Grocery stores mostly make news for their digital or robotic innovations: apps, delivery, self-driving cars. But the results of an annual survey show that, for the second year in a row, America’s favorite grocery store is one of its lowest-tech: Trader Joe’s. Dunhumby’s annual Retailer Preference Index [PDF] surveys 7,000 American households to ask about their preferences, and combines that with companies’ financial performance to rank supermarkets. Trader Joe’s once again came in at the top spot, precisely because its lack of digital shopping and relatively small store size allow it to focus on what its shoppers like best: inexpensive store-brand products.
“With its small format, lack of digital shopping and limited national brand offering, the retailer focuses on speed of in-store shopping and having a rich private brand offering. This bricks and mortar only, private brand approach minimizes costs and keeps prices low,” the report notes.
Trader Joe’s presents an interesting case study, because its set-up ignores certain categories that traditional grocery stores focus on. For example, Dunhumby’s analysts note that TJ’s lacks the variety of non-food items that larger, traditional supermarkets have. But because TJ’s isn’t trying to sell candles and small appliances and 20 types of paper towels, “this loss is also their gain, since it allows them to be excellent at what matters most to their customers.” As any Trader Joe’s shopper knows, what matters is Cookie Butter and Mandarin Orange Chicken.
Other stores that ranked highly on the Retailer Preference Index were Costco, Amazon, H-E-B, and Wegmans. They all scored well in terms of the top two most important factors to shoppers: prices that are perceived as lower than the competition, and quality of items and service. None, however, sell Joe-Joes.