Amazon Is Now America's Favorite Grocer, Annual Survey Says
Beating out the likes of Trader Joe's and H-E-B, the digital retailer has gotten a major bump due to the pandemic.
For four years now, the consumer data science firm Dunnhumby has ranked America's top grocers in their annual Retailer Preference Index—and in general, the results have felt somewhat predictable. In 2018 and 2019, the perennially-beloved chain Trader Joe's took the top spot. Last year, Joe was finally unseated, but by another cult-favorite, Texas-based H-E-B. But in this year's index, a new name has taken over the grocery scene… just like they've wanted to. Yes, America's favorite grocer is Amazon.
As we all know, 2020 was a year like none other, and Dunnhumby admits the pandemic drastically changed the grocery landscape. The firm even explains they had to model against COVID era gains and losses. Still, a massive pandemic bump was enough to propel Amazon to the top spot from third on last year's list. Meanwhile, 2020's top two stores—H-E-B and Trader Joe's—dropped to second and third respectively.
"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," Grant Steadman, Dunnhumby's president of North America, stated. "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."
To compile the ranking of 56 retailers, over 10,000 U.S. households are surveyed, looking at seven drivers of consumer preference: price, quality, digital, operations, convenience, discounts, rewards and information, and speed. For 2021, Amazon topped the "digital" category—which looks at ease of use—and finished second in speed—which looks at time needed to complete the shopping experience. This, coupled with Amazon's ability to compete on price—finishing 11th in that metric—was enough to seal Amazon's victory.
Rounding out the top ten were Wegman's (which led in quality), Aldi (which was first on price), Market Basket, Sam's Club, Costco (which led in stock availability and price consistency), Publix, and Target—which saw the biggest jump of any store in this group and landed in the top ten for the first time.
Beyond giving a boost to Amazon, COVID also worked to some chain's detriment, especially grocers focused on lower prices. "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 percent higher in 2020 versus 2019, " Dunnhumby wrote.
And yet, despite the need to process all of these changes, Dunnhumby stressed that things will likely swing back once the pandemic subsides—and in the long-term, quality and price have proved to be king. Steadman continued, "As we begin to emerge from the pandemic, we should expect value perception to come back strongly."
Still, it points to a larger question many have been wondering: How will the pandemic affect our behavior even after it ends? Sounds like we'll have to keep an eye on how Amazon does on the 2022 list and beyond to find out.