Grocery shopping these days can feel like a series of trade-offs. Low prices are important, but you get what you pay for, so quality matters, too. Everyone loves a discount, but not everyone wants to put in the effort to get one. And the stores with the highest-quality items can often be lacking in everything else.
So what’s a grocery shopper to do? A new survey finds that we’d all do well to seek out a store that hits the sweet spot – low prices for the everyday shopper, additional discounts for the deal-seekers, high quality for the discriminating customer, and a full selection for everyone.
Does such a store exist? That’s what dunnhumby aimed to find out in its ninth annual Retailer Preference Index for American grocery stores. And for the fourth year in a row, shoppers have named one particular store as the one that comes the closest to being all things for all shoppers.
That store would be Texas-based H-E-B, followed for the second year by New England’s Market Basket, with newcomer Woodman’s of Wisconsin taking third place.
dunnhumby comes up with its winners through a combination of surveying 11,000 grocery shoppers, and analyzing the financial performance of the country’s 81 largest grocery retailers. The stores that shoppers like best – and that perform best financially – are the models dunnhumby has identified for others to follow.
To appreciate what the winners are doing best, it’s worth a closer look at what the runners-up and the also-rans are doing.
While shoppers appreciate savings, the stores that offer the best prices and most appealing deals aren’t the best overall performers. When asked what stores have the best discounts and sales, shoppers ranked Grocery Outlet number one. Kroger-owned Smith’s earned top honors for its loyalty program, and ALDI was noted for having the best everyday low prices.
But stores like ALDI and Grocery Outlet have limited selections, and shoppers can’t often get everything they need there. Stores like Kroger and Smith’s may have good loyalty deals and discounts, but it’s the everyday prices that shoppers are more concerned with. For price-sensitive shoppers, dunnhumby found that the most important attribute in a store is one that “already has low prices, without using lots of coupons or special sales.”
Price isn’t everything, though. Wegmans, Whole Foods and Sprouts are top-ranked when it comes to the quality of their offerings. But stores that focus on quality, particularly Whole Foods and Sprouts, aren’t the best one-stop shops. dunnhumby found that nearly two-thirds of shoppers who prefer stores known for their high quality end up doing the rest of their shopping at stores known for their low prices.
That led dunnhumby to find that, when it comes to determining the best grocery store, “quality isn’t enough.” Nor is having the lowest prices, if it means having to jump through hoops to save, or having to do fill-in shopping trips somewhere else.
And yet both attributes are important. While factors like digital tools, speed and convenience, and overall shopping experience declined in importance, “for the first time, we saw a notable increase in the importance of both savings and quality,” dunnhumby noted, indicating that shoppers now want and expect both.
Stores like H-E-B, Market Basket and Woodman’s, the report found, are best at meeting both needs. And others are trying. The quality at low-price stores is improving – just picture the produce department at your local ALDI or Walmart today as compared to, say, ten years ago. And the prices at high-quality stores are improving as well – Sprouts has a loyalty program now, and Whole Foods’ prices are much more competitive than they were when the store was derided as “Whole Paycheck.”
It’s the average, everyday, mid-market, conventional grocery chains that need to watch out. Average or worse on both quality and savings, they’re “getting squeezed on both ends, and the pressure has only increased,” dunnhumby warned.
“Long-term success is all about delivering on consumers’ basic needs,” the report concluded. “Customers remain frustrated with grocery industry everyday prices,” so they’re more interested in lower prices at the shelf than they are in coupons and loyalty deals. And they’re “now, more than ever, trying to maximize value on their purchases,” making sure they’re not skimping on quality just to save money.
Low prices and high quality don’t often go together. But the grocery stores that figure out how to offer both, are best placed to earn shoppers’ business. And then grocery shopping doesn’t have to mean settling for trade-offs at all.
Image source: H-E-B
