business news in context, analysis with attitude

We had a story the other day about how customer data expert dunnhumby, out with its second annual Retailer Preference Index (RPI), rated Trader Joe’s once again as the nation’s top grocery retailer.

The grocery retailers with the highest overall consumer preference index scores are: 1) Trader Joe’s, 2) Costco Wholesale, 3) Amazon, 4) H-E-B, 5) Wegmans Food Markets, 6) Market Basket, 7) Sam’s Club, 8) Sprouts Farmers Markets, 9) WinCo Foods, 10) Walmart, 11) Aldi, 12) Peapod, 13) The Fresh Market.

I commented:

I’m willing to accept the dunnhumby analysis, though I’m not quite buying its conclusions … mostly because I’m always skeptical about “nation’s best grocery store” studies.

They’re just not fair, since not everybody has access to the same stores, and supermarkets can be so different in style and purpose - with entirely differentiated customer bases - that comparing them is kind of silly.

I mean, I’m not sure that Wegmans and WinCo belong on the same list - they operate in different parts of the country, have vastly different strategies and tactics, and appeal to entirely different people.

I also think it is a mistake to limit such studies only to “large” companies, since it often is smaller, independent stores that foster the strongest consumer emotional sentiments. Is Trader Joe’s a terrific store? Sure. For what it is. But would I feel a stronger emotional connection to it than to a Dorothy Lane Market or a Lunds & Byerlys or a Metropolitan Market or a Westborn Market or a bunch of other grocers I could name, if I could shop at any or all of them?

I think not.

One MNB reader responded:

Wegmans vs. Winco, should they be in the same list, yes they should, as they are both on the top list of retailers that shoppers like for a reason. Wegmans have beautiful stores that have perimeter departments that make for a superior shopping experience. Their stores are clean, well stocked, and are always an exciting place to shop. I was in my first Wegmans 2 years ago, and I know why they always score so high on dunnhumby. Their food court was outstanding.

Winco is on the list for a different reason, clean stores, great prices, usually 15-20% lower than their mainstream grocery competitors. The stores are stocked full everyday, out of stocks are non- existent, clean and bright stores, friendly employees. The Winco shopper knows that they are really saving real net dollars.

Both of these chains are on the Top 10 list for different reasons, but the dunnhumby results have spoken.

I’m just arguing that the comparisons of two stores with very different value propositions are not all that relevant … not that either of these companies aren’t terrific.

Another MNB reader wrote:

I agree completely with your assessment of the shortcomings of this study.  7000 shoppers is a sample size that is incredibly small to make these statements.  I also would guess that they had no survey respondents in markets where stores you mentioned (like Lunds and Byerly’s) are present.  I really find it interesting that dunnhumby’s key historical client, Kroger (now serviced by 84.51) is not present, nor is dunnhumby’s current client, Whole Foods, on the list.  Makes you wonder why, especially if I’m an executive at Whole Foods, where I know I have an extremely loyal customer base.  Somehow the math on this doesn’t seem to add up.

And from another:

I used to work for one of the large regional grocers and exclusively shopped there. Unfortunately, that is no longer the case, with Trader Joe’s grabbing the majority of my grocery dollars.

I buy ALL of my wine at Trader Joes (great selection, advice and pricing). Categories that I regularly shop at Trader Joe’s include nuts/dried fruits, cheese, lemons/limes, flowers, sandwich bread, condiments, oil, vinegar, chips & crackers, spices, greek yogurt, frozen fruit, and increasingly produce. Organic carrots are $.89. They have beautiful haricots vests. You can’t beat their pricing and it is a FAST friendly shop. If you can survive the parking lot it’s a great in-store experience.

I am increasingly frustrated with my former grocery store, from underwhelming meat to ridiculous out of stocks. Last evening my husband went there shopping at 7 pm. Rotisserie chickens were on sale. There was not one to be had and this is a common experience. The seafood department was packed up and closed for the night. And this was at a store in the chain’s headquarter state that regularly was number 1 or 2 in average weekly sales.

We also have a Whole Foods near Trader Joe’s and I may soon be defecting to them for the rest of my shopping.

Regarding the possibility that California could ban paper receipts, MNB reader Matthew Pazdziorko wrote:

I’m normally OK with legislation that saves the supply budget and helps the environment, but I wonder, personally, if the receipt ban would be the way to go.

