With rampant inflation consumers are citing price and value as the top reasons why they are either switching the grocery store they shop at or splitting their business between multiple grocery stores. Sensitivity to pricing is a major factor in consumers' purchasing decisions and it is common for consumers to split their spending across three or more grocery providers.
According to consumers, Walmart is the winner in terms of wallet share, Kroger, and Aldi rank second and third, although there is a considerable gap with Walmart leading by a factor of almost 2x over Kroger. This margin has widened since 2017 when Walmart's lead was at 1.75x vs. Kroger, demonstrating Walmart's continued market penetration over the past five years.
Of note H-E-B shoppers noted that they spent 78% of their grocery dollars with the brand, making H-E-B a clear leader in terms of their ability to capture wallet share vs. their local competitors. From a value perspective the winner was Aldi with a top box score of 90%.
Of the key decision criteria that drive consumers to choose a grocery store, "convenience" ranks at No. 1 and was selected by 62% of respondents. "Value" was the second most chosen factor at 53% and "good sales and promotions" was selected 44% of the time.
The impact of in-store execution
Given relatively similar pricing, grocery customers' satisfaction and behavior (in terms of the brands they shop regularly) is really dictated by the brand's ability to facilitate a problem free experience. This experience is generally characterized by the availability of a large assortment of products, having a clean store and enabling a fast checkout.
Even with that relatively simple formula, there are some winners and losers who are well positioned to win share of wallet, drive customer loyalty and build trust over time. These brands include Trader Joe's, Smiths, and Wegmans. Large, established brands that have established trust with customers include H-E-B, Publix and Trader Joe's.
COVID's waning has corresponded with a slowing in the growth of customers opting for grocery delivery (down from a high of 27% during the height of COVID to about 10% today). Technology is still on the rise with more customers now using an app to order groceries for pick-up at curbside or at a store designated pick-up area. The study sees this fulfillment method increasing from 16% to 23% of grocery customers. Over two-thirds (68%) of these customers are very satisfied with this alternate method of shopping for groceries. As technology continues to be applied to the grocery shopping experience, the forecast is for continued growth in these newer shopping and fulfillment channels.
The top performing grocery brands
This year's top brands who scored best on the customer loyalty index (CLI), a blended score combining "satisfaction" with the most recent visit with "likelihood to recommend" was Trader Joe's with a CLI of 84%. H-E-B came in second with a score of 83% and Woodman's Market came in third with a score of 81%.
Customers also were asked if they perceive their grocer of choice to be "best in class". For this accolade two brands stand out above the rest. Wegman's came in first with 76% agreement, and H-E-B was a close second at 73% agreement.
The 46 brands featured in the study include: ACME Markets, Albertsons, Aldi, Amazon Fresh, BJ's, Costco, Dillons, Food Lion, Fred Meyer, Fry's, Giant Eagle, Giant Food Stores, Grocery Outlet, H-E-B, Hannaford Supermarkets, Harris Teeter, Hy-Vee, Food Stores, Ingles Markets, Jewel Osco, King Soopers, Kroger, Label, Lidl, Market Basket, Meijer, Price Chopper, Publix Super Markets, Ralph's, Safeway, Sam's Club, Schnuck Markets, Shaw's, ShopRite, Smith's, Sprouts Farmers Markets, Stop & Shop, Target, Trader Joe's Market, Vons, Walmart, Wegmans, Weis Markets, Whole Foods Market, WinCo Foods, Winn-Dixie Stores, Woodman's Markets