grocery retailers might offer high-end products, spotless stores, impeccable service – and the prices to match. Others might offer rock-bottom prices, but a smaller selection, few opportunities for additional savings, and a shopping experience that leaves a little something to be desired. The stores that manage to offer the best regular prices, and the best promotions that will help you save even more on what’s important to you, are the ones poised to achieve the greatest success, dunnhumby found. And if more money in your pocket in the form of savings, helps put more money in their pockets in the form of profits – that could prove to be a win-win for everyone.
Image source: H-E-B
Still not like the good old days. Stores would put coupons in the flyer to double the coupon and it was not limited to a buck. Then other stores would honor those store coupons….you could save money like there was no tomorrow. Those days are gone.