Amazon (AMZN) - Get Amazon.com, Inc. Report cleaned up in every aisle: A recent survey found that the Seattle online-retail giant was the top U.S. grocery retailer in 2021, as the Covid-19 pandemic continued to overhaul the way consumers shop.
This was the second year in a row that Amazon nailed down the No. 1 spot, according to the fifth annual Dunnhumby Retailer Preference Index, a nationwide study of the roughly $1 trillion U.S. grocery market.
H-E-B, the San Antonio chain, came in second, while Market Basket bounded over three retailers to take third place, nudging out Trader Joe's, which fell to seventh.
Wegmans held onto the fourth spot for a second year in a row.
Amazon Fresh, the retailer's grocery delivery service subsidiary, shifted its shopping cart into high gear and blasted by past 55 other retailers to land in the fifth spot.
Aldi of Germany was No. 6.
Sam's Club, the warehouse chain owned by retail giant Walmart (WMT) - Get Walmart Inc. Report, came in at number 8, followed by Costco (COST) - Get Costco Wholesale Corporation Report at No. 9 and Walmart Neighborhood Market, the retailer's fleet of smaller-format stores, holding the 10th spot.
Pandemic Drove Changes in Consumer Behavior
"The pandemic has massively accelerated changes in how customers buy their groceries, and their behaviors are continuing to evolve,” said Grant Steadman, president of North America for Dunnhumby, said in a statement.
“2021 was the year that grocery retail became truly omnichannel. Retailers who delivered on their customers evolving needs in-store and online performed best."
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This was mostly the larger players, Steadman added, who used their advantages to consolidate their positions.
"The challenges for most other retailers are significant, but a number of midsize grocers gained momentum by understanding their customers better and differentiating their offering accordingly," he said.
Price First. Then Digital Delivery and Quality.
The pandemic shifted the center of gravity for consumer needs, the report said.
Price and quality are no longer head and shoulders above all the others on the consumer preference shopping list in nailing down long-term sales growth and an emotional connection with shoppers.
Price now owns the top spot, while digital sits even with quality for the first time and is near price in its weight in driving retailer success.
"Digital is king in driving momentum as Amazon has demonstrated over the last two years by being ranked as the top U.S. grocery retailer," the report said.
Digital’s share of total grocery sales more than doubled during the pandemic, to about 10% of sales from roughly 5%.
Digital share has held steady since 2020, the report said, and will likely hold in 2022.
"This is different from last fall, when consumers anticipated giving a third of their e-commerce sales back to brick and mortar," the report said.
During the pandemic, retailers who drove improvements in the areas of speed and digital tended to have the best year-over-year short-term momentum, especially if they already had advantages in these areas, according to the study.
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