Study: Consumers Name Aldi Grocery Price Leader

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April 26, 2011

Limited assortment discount grocer Aldi, which carries a preponderance of private label products, is the low-price grocery leader, according to a new consumer study by Market Force Information

Nine other grocers topped the list when consumers were asked which retailers capture most of their grocery dollars. After Aldi, also mentioned were Costco, Giant Foods, H-E-B, Kroger, Meijer, Publix, Safeway, ShopRite and Walmart.

When asked to rank the 10 top grocery retailers based on a number of attributes such as low pricing, cleanliness, service, food quality, location and the checkout process, Aldi came out as the “affordable price leader.” On an index scale with the average score set at 100, Aldi received a 157, followed by Walmart with an index score of 129 and Costco with 120.

The relatively close scores, however, indicates consumers are not seeing the differentiation on price as clearly as the price leaders would hope, according to Market Force Information, based in boulder, Colo.

Although Walmart ranked highest among respondents in offering a one-stop option for all their needs, it scored below average on quality, particularly in meat, produce, organic products and courteous staff. Meanwhile Publix scored highest in offering an inviting atmosphere and environmental-friendly policies.

Private Label Importance Grows
In ranking order, the most important criteria for shoppers are convenient location, low prices, good sales and promotions, variety of merchandise and selection, cleanliness and good private labels, according to the study.

“The availability of good private-label products was surprisingly high on the list (38 percent), revealing a growing opportunity for stores to differentiate,” according to Market Force, which conducted the panel research in March with 6,100 participants. “Trends also emerged around the food itself, with high-quality produce more important to shoppers than high-quality meat.”

Customer Satisfaction
The vast majority of consumers are satisfied with their grocery experience with 90 percent indicating they were somewhat or very satisfied on their last shopping trip. Disappointingly, however, only 53 percent of these satisfied customers 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.”

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, the research found.
Other national grocers 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.

SBD Views: Several interesting data points in the research: The combination of perceived price leadership and high customer satisfaction foretell continued growth and penetration for Aldi; the rise of private label in consumer’s shopping criteria underscore the potential for continued growth of store brands share. -- John Failla for Store Brands Decisions

Read These Related Articles:

• Deloitte Research: Store Brands Are Here to Stay
• Store Brands Are Retailers' Second-Most Important Point of Difference
• Research: Consumer Frugality Persists in the Post-Recession
• Nielsen: Global Private Label Phenomenon is Here to Stay
• Research: The New Path to Purchase

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