Costco Tops Dunnhumby’s Canadian Grocery Retailer Preference Index

Costco Secures Top Spot in dunnhumby’s Canadian Grocery Retailer Preference Index

dunnhumby, a global leader in customer data science, has announced Costco as the top-ranking grocery retailer in Canada according to its Retailer Preference Index (RPI). The RPI is a comprehensive study that evaluates the Canadian grocery market by combining financial performance with customer perceptions to identify grocers poised for long-term success. Following Costco in the rankings are Super C (2), Maxi (3), and Walmart (4). Notably, the top-performing retailers are predominantly club, discount, and superstore banners, while conventional grocers represent the second and third tiers of the index.

Shifts in Consumer Behavior

The study highlights how inflation has reshaped Canadian grocery shopping habits. Retailers in the top tier of the RPI have experienced the strongest grocery revenue growth over the past five years and have secured a significant edge in market share. Grocers with well-defined customer value propositions grew up to 1.5 times faster over the long term and three times faster in the past year than lower-ranked competitors.

Chris Thomson, Senior Vice President of dunnhumby for Canada and the U.S., noted:
“The impact of customers’ behavioral shifts due to inflation is clear across the Canadian market. To thrive in the coming year, retailers must align their value propositions with the evolving needs of their customers. Change brings opportunity, and grocers who adapt to these shifts will emerge stronger.”

Key Findings from the Study

  1. Price, Promotions, and Rewards Drive Success:
    • The top factor for long-term success is helping customers save money through competitive pricing, promotions, and rewards programs, which account for 44% of overall success. Quality ranks second at 31%, followed by digital (11%), speed and convenience (8%), and operational excellence (6%).
  2. Regional Differences in Value Drivers:
    • In Ontario, 48% of a retailer’s long-term success is tied to price, promotions, and rewards, while this factor accounts for 35% in Atlantic Canada.
  3. Costco’s Winning Strategy:
    • Costco excels across four of the five pillars, including ranking first for operational efficiency. The retailer is becoming increasingly accessible through third-party delivery services like Uber Eats and Instacart and is expanding its Home Meal Replacement (HMR) offerings, solidifying its position as a go-to grocery option.
  4. Targeted Value Propositions Yield Results:
    • Retailers such as Food Basics thrive by excelling in specific areas like mass promotions and pricing. However, those that perform well across multiple value levers see the greatest overall success.
  5. Personalized Loyalty Programs as a Differentiator:
    • Conventional grocers are leveraging loyalty programs to stay competitive. For example, Loblaw’s PC Optimum program drives personalization and promotional relevance, while Save-On-Foods’ More Rewards program positions it as the leading conventional grocer in British Columbia and the Prairies.
  6. Digital Innovation at Walmart and Amazon’s Growing Influence:
    • Walmart leads in digital convenience with a user-friendly app and website, saving customers time. Meanwhile, Amazon continues to disrupt the market, with 30% of Canadian shoppers purchasing groceries through the platform.

Supporting Retailers to Capitalize on Change

The Canadian RPI is designed to help grocers navigate market shifts by aligning their strategies with customer needs. Thomson explained:
“The RPI has been a critical tool for U.S. retailers for the past eight years, helping them sharpen their value propositions. The Canadian RPI offers similar opportunities for grocers here to adapt and innovate, ensuring they meet changing customer expectations head-on.”

Methodology

The RPI combines financial performance data with insights from 6,000 Canadian grocery shoppers. It evaluates 28 grocery banners that collectively account for 97% of the market, using five key drivers:

  1. Price, promotions, and rewards
  2. Quality
  3. Digital
  4. Speed and convenience
  5. Operations

Retailers can download the full RPI report or contact dunnhumby for individual banner profiles. The company will also be showcasing its insights at NRF 2025 in booth #6305.

About dunnhumby

dunnhumby is a global leader in customer data science, empowering businesses to thrive in the modern data-driven economy. With expertise rooted in retail, dunnhumby helps businesses grow by putting customers first. Through its Customer Data Science Platform, the company delivers transformative insights, enabling iconic brands such as Tesco, Coca-Cola, and Procter & Gamble to create exceptional customer experiences across in-store, offline, and online channels.

With over 2,500 experts worldwide, dunnhumby continues to lead the way in helping businesses adapt to dynamic consumer needs.

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