Download Report

Thank you! Your copy of the report opened in a new tab. If you have trouble viewing it,click here.

Your personal information is kept in accordance with our Privacy Notice.



customers' overall price perceptions for each banner drive this pillar. Price has been the dominant driver of long-term preference in the grocery industry. Over the past three years, the importance of Price was marginally declining as the economy strengthened but was still the most important driver in 2019. During 2020, however, Price was less important as consumers looked to get in-and-out as quickly as possible and scrambled to simply find items in-stock.

Price perceptions are also correlated with how far shoppers will travel and how emotionally connected they are to the store. Simply put, shoppers will travel longer distances for better prices and are more likely to be satisfied with retailers with strong price perception. Additionally, Price perception is much more likely to be positively impacted by better base prices than by relevant discounts and promotions.

So, how has Covid changed the competitive dynamic? As mentioned above, the Price is the top driver in explaining long-term performance in previous reports, but for driving short-term financial performance during the Covid Era alone, Price dropped behind Speed, Digital, and Discounts, Rewards & Information. This shift in customer needs aligns nicely with traditional banners, who have historically done well on Speed and Discounts, Rewards & Information, but poorly on Price. This also helps explain why traditional banners like Food Lion, Albertson's and Winn Dixie performed well in 2020, while powerhouse banners like Walmart, Costco and Trader Joe's have stumbled a bit.

Also, in a year of rapidly growing prices and the chaos resulting from the virus, we saw traditional banners improve their Price perception scores more than any other channel. We don't expect that traditional retailers did anything much different, but we hypothesize that their Speed and Safety scores helped to create a Price perception halo and that customers felt EDLP competition had less reliable and consistent pricing than they typically had. More relative value was delivered by traditional banners and that translated in improved Price perception for many shoppers. However, we expect Price perception across banners to return to their pre-Covid levels once the dust settles in the back half of 2021 and 2022. The two tables on the right highlight the gains made by traditional grocers with regards to Price perception. The first table below shows the First Quartile banners for Price. Only four of the fourteen banners are traditional banners, and they include Market Basket, H-E-B, ShopRite and Fareway. The remaining ten banners fall into mass, warehouse, or discount channels which is consistent with the three previous RPI studies. However, when we look at the notable gainers in the second table, all those jumping more than five ranks are traditional banners. Although Price was less important this year, these gains by traditional banners also helps to explain why they did so well in 2020.

We also expect that, long-term in a post-Covid world where supply chains are back to normal and pricing signals are once again clear, Price will be the dominant driver for choosing a preferred retailer. This could also be amplified if the much of the country experiences economic struggles and government stimulus is delayed or non-existent. The structural damage to the economy is still not fully understood and the more damage that occurs during the virus, the longer it will take for the economy to fully bounce back.

Price and Covid: Voice of the customer

"I only buy where I can pick up groceries without leaving my car, but I must purchase minimum $35. If I only need a carton of milk, I just have to wait until I need 5 or 6 cartons, or enough other things to add up. I almost always end up spending too much."

Photo by Alex Motoc on Unsplash

Last March, when we realized the potential impact that COVID-19 might have on all aspects of our lives, dunnhumby launched a survey to understand how the virus would affect consumers food shopping habits. It was designed to help our clients better meet the needs of their Customers by seeing the impact of the virus through their customers eyes.

Little did we know at the time that one year later we would still be dealing with the impact Covid-19. This study presents the results of the sixth global wave of the study and the seventh wave for the United States. Other waves were conducted in March, April, May, July, September and November of 2020. This wave was conducted in February 2021.

Keep Reading...Show less
Download report

Retail leaders must objectively understand how their business currently considers Customers before trying to set a more Customer-centric direction and focus. There are some formal assessment methodologies, like dunnhumby's Retail Preference Index (RPI) and Customer Centricity Assessment (CCA), which offer detailed evaluations of a business' capabilities, strengths and weaknesses based on Customer perceptions (RPI) or global best practices (CCA).

The approach outlined below is not intended to replace these formal tools; rather, these observations are intended as a kind of 'toe in the water' to help retail leaders form early hypotheses and points of views. These are rules of thumb, heuristics culled from global experience. Later, leaders might use these observations to informally check progress from time to time as a way of assessing whether the "program in the stores matches the program in our heads".

Keep Reading...Show less

In order to reflect on how the grocery world changed in 2020, we have changed how we calculate our overall Grocery RPI score. Given the historically unique metrics we've witnessed in the economy, the restaurant industry and the grocery industry, along with the rare influence a global pandemic has brought to consumer behavior, we're viewing grocery success in 2020 through a different lens than we viewed grocery success in prior years.

View Full Report

In the first episode of Customer First Radio, Dave Clements, Global Head of Retail for dunnhumbyand David Ciancio, Global Head of Grocery for dunnhumby kick off the series by discussing what it means to be a truly Customer First business, share which retailers and brands today embody a Customer First mindset, and examine how Customer First materialized during the pandemic with retailers.

black and silver headphones on black and silver microphone
Photo by Will Francis on Unsplash

The 2021 Retailer Preference Index: Who's winning and why. David Ciancio, Global Head of Grocery discusses the 2021 U.S Retailer Preference Index (RPI): Grocery Edition with the lead author of the RPI, Erich Kahner. They unveil key insights and discuss who is winning and who is best positioned for the future.

dunnhumby’s Prophets of Aisle Six, Episode 2: Heinen's Fine Foods

The Prophets of Aisle Six is the first online reality series focusing on innovation in the food retail industry. In this episode, Jose Gomes, dunnhumby's North America Managing Director, travels to the downtown Cleveland store of Heinen's Fine Foods. Jose meets with Tom and Jeff Heinen, co-owners and brothers, and learns how they are evolving their grandfather's mission of delivering excellent customer service. With 23 stores in Northeast Ohio and the greater Chicago area, and a 90-year legacy, Heinen's is proving that being a small retailer can be an advantage when it comes to data.

In this series, dunnhumby tours the globe and speaks with some of the world's greatest brands, exploring their biggest challenges and how they are using customer data science to meet those challenges.