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Discount grocer Aldi is the low-price grocery leader, according to a new consumer study by Market Force Information.
The panel research study, conducted in March with 6,100 participants, was designed to uncover why consumers choose one grocer over another and what the customer experience is like for grocery shoppers, among other insights.
The survey asked consumers to indicate which retailer captured most of their grocery dollars. Ten grocers topped the list, including Aldi, Costco, Giant Foods, H-E-B, Kroger, Meijer, Publix, Safeway, ShopRite and Walmart. The survey then asked consumers to rank those 10 top grocery retailers on a number of attributes such as low pricing, cleanliness, service, food quality, location and the checkout process. Results showed that consumers view Aldi as the affordable price leader, ranking it ahead of the other nine grocery chains.
On an index scale with the average score set at 100, Aldi received a 157, followed by “Every Day Low Price” retailer Walmart with a 129. Costco ranked third in the low-price category with an index score of 120.
But, as evidenced by the relatively close scores, consumers are not seeing the differentiation on price as clearly as the price leaders would hope.
Walmart ranked highest among respondents in offering a one-stop retailer for all their needs, although the chain significantly underscored the mean in providing high-quality meat, produce, organic products and courteous staff. Publix scored highest in offering an inviting atmosphere and environmental-friendly policies.
Some categories studied showed very little differentiation across the board, including convenient location, good private label brands and variety of merchandise.
Market Force’s study revealed that location is the main reason consumers shop where they do, but it wasn’t the only driving factor. Sixty-seven percent of consumers indicated that their grocer choice is primarily driven by its convenient location. Second on the list was price (57 percent), followed by good sales and promotions (52 percent). The availability of good private-label products was surprisingly high on the list (38 percent), revealing a growing opportunity for stores to differentiate. Trends also emerged around the food itself, with high-quality produce more important to shoppers than high-quality meat. A mere 5 percent were shown to prefer their primary grocer for its sustainable environment and green policies.
The good news for grocers is that the study showed the vast majority of consumers are satisfied with their grocery experience. When asked to think about their most recent grocery-shopping trip at their primary retailer, consumers were overall pleased, with 90 percent indicating they were somewhat or very satisfied. Conversely, only 10 percent of consumers said they were dissatisfied.
For the 10 percent of consumers who were not pleased with their most recent experience, long wait times drove the most discontent. The second most frequently cited reason was not being able to find a desired product. Quality clearly plays a role as well, with 19 percent unhappy with the quality of the retailer’s produce and 15 percent dissatisfied with their meat quality.
The study revealed that while 90 percent of consumers are satisfied with their recent grocery experiences, more than half (53 percent) would not rank their grocery retailer a 5 on a scale of 1-5. This exposes huge opportunity for grocery retailers to delight their customers, rather than merely satisfy them.
“Customer delight, not just satisfaction, drives a two-fold difference in recommendation ratings,” said Janet Eden-Harris, Market Force chief marketing officer. “When consumers are delighted with a grocery retailer, they are nearly guaranteed to recommend that grocery store to friends and family. Being simply satisfied means that consumers are far less likely to recommend. By creating experiences that delight consumers, grocery retailers can create brand advocates that will recommend their stores.”
Smaller grocers are often local consumer favorites. While they didn’t make it into the top 10 most-shopped grocers, Trader Joe’s and Wegmans have highly satisfied customers who are also highly likely to recommend the retailers to friends. Other national brands that score well on the delight scale include Aldi, Costco, Harris Teeter, Kroger, Publix and Target. Each of these companies delivers great experiences that create advocacy, according to the study.
Market Force Information Inc. is the leading global customer intelligence solutions company for business-to-consumer companies including major retailers, restaurants, grocery and convenience stores, financial institutions, entertainment studios and consumer packaged goods companies.