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09/21/2022

Top Grocery Retailers Beating Inflation 2022

Liz Dominguez
Managing Editor
Liz Dominguez profile picture
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Grocery retailers leading despite inflation

Inflation headwinds are affecting businesses across the globe. In order to better gauge the impact on the retail sector, Dunnhumby recently released a special edition of its Retailer Preference Index, a nationwide study of the $1 trillion U.S. grocery market, examining which grocers are winning customers despite the ongoing inflation crisis. 

The edition was released Sept.19-22 as Dunnhumby attends the Groceryshop expo at Mandalay Bay Resort in Las Vegas.

Since November 2021, inflation has surpassed rates not seen since 1964 - 1982, said Dunnhumby. How are today’s retailers attracting shoppers even as consumers face budget challenges and global food and energy supply shortages?

Retailers who can show consumers they are helping them save money are winning out. This is largely the preference compared to saving them time, making products better, or making the process seamless, which provide a smaller impact on outcomes. 

Market Basket is taking the lead in Dunnhumby’s Inflation RPI rankings, coming on top in the Save Me Money pillar. Meanwhile  Publix is a market leader in Save Me Time, Make it Better and Make it Dependable

The full RPI report can be downloaded today. This is an update to the dunnhumby Retailer Preference Index (RPI), released earlier this year. See how the rankings compare here.

Top 17 Grocery Retailers

Best-Positioned to Gain Visits and Strengthen Emotional Connection With Shoppers During Inflation 

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List of grocery retailers winning against inflation

Key findings from the study include:

 

1. Due to record inflation, consumers are struggling more than ever to pay their bills, and grocery stores are often the largest line item on the household budget that offers some flexibility. 

2. Inflation is hitting certain premium specialty retailers hard, particularly regional grocers such as Publix and Harris Teeter. Which are behind the market in year-over-year visit growth. 

3. Will cost-savings or quality win out? Many of the retailers ranked in the top quartile for their strength in customer value proposition during inflation are also vulnerable in the long term due to quality weaknesses. These include Dollar General, Grocery Outlet, and Save-a-Lot.

4. Retailers looking to drive results should focus on saving customer money, as it is 5x more important than delivering high quality. This is reflective of shoppers’ willingness to trade down on quality to make ends meet. In the long-term, however, saving customers money is only 1.5x more important than delivering high quality products.

5. Retailers looking to save customers money should focus on base price, which accounts for about 50% of “retailer saves me money” perception. Other areas like mass promotions and communications, personalized promotions, and loyalty programs drive the other 50%.  

    Methodology

    Dunnhumby surveyed 18,000 grocery shoppers in two waves of research: one in October 2021 and one in June 2022. The company gathered perceptions on the 70 largest grocery retailers and modeled their responses against Placer.ai foot traffic and Similarweb web traffic to see which preference drivers had more impact on traffic growth and emotional connection with retailers.

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