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Report ranks Natural Grocers as Yelp favorite
A new analysis of customer reviews posted on the Yelp site indicates Natural Grocers by Vitamin Cottage draws the highest customer satisfaction scores from a group of selected publicly traded food retailers.
2 Min Read
A new analysis of customer reviews posted on the Yelp site indicates Natural Grocers by Vitamin Cottage, Lakewood, Colo., draws the highest customer satisfaction scores from a group of selected publicly traded food retailers.
The analysis, published in a research note Friday by Bill Kirk of RBC Capital Markets, manually aggregated more than 130,000 Yelp customer reviews on more than 2,050 grocery stores. On Yelp’s five-star rating system, Natural Grocers averaged 4.14, the highest overall score among a group of publicly traded peers, followed by Sprouts Farmers Market (3.87), Whole Foods (3.71), The Fresh Market (3.70), Smart & Final (3.57), Kroger (3.37) and Supervalu’s Save-A-Lot (3.17). A “weighted average” removing the effect of rarely-reviewed stores resulted in the same sequential ranking, Kirk noted.
Natural Grocers’ scores compared favorably to privately held Trader Joe’s (4.24 average score) and Publix (4.10); and outscored Trader Joe’s in its core Colorado markets 4.09 to 4.08.
“We believe that investors who would love the opportunity to invest in privately held Trader Joe’s are ignoring a similar opportunity at Natural Grocers,” Kirk said.
Sprouts, the second-highest rated retailer in RBC’s coverage by Yelp scores, was also outperforming its peers among its newer stores – an indication supporting the company’s ongoing geographical expansion.
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“Other regional strong retailers have struggled when expanding outside their core markets,” Kirk wrote. Although Sprouts tended to draw slightly lower review scores in newer markets of Kansas, Missouri, Georgia, Alabama, and Tennessee (3.78) than established markets of Arizona and California (3.88), “we believe the small difference is encouraging. Using The Fresh Market (core in Southeast and new market of Texas) as a proxy, we find a sharper difference between reviews in new markets and reviews in core markets. The Fresh Market has an average review of 3.78 in the Southeast, but just 3.55 in Texas and 3.53 outside the Southeast.”
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