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Amazon tops H-E-B, Trader Joe’s on dunnhumby grocery retailer index

New COVID Momentum Metric gauges retailer execution during pandemic

Russell Redman

January 11, 2021

8 Min Read
Amazon_Fresh_customer-center_store-Woodland_Hills.png
Amazon, whose grocery operations also include the new Amazon Fresh supermarkets, came in first on dunnhumby's overall Retailer Preference Index for 2021 as well as on the COVID Momentum Metric.Amazon

In a year when a global pandemic underscored the importance of supermarkets, Amazon bested H-E-B and Trader Joe’s as the top U.S. grocery retailer in the fourth annual dunnhumby Retailer Preference Index (RPI).

Dunnhumby’s 2021 RPI, released Monday, surveyed 10,000 U.S. households and evaluated the 56 largest retailers in the approximately $1 trillion U.S. grocery market to determine which have the strongest blend of consumer emotional sentiment and financial performance. 

Amazon came in at No. 1 on this year’s list, edging out last year’s leader H-E-B at No. 2 and Trader Joe’s at No. 3. The top finisher in the first two RPI studies, Trader Joe’s held second place last year.

Movement in the ranking 

Deep discount grocer Aldi moved up two spots to crack the top five this year, taking over the No. 5 position from Market Basket, which finished at No. 6. New among dunnhumby’s top 14 “first-quartile” grocery retailers in the RPI is Target, which climbed six spots to grab 10th place.

Dunnhumby 2021 Retailer Preference Index-top retailers overall.jpg“This marks the first year that Amazon claims the top spot in our study, jumping from third place to overtake last year’s winner, H-E-B. Trader Joe’s slides from second to third place, rounding out our top three,” dunnhumby said in the 2021 RPI report. “Target, due to strong COVID-driven momentum, second only to Amazon, is a newcomer to the first quartile.”

Related:H-E-B bests Trader Joe’s in dunnhumby grocery retailer ranking

Other high-ranked retailers moving up this year were Wegmans (to No. 4 from No. 5), Sam’s Club (to No. 7 from No. 8), Publix Super Markets (to No. 9 from No. 10), Fresh Thyme Market (to No. 11 from No. 12) and ShopRite (to No. 12 from No. 14). Sprouts Farmers Market held firm at No. 13.

WinCo Foods, last year’s No. 11 finisher, fell out of the top 14 in the 2021 RPI. Aside from H-E-B, Trader Joe’s and Market Basket, other retailers slipping in the rankings this year were Costco Wholesale (to No. 8 from No. 6) and Walmart (to No. 14 from No. 9).

Of all retailers examined by dunnhumby, Food Lion posted the largest year-over-year rise in the ranking, up seven slots to No. 35. Other notable gainers included Target (up six spots to No. 10), Kroger (up five spots to No. 20) and BJ’s Wholesale Club (up five spots to No. 32).

For the RPI, dunnhumby focuses on seven “preference drivers” — price; quality; digital; operations; convenience; discounts, rewards and information; and speed — that shape consumers’ emotional connection to a grocery retailer and that company’s financial performance. Along with the survey of U.S. households, the index’s statistical model reflects retailer financial measures such as size (grocery market share), efficiency (grocery sales per square foot) and sales growth (five-year compound annual growth rate). 

Related:Traditional grocers projected as ‘2021 winners’

Grocery retailers achieving superior value perception — an attractive mix of price and quality — tend to have the strongest emotional bond with consumers and the most financial success, the customer data science specialist said.

The COVID effect

Grant Steadman, president of Chicago-based dunnhumby North America, noted the impact of the coronavirus crisis in the 2021 RPI ranking. That led to this year’s inclusion of the COVID Momentum Metric, a statistical measure of how retailer execution on the RPI preference drivers affected short-term financial success, specifically market share gains or losses in 2020 versus 2019. 

Dunnhumby 2021 Retailer Preference Index-top COVID retailers.jpg“COVID has led to record highs and lows in economic metrics, along with huge shifts in where and how consumers shop food retail, changing the competitive trajectories of retailers who were winning and those who were struggling before the pandemic. As a result, we viewed 2020 through a different lens than we’ve viewed the grocery industry in previous years,” Steadman explained. 

As in the overall RPI ranking, Amazon finished first according to the COVID Momentum Metric, followed at No. 2 by Target. Also making the first quartile on the COVID metric were five Kroger Co. banners; Fry’s Food Stores (No. 3), Kroger (No. 5), Smith’s (No. 8), Harris Teeter (No. 11) and Ralphs (No. 12). 

Rounding out the top 14 in COVID momentum were BJ’s Wholesale Club (No. 4), Fareway Stores (No. 7), Publix (No. 9), Lidl (No. 10), Raley’s (No. 13) and Brookshire’s Grocery (No. 14).

With safety measures slowing down the in-store grocery shopping experience, speed proved to be the biggest factor among retailers with a high COVID Momentum Metric, dunnhumby found, as customers equated “speed to shop” with “safer to shop.” Factors affecting speed to shop included not just online grocery services, but also smaller stores, less foot traffic — as most retailers have seen during the pandemic — and conveniences such as contactless payment at checkout.

