H-E-B named top U.S. grocery retailer by dunnhumby

Data analytics firm dunnhumby has named Texas-based grocer H-E-B as the top U.S. Grocery Retailer in its seventh annual dunnhumby Retailer Preference Index, the company announced Thursday.

It’s the third time HEB has taken the top spot in the index, dunnhumby said. H-E-B was followed by Amazon at No. 2 and Costco at No. 3. The top 10 list is rounded out by Market Basket, Sam’s Club, Wegmans, Aldi, Shoprite, Walmart Neighborhood Market, and Walmart.

The dunnhumby report said H-E-B’s placement at the top of the index is due to the grocer’s strong long-term value proposition. “This is due to their superior ability to deliver a combination of better savings and better experience/assortment, supported by time savings through superior digital capabilities.”

The index is made up of the 65 largest retailers that sell everyday food and non-food items, and the ranking system considers the following five categories: price, promotions, and rewards; quality; digital; operations; and speed and convenience.

Retailers that made the top quartile of the index reported a five-year compound average growth rate of 8.5%. Fifty-nine percent of customers of grocers in the top quartile of the index said they have a strong emotional connection to the retailers. That’s compared to 41% who had a strong connection in the fourth quartile, dunnhumby said. 

“Knowing your customer and your competitive positioning regarding customer needs will be critical for retailers to scratch out any organic growth 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,” said Matt O’Grady, dunnhumby's president of the Americas, in a statement. “In this year’s RPI, we illuminate how the consumer views the grocery market, and how different retailers are meeting the general population’s needs as well as the needs of different consumer segments.”

The study also forecasts a 0.5% to 1.5% growth in grocery sales in 2024, which would be the slowest growth rate seen since the Great Recession of 2009. That prediction is based on “slowing disposable income growth, lower savings rate, higher debt, cost to service consumer debt, and the drying up of pandemic-related savings buffers.”

The report also noted that Market Basket, Winco, and Aldi took the top three spots, respectively, in the “Price, Promotions and Rewards” category of the index “due to the strongest combination of mass and personalized pricing levers.”

Wegman’s maintained its top position in the “Quality” category of the index, which it has held every year of the index since its inception.

Also, Kroger and Fry’s, both of which are Kroger banners, made it into the top quartile for the first time in history of the index, according to dunnhumby. That’s due to improvements in overall price perception in 2023, a category that carried greater weight in 2023 as customers searched for ways to save money in the face of inflation. Kroger banners Fred Meyer and King Soopers also moved up in the ranking, making it to the top of the second quartile, dunnhumby said.