Trader Joe’s, Whole Foods, Publix among grocers in American Innovation Index

Trader Joe’s led a group of food and drug retailers named to Fordham University’ 2022 American Innovation Index.

The American Innovation Index (Aii), from Fordham’s Gabelli School of Business and market research firm Rockbridge Associates, scores and ranks the innovativeness of U.S. companies based on their customers’ experiences. This year’s study, conducted in July and August, covered 190 firms from 19 industries, including retailers, manufacturers, airlines, hotels, banks, TV and online service providers and cell phone providers. Researchers polled 6,416 consumers and examined more than 30,000 customer-company relationships.

Monrovia, Calif.-based Trader Joe’s was the only brick-and-mortar grocer to make the Aii Top 25 Companies list, coming in at No. 15 with a score of 79.1. Amazon also made the top 25, finishing 19th with a score of 70.

Eleven retailers made the Aii “Supermarket and Drug Stores” sector benchmark, with Trader Joe’s (79.1), Whole Foods Market (76.7), Publix Super Markets (75.3), Aldi (74.7) and CVS (67.8) posting top-five scores. Also making the Aii food and drug sector index were Kroger at No. 6 (score of 66.8), Albertsons at No. 7 (66), Walgreens at No. 8 (65.1), Safeway at No. 9 (61.2), Rite Aid at No. 10 (61.1) and Ahold Delhaize USA at No. 11 (59.6). Aside from Trader Joe’s, the highest overall Aii finisher in this group was Whole Foods at No. 31.

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Grouped in the Aii’s “General Merchandise Retailers” sector benchmark were Amazon, which led the subindex with a score of 78.8, and Costco Wholesale, whose 77.3 score put the warehouse club chain at second. Also making the list in this sector were Target at No. 7 (score of 70.8), Dollar General at No. 8 (68.5), Dollar Tree at No. 10 (67.8) and Walmart at No. 11 (67.6). Save for Amazon, the highest overall Aii finisher in the GM retailer group was Costco at No. 27.

The 2022 Aii indicates that American business innovation has climbed to a five-year high, according to New York-based Fordham’s Gabelli School of Business. After a surge during the peak of the pandemic, the Aii gained 5.6 points between 2018 and 2022. Fordham noted that the last five years have been “turbulent times” in the United States, as companies were pushed to rethink their business models and meet fast-changing consumer needs and priorities.

Two supermarket retailers were among a dozen companies posting the largest increases in company innovativeness over the past five years. Ahold Delhaize led the field with a 20.6-point gain, while Albertsons tied for eighth among the fast-growers with an 11.2-point uptick.

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Though customer loyalty didn’t jump dramatically over the past five years, up an average of 3.7 points, Fordham and Rockbridge found that innovation benefitting the customer pasy off. The researchers said such innovation links directly to higher stock returns, and companies with higher Aii scores typically achiever higher loyalty and, in turn, more financial success.

“Top companies understand the effect of innovation on customer loyalty, and our research has proven it,” according to Lerzan Aksoy, professor of marketing at Fordham University’s Gabelli School of Business. “Companies that invest in customer-focused innovation are more financially successful, but it does take time for companies to reap the rewards of higher loyalty.”

Fordham and Rockbridge’s study also included the Social Innovation Index (Sii), which gauges company innovation that benefits society and the environment based on customer experiences. The Sii has risen 5.9 points over the past five years, likely reflecting the impact of the pandemic, social justice movement and climate crisis, as well as a sharper focus on environmental, social and governance (ESG) policy in the U.S. corporate realm, the researchers said.

Whole Foods led the Sii in the Supermarket/Drug Store sector with a score of 72.1, followed by Trader Joe’s (70), Aldi (69.8), Publix (69.3) and CVS (66) in the top five. In the GM retail group, Amazon (score of 70) and Costco (67.5) made the Sii top five in the sector among companies in the food/drug/mass retail channel. Ahold Delhaize, again, saw the biggest gain in the Sii, up 16.9 points.

“Customers have noticed the efforts of top companies to innovate for the greater good, and our research has proven that it matters to them,” stated Gina Woodall, president of Rockbridge Associates. “They reward companies with a focus on social innovation with higher loyalty, and this in turn is reflected in the bottom line.”