• by Sarah Mahoney  @mahoney_sarah, January 11, 2024

In a rough year for grocery retailers, H-E-B has retained the top spot in Dunnhumby’s annual grocery ranking, followed by Amazon and Costco. Regional chains made significant inroads, as inflation caused consumers to rethink their choices of digital and physical supermarkets.

Market Basket, Sam’s Club, Wegman’s, Aldi, Shoprite, Walmart Neighborhood Market and Walmart round out the top 10.

Dunnhumby, a customer data and loyalty consultant, analyzes the $1 trillion U.S. grocery market through multiple lenses, including business performance. And those chains that rank in the top quartile of the index are growing much faster, at a five-year annual rate of 8.5%, than those in the bottom quartile, which have a five-year growth rate of just 3.6%.

Dunnhumby combines financial analysis of the 65 largest grocers with customer insights from 10,000 grocery shoppers, asking about price, promotions and rewards; quality; digital; operations, and finally, speed and convenience. 

Market Basket, Winco and Aldi take the top three based on price, promotion and rewards.

On quality measures, Wegman’s, Trader Joe’s and the Fresh Market lead. Wegman’s has taken the No. 1 quality spot in each of Dunnhumby’s seven annual rankings.

Amazon has held a Top Three position in every index – interesting given the company’s well-publicized stumbles in grocery. But the many things Amazon gets right really matter to shoppers. Dunnhumby says it excels by concentrating on segments. People most interested in saving time through digital experiences and those looking to make healthier choices account for about half of Amazon’s grocery revenue, about five times higher than the average retailer. While it’s first in digital, Amazon ranks 27^th in price and just 35^th in quality.

Target ranks second in digital, followed by Walmart.

Regional supermarkets are among 2023’s biggest climbers.

The Texas-based H-E-B wins the overall crown based on balance, with high marks on savings, experience and assortment, as well as superior digital capabilities.

Dunnhumby also anticipates a challenging year ahead, predicting growth between 0.5% and 1.5%, the slowest forecast since 2009. The industry’s growth rate has only fallen below 1% three times in the last 30 years.

“This slowdown is due to the economic headwinds still facing consumers – slowing disposable income growth, lower savings rate, higher debt, cost to service consumer debt, and the drying up of pandemic-related savings buffers,” the Chicago-based company says in the report.

That’s impacting the way people make grocery choices. Based on the value proposition, the average retailer in the index changed by six spots, higher than any previous year.