Shoppers Pick Trader Joe’s as their Favorite Grocer

Article originally posted on Phoenix Business Journal on January 10, 2019

Shoppers pick Trader Joe's as their favorite grocer

Shoppers in a nationwide survey rated Trader Joe’s as the top grocery store for the second year in a row because of the retailer’s ability to understand customer needs and deliver on price and quality.

The 2019 Retailer Preference Index — Grocery Edition compiled by customer data science surveyed company dunnhumby analyzed survey input from 7,000 U.S. households to determine which of the 56 largest grocery retailers have the strongest combination of financial performance and consumer loyalty.

After Trader Joe’s, the other grocers with the highest overall consumer preference index scores were Costco Wholesale (NASDAQ:COST), Amazon (NASDAQ:AMZN), Texas supermarket chain H-E-B, and Wegmans Food Markets.

Rounding out the top 10 were Market Basket, Sam’s Club, Sprouts Farmers Markets, WinCo Foods, and Walmart (NYSE:WMT).

Aldi made the list at No. 11, followed by online grocery delivery service Peapod at No. 12, and The Fresh Market at No. 13.

The index evaluated retailer performance based on seven factors: price, quality, digital presence, operations, convenience, discounts/rewards and speed. The study found that retailers that focus on price and quality, a combination of factors known as value perception, tend to have the most financial success and the strongest emotional bond with consumers.

Amazon, which bought Whole Foods for $13.7 billion, has the advantage of both a strong online and bricks-and-mortar presence in the grocery business. But although Trader Joe’s has smaller stores, no digital shopping presence, and a limited offering of national brands, the retailer focuses on speed of in-store shopping and has a wide variety of private-brand products that shoppers perceive as high in quality and well-priced.

The study found that a strong private brand is a common key to driving value perception and improving customer preference for retailers with six of the top 10 private-brand performers ranking in the first quartile of the index.

Earlier research by consulting firm Magid found that Trader Joe’s reputation for offering “unique, trendy products that are ahead of national brands” makes its private-label products a favorite among shoppers.

The study found that 56 percent of U.S. consumers would consider buying private label products there.

Rated just behind Trader Joe’s for their private brands were Meijer and Aldi at 55 percent and Publix, Kroger and Costco at 53 percent.

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