Inside America's favourite 'hidden gem' supermarket that no one has heard of
America's most beloved grocery chain has been named - and it's not Walmart or Costco.
H-E-B has been declared the favourite grocery retailer of consumers in the US, according to the latest dunnhumby Retailer Preference Index (RPI). The RPI is a study conducted nationwide that explores the $1 trillion US grocery market. H-E-B has secured the top spot for the third time, beating major players such as Amazon and Trader Joe's, both of whom have previously held the top spot twice.
The H-E-B Grocery Company operates over 380 stores in Texas and Mexico. As of 2022, the company had a revenue of $38.9 billion and was ranked 6th on Forbes's list of "America's Largest Private Companies." It was also recognized as Retailer of the Year in 2010 and holds the 13th position among the "Top 75 North American Food Retailers." H-E-B is the 19th-largest retailer in the US based on 2019 revenues.
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Economic challenges slow the US grocery market growth predicted at 0.5% to 1.5% in 2024 (Getty Images)Amazon secured the second position in the ranking, followed closely by Costco in third place, maintaining the top three grocers for the second consecutive year. Joining the ranks in the top 10 are Market Basket, Sam's Club, Wegman’s, Aldi, Shoprite, Walmart Neighborhood Market, and Walmart, each contributing to the diverse landscape of grocery retail.
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According to the dunnhumby Retailer Preference Index, the top quartile retailers exhibit a five-year Compound Annual Growth Rate (CAGR) of 8.5%, outperforming the 3.6% CAGR of retailers in the fourth quartile. Additionally, 59% of customers of first-quartile retailers express a strong emotional connection, compared to 41% of their counterparts in the fourth quartile.
Matt O’Grady, President of the Americas at dunnhumby, emphasized the critical role of understanding customer needs and competitive positioning for retailers in 2024. "Customers are re-evaluating their opinions of retailers more than ever, and that will only intensify in the coming months due to the economic headwinds facing consumers," O’Grady stated.
The dunnhumby RPI uniquely combines financial results with customer perception, incorporating data from the largest 65 retailers in the industry. The five drivers of the customer value proposition include Price, Promotions, and Rewards; Quality; Digital; Operations; and Speed and Convenience.
The study combines finance and customer views, highlighting the top-performing retailers' growth (Bloomberg via Getty Images)For all the latest news, politics, sports, and showbiz from the USA, go to The Mirror US
Despite challenging economic conditions, dunnhumby forecasts a modest growth of 0.5% to 1.5% in the US grocery market in 2024, marking the slowest growth rate since the Great Recession of 2009. Economic headwinds such as slowing disposable income growth, lower savings rates, higher debt, and the depletion of pandemic-related savings buffers contribute to this slowdown.
Savings through low base prices and personalized promotions emerge as the key drivers of long-term retailer performance, with Market Basket, Winco, and Aldi leading in the "Price, Promotions, Rewards" pillar. Wegman’s, Trader Joes, and The Fresh Market dominate the "Quality" pillar, with Wegman’s consistently holding the top position in this category.
H-E-B's ascendancy to the top of the RPI is attributed to its robust customer value proposition, combining savings and a superior shopping experience. Amazon, maintaining its top-three status every year, employs a segmented approach rather than a universal customer value proposition.
Two Kroger banners, Kroger and Fry’s, entered the top quartile for the first time in RPI history. Their improved overall price perception in 2023 played a pivotal role in this accomplishment. Additionally, Kroger banners Fred Meyer and King Soopers experienced significant climbs in this year’s ranking, securing positions just outside the first quartile.
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