Preference Report: Walmart falls to No. 9, H-E-B heads the list

The annual Retail Preference Index compiled by data science firm dunnhumby and released recently found Texas-based H-E-B as the top choice among grocery retailers ranked on price, quality, digital integration, operations, convenience, speed, discounts and rewards. The report lists 14 grocery retailers that made the top quartile of 60 retailers evaluated.

Walmart is the nation’s largest grocery chain by location and sales revenue, but it ranked No. 9 on the dunnhumby index for 2019. The Bentonville-based behemoth’s rating dropped from No. 5 in 2018. Trader Joe’s, a deep discounter, ranked No. 2, falling from its No. 1 spot last year. Amazon ranked No. 3 in both years, while it has a much smaller brick and mortar grocery footprint than its grocery competitors.

Market Basket scaled up the charts to No. 4 in 2019 from the No. 10 position last year. Wegman’s also made positive strides rising to No. 5 up one level from the prior year. Costco ranked No. 6 falling from No. 2 in 2018. Deep discounter Aldi held the No. 7 position in 2019 and the prior year. Sam’s Club also stood pat at No. 8 in both years.

Publix was one spot behind Walmart at No 10 in the 2019 index report. Publix did not make the first quartile cut in 2018. Winco remained at No. 11 and Fresh Thyme made its first quartile appearance at No. 12. Sprouts Farmers Markets fell to No. 13 from No. 9 in the prior year. ShopRite rounded out the top 14 in this year’s report.

“The one thing that all top quartile retailers have in common is an excellent value core,” the report states.

Scores of the values varied across the metrics examined for the report. For instance, those retailers with the highest scores in digital integration include Walmart, Target and Amazon, while others like Market Basket, Trader Joe’s, Aldi and Winco typically score poorly in this metric. The report said retailers that have a higher RPI ranking tend to have better financial performance and emotional bonds. The report said the top quartile suggests traditional, regional grocers may be gaining momentum with Publix and ShopRite making the cut this year.

Looking at the specific metrics price was among the most important for all the retailer outcomes. Considering that food spending accounts for 10% of the average household’s income a year (or about $7,000), it’s logical that consumers see food spending as a productive place to optimize the household budget. And for lowest-income households, that share is even higher, at 35% of their disposable income.

The winners on price in the report are Aldi, Market Basket, WinCo, Lidl, Trader Joe’s, Costco, Walmart, Food4Less, Amazon, H-E-B, Sam’s Club AmazonGo, BJ.s and ShopRite. The report spotlighted AmazonGo with just 13 locations in urban areas. The report said while AmazonGo ranked No. 12 on price, the chain still has operational challenges, price consistency and out-of-stock management issues.

In the quality metric, Wegman’s, Fresh Market, Fresh Thyme, Trader Joe’s and Publix scored the highest. Walmart did not make the top cut in this metric. H-E-B scored No. 9 and Costco was ranked No. 13. With digital rankings, Amazon, AmazonGo, Peapod, Target and Walmart made the top 5. Sam’ Club ranked No. 7 and Kroger was the cutoff at No. 14. The report considers “digital” as having an easy-to-shop online or mobile app-based experience.

Operationally, the survey looked at retailers on-shelf availability, In this metric, H-E-B leads the pack, followed by Costco, Market Basket, B.J.’s, and Sam’s Club for the top 5. Target came in at No. 11 and Walmart did not make the top quartile. When considering convenience the report looked at proximity, one-stop shopability and right product variety and that help shoppers overcome certain challenges in their lives. Walmart ranked No. 1 in this metric, followed by Publix. H-E-B, Kroger and Food Lion also made the top quartile in the convenience metric.

“About 70% of Americans live in rural or suburban areas, where hopping in a car and navigating traffic to and from grocery stores takes time. Some urban Americans face unpredictable transportation issues and congestion that makes stores close to home or within walking distance a no-brainer. Many grocery stores are clustered so close to competition that if one place isn’t a one-stop-shop or prices are too high to buy everything there, shoppers can merely go to an equally close location to round out their basket,” the report states.

Speed is also an important metric for shopping given consumers are time-starved and looking for short-cuts to make their days easier, the report states. At no surprise, Amazon ranked No. 1 in this metric. Aldi followed at No. 2. Target made big strides in 2019 in this metric rising to No. 10 from No. 19 in the prior year. Walmart did not make the top quartile in this metric which evaluate speed at checkout and time to shop.