“Amazon accelerated past every other retailer on our COVID Momentum Metric and customer safety ratings, due to its speed to shop and virtual store format,” Steadman said. 

In terms of perception as a safe place to shop, Amazon again led all retailers in the RPI. But smaller operators also performed well on this front, with Food City (No. 2), Lowes Foods (No. 3), Brookshire’s (No. 4) and The Fresh Market (No. 5) rounding out the top five. Also making the first quartile of retailers for COVID safety were Publix (No. 6), Raley’s (No. 7), Fareway (No. 8), Fresh Thyme (No. 9), Family Fare (No. 10), Trader Joe’s (No. 11), Giant Food (No. 12), Schnuck Markets (No. 13) and Wegmans (No. 14).

According to the RPI report, “COVID created a perfect storm that played right into the unique strengths of Amazon’s customer value proposition.”

By the numbers

Pandemic-driven factors translated into distinct financial gains in the RPI. First-quartile retailers in the COVID Momentum Metric saw a 1.45% collective market-share increase ($11.5 billion), compared with share losses of -0.1% (-$800 million) for the second, -0.23% (-$1.8 billion) for the third and -1.02% (-$8.1 billion) for the fourth quartiles, dunnhumby reported. 

“Reaching the top quartile in our COVID Momentum Metric meant that you were a part of a group of retailers that saw $11.5 billion in grocery retail sales swing in your favor,” the study said. “If you were in the bottom quartile. you were part of a group that saw $8.1 billion in potential sales go unearned, compared to if those retailers held market share steady.”

Dunnhumby 2021 Retailer Preference Index-COVID market share change.jpg

By U.S. grocery sales, retailers in the first COVID Momentum quartile exhibited a compound annual growth rate of 13.1% ( 5.3 points over five-year CAGR) versus 8.5% for those in the second quartile ( 2.7 points over five-year CAGR), 6.5% for the third ( 3.0 points over five-year CAGR) and 5.1% for the fourth ( 1.5 points over five-year CAGR).

“Retailers who ranked higher on the COVID Momentum Metric also saw the prior trajectories of their sales growth change more, meaning not only did they grow the fastest during 2020, but they also experienced the most lift in their year-over-year sales growth compared to how fast they’d been growing the past five years,” dunnhumby stated.

First-quartile COVID Momentum grocery retailers, too, tallied more growth in visits versus the pre-pandemic period, posting a 1.95% gain, compared with upticks of 0.51% for the second and 0.44% for the third quartiles and a -2.8% decreased for the fourth quartile. 

“Viewed on the scale of 8.4 billion visits, this means that retailers in our top quartile COVID Momentum Metric won 164 million recorded visits during COVID, while the bottom-quartile retailers lost at least 235 million potential visits, compared to if they had held visit share steady during COVID,” according to dunnhumby, which cross-validated visit information with data from geo-tracking specialist Placer.ai.

Top performers

In the overall 2021 RPI, a variety of chains showed their mettle in the study’s preference drivers, which lean toward the “value core” of quality and price for retailers that finished high in the rankings. 

Dunnhumby 2021 Retailer Preference Index-retailer COVID safety.png

Here were the leaders in each of the seven preferences drivers, ranked from No. 1 to No. 5: 

Price: Aldi, Market Basket, WinCo, Lidl and Food4Less.

Quality: Wegmans, Trader Joe’s, Fresh Thyme, The Fresh Market and Sprouts.

Digital: Amazon, Target, Walmart, Sam’s Club and Lowes Foods.

Operations: Costco, Market Basket, BJ’s, WinCo and Food4Less.

Convenience: Walmart, Market Basket, Publix, Fry’s and Jewel-Osco.

Speed: Fareway, Amazon, Aldi, Fresh Thyme and Publix.

Discounts, Rewards and Information: Fry’s, Kroger, Price Chopper, King Soopers and Winn-Dixie.

Everyday-low-price (EDLP) grocery retailers are more likely to be well-positioned for long-term success versus hi-lo operators, though the latter saw momentum swing in their favor, the study revealed. 

“Price volatility and relatively dramatic price increases brought on by supply chain disruptions and increased demand made ‘everyday low prices’ a less reliable claim for customers, who perceived grocery prices to be 12% higher in 2020 versus 2019,” dunnhumby said. 

Interestingly, digital became less important during the pandemic in reinforcing long-term emotional bonds with shoppers, even though grocery e-commerce sales tripled in 2020, the 2021 RPI indicated. “For some customers it may have been purely transactional and not something they wanted to do or enjoyed doing,” dunnhumby posited. “Only retailers delivering a positive digital experience will retain them post-COVID.”

Price and quality still carry the heaviest weight for long-term sales growth, the research showed. Grocery retailers with above-average quality and price have a five-year CAGR of 6.9%, compared with a 2.3% five-year CAGR for retailers below average on both quality and price. 

“As we begin to emerge from the pandemic,” Steadman said, “we should expect value perception to come back strongly. Beyond COVID, retailers with customer-first strategies will best adapt to changing behaviors and deliver what matters most to their customers.” 

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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