As a consumer, I’m probably not “normal” as I use receipts to keep a register of my transactions for the month. Beyond that practicality, I do think that receipts still have value in the current economy. Buying clothes, larger ticket items (think Ryobi drills at Home Depot), gift cards and gifts in general all need receipts for smooth transactions. Warranties, gift returns, exchanges, researching double payments, and refunds are pretty common retail transactions that use receipts. Not to mention expense reports - think of the clunkiness of compiling an expense report without a sloppy stack of receipts. Working day in and day out in grocery (which really doesn’t have many big ticket items), I can easily say that I see more customers request a receipt when a cashier forgets to hand them one, than say “no thank you" - no competition.

California isn’t afraid of slapping warning labels on everything - my morning bagels have a Prop 65 warning. If this is about stopping the spread of chemicals - label it. Legislate a change. If this is about the environment - start a campaign that encourages consumers to say no to receipts.

If the legislation is mirroring a trend, then the legislation is pointless. As a retailer, I truly believe this is a solution in search of a problem.

MNB reader Mike Starkey wrote:

While it may feel like an “only in California” sort of discussion, in this case, legislation is ahead of the customer demand.  Most folks in the retail industry would welcome the move from a paper receipts to e-receipts for many reasons.  I previously worked for a company who offered these services along with the ability to drive personalized content to the shoppers including a personal repository for the consolidated households.  Our testing proved the technology could support the robust requirements of retail grocery, deliver on the promise of a personalized experience only to find the shopper interaction was lukewarm at best.
Reminded me of my Catalina days with CECS, electronic coupon clearing for FSI’s for retailers.  We were ahead of the demand curve and the business closed down, but the technology could definitely support the initiative.  For me, the e-receipts solution is a good one, however, IMHO, shopper education and value need development in order to achieve success.

From MNB reader Cody Thornhill:

I think it is a little premature and out of touch to assume "most customers" are in sync with getting electronic receipts. You seem to be projecting your experiences on the masses and that just simply isn't the case. Like most laws that originate in the Bay area they pay no mind to the way normal people live throughout the rest of the state. Will we be required to enter our email every single time we buy something from every single store we visit just to get a proof of purchase? That seems to be counter intuitive for the fast pace lifestyles we are told we live. Am I too foresee the possibility that I may need to return something in the future and make sure I request a receipt each time I make a purchase? Is there going to be a massive database filled with customers emails and card numbers that'll be easy to breach? What happens the first time someone goes to return a product they aren't happy with at their local grocery store and they do not have a receipt because they weren't given one? This law would put 12$/hr clerks in an awkward situation.

This is just another example of "feel good legislature" that doesn't actually accomplish anything other than adding burden on businesses and consumers and giving California lawmakers something to pat themselves on the back for. You said yourself "I'm not sure how much paper and chemicals it'll save, but some is better than none." That is not how you legislate. Laws should be well thought out and proven to be productive before they are forced on the people. Results matter.

And from another:

I’d like to see how much ink and paper is produced in one day’s CVS receipts! I always feel as if I’m getting a tree’s worth—not to mention the time it takes to print them when there are folks in line behind me. I go online and choose the ones I want yet they are compelled to give me reams that I throw away. A big yes vote from me if it includes CVS.

MNB reader Jackie Lembke wrote:

When asked, I decline on receiving a paper receipt. If I feel I need it, I can ask for it to be sent to me. Most of my receipts go in the trash can or shredder.
I don’t have an issue with this.

We wrote yesterday about how the US Supreme Court has agreed to hear a case that pits the Food Marketing Institute (FMI) against the Argus Leader, a Gannett-owned South Dakota newspaper that has argued that it - and, by extension, its readers - have a right to know how much federal food stamp money goes to the nation’s retailers.

The Argus Leader sued to get the information, denied to it by the federal government, back in 2011; FMI argued that to make that information public would be to give away proprietary competitive information that could hurt its member retailers.

I commented:

As a taxpayer, I think I’d like to know which retailers are the greatest beneficiaries of the food stamp system … and, quite frankly, I’d kind of like to know what the retailers and their trade association would rather not be a matter of public record.

Nobody would be surprised if Walmart is a major beneficiary. But what if we found out that, say, Whole Foods was? That was would be interesting … and not exactly worth keeping a secret.

I always get twitchy when this kind of transparency is resisted.

MNB reader Jon Townsend responded:

Couldn't agree with you more. Last time I checked, tax dollars went into the SNAP program, I would like to know where it is going from there.
KC's View: