Murky Attributes Impact Grocer Rankings

By Jim Prevor, Editor-in-Chief, Produce Business

The thing about research is that getting the answers from consumers is just the start. Understanding what consumers actually mean is a whole separate challenge.

It is not surprising to learn that produce can be a big differentiator for stores. Obviously, branded grocery products are identical from store to store, so that whittles the big product differentiators down to private label grocery offerings with a distinctive flavor, quality or value propositions, and perishables.

This tends to go just below the big four — location, price, cleanliness, and assortment — as reasons for consumers to select one store over another.

Once one gets past these fundamentals, things get murky, fast. So in this study, we learn that “high-quality produce” is one of the Top 10 attributes that impact a consumer’s ranking of a grocer. One can just imagine a vice president of produce, having been given this research and being anxious to utilize this information to conquer his marketing area.

The thing to understand about this research is it doesn’t actually compare store to store. So although Publix is ranked No. 1 for offering the highest quality produce with 58 percent and H-E-B is No. 2 with 56 percent, this does not mean that consumers judged Publix to have better produce than H-E-B. It means that of those who are familiar with Publix, 58 percent think it offers the highest quality produce compared to other options these consumers are familiar with. Most of these people never stepped into an H-E-B.

Equally, the “overall favorite grocer” is an odd measure. Three of the five top-rated chains are not traditional grocery stores at all: Trader Joe’s, Costco and Aldi. They are somewhat unique. Trader Joe’s really has no competition in its class of stores, and Aldi only has minimal concept competition in the U.S. Costco has just two competitors, and BJ’s is quite regional. One wonders if consumers don’t compare “like to like” and these chains win because they are dominant in their categories. It would be interesting to see if comparable people who rate, say, Costco as their “favorite grocer” actually shop less at supermarkets than other consumers. There is cause for doubt. It may reflect a nomenclature issue.

Similarly, the interest in local is not surprising. It has been stoked by countless articles and retailers’ own marketing. But the research doesn’t tell us the actual impact on sales of local. Other research indicates that consumers like local for specific reasons: They believe it will be fresher because they think it will come to the market quicker; it will be riper because they believe it will be picked later; it will be cheaper because they believe that the transportation is less.

There has never been a study, however, indicating that if these expectations are frustrated, mass-market consumers will still choose local to solely support the local economy or maintain open space. In other words, “local” can be thought of as a brand with brand attributes. But if the local item is not fresher, has inferior taste and costs more than an alternative, the professed consumer interest in local may not translate to consumer purchase.

The fact that people sometimes purchase organic is not surprising. In a fair number of supermarkets today, lower volume SKUs are only available in organic versions. These items don’t merit two slots in a warehouse or double facing inexpensive refrigerated cases. Retailers stock the organic version so they can satisfy organic stalwarts while having the product available for everyone. In other cases, the organic premium is small or non-existent, and organic may also function as a kind of brand for a healthier alternative.

We also have an indication that some parents are very sensitive regarding young children and seek organic products to feed them; sometimes the whole family rides along. But this research indicates the organic demand may not be built on a strong foundation. The study says that consumers buy organic for better nutritional value (although there is very thin evidence of this), better quality, (although it is unclear in what sense organic offers better quality) and absence of GMOs. Yet if current labeling initiatives pass, then a non-GMO product that is not organic would be identified as less expensive than organic.

The research also shows that GMOs are very much a niche concern. Only 13 percent of consumers are familiar with the issue, and of those, almost a third have no concerns.

The research on farmers markets is interesting but raises many questions as well. Most notably this: If 19 percent of consumers were buying more than half their produce from farmers markets, with almost three-quarters of consumers buying some produce from farmers markets, then sales through conventional channels would collapse. They have not. So, either the claim is aspirational — people say they are doing what they wish they would or think they should — or going to farmers markets drives up consumption or purchases at a farmer’s market are of a tourist nature and don’t really impact conventional channels.

In any case, the issue of quality is not determined by any of these things or by an objective standard. Publix and H-E-B have high-quality produce because they have the produce their customers want to buy. That is a marketing lesson that stands regardless of what any given research report may say.