Costco is Canada’s top grocery retailer

Forty-four percent of a grocery retailer’s long-term success is based on their price, promotions, and rewards proposition, according to the study.

Club, discount and superstore banners are tops with Canadian consumers when it comes to grocery shopping.

Costco Wholesale Corp. came out on top in the Dunnhumby Retailer Preference Index, a nationwide study of the Canadian grocery market that combines retailers financial results with customer perceptions to rank grocers for long-term success. It was followed by Super C, Maxi and Walmart. 

All retailers in the index’s top group are club, discount and superstore banners. Conventional grocers, comprising almost 40% of the Canadian market, represent the second and third groups.

Costco’s success is due to its powerful performance across four out of the five customer value proposition pillars, including ranking first for operations nationally, Dunnhumby noted. (The five drivers of the proposition are: 1) price, promotions, and rewards; 2) quality; 3) digital; 4) speed and convenience; and 5) operations.)

[READ MORE: Costco Q1 income beats Street, e-commerce sales surge 13%; to open 26 new clubs]

In addition, Costco is moving towards becoming an everyday retailer for customers as it becomes more accessible to customers through third-party delivery channels (Uber Eats and Instacart) and as it increases its presence in home meal replacement (HMR) categories.

In other findings, Walmart wins on digital, but Amazon is a business that all retailers should be watching carefully as three out of 10 Canadian customers shop Amazon for groceries. Walmart ranked first on digital across all regions, saving customers time through their easy-to-use app and website.

The top tercile retailers grew grocery revenue the most over the past five years and have built a competitive edge in overall market share. Retailers with clear and strong customer value propositions — indicated by higher RPI rankings — grew up to 1.5 times faster over the long-term and three times faster in the past year than retailers with lower RPI rankings.