OPERATIONS

Study: Trader Joe’s and Publix tops among grocery chains

BY Marianne Wilson

Boulder, Colo. — Trader Joe’s is North America’s favorite grocery store based on customer satisfaction, according to a new study of 6,600 consumers conducted by Market Force Information. Publix Super Markets and Whole Foods Market rounded out the top three. All three received high marks for courteous staff, inviting atmosphere and high-quality produce. Hy-Vee also scored well on those measures.

Publix was tops among shoppers for its cleanliness and courteous staff, and second to Trader Joe’s in atmosphere. Hy-Vee and H-E-B also fared consistently well in key categories.

Market Force’s grocery retailer study was designed to uncover where consumers prefer to shop, as well as why they favor one grocer to another, among other factors. When asked to rate their satisfaction with their most recent grocery store experience and their likelihood to refer that grocer, consumers scored Trader Joe’s above all others.

Publix, Whole Foods, Wegmans and Aldi also ranked high on the customer delight index, which reveals the intersection between overall satisfaction and the likelihood of recommending a grocer to friends/family. In other findings:

  • Both Trader Joe’s and Publix performed well in the operational excellence attributes, with Trader Joe’s ranking first for its atmosphere and quick checkout process, and second in the other three categories.
  • When it comes to consumers’ perceptions of high-quality, healthy product selection, natural-food grocer Whole Foods dominated across the board. It was tops among shoppers in every category studied – from high-quality meat and produce to organic options and sustainable practices. It had an especially sizeable lead in the produce category.
  • Market Force also looked at which grocery stores consumers frequent the most, asking where they had spent the majority of their money in the previous 30 days. In the Northeast, Stop & Shop claimed the top spot, garnering 11% of the votes. Giant came in second with 6%, and Wegmans and Market Basket tied for third with 5%.
  • In the South, Kroger ranked first with 16%, followed by Publix with 15% and H-E-B with 5%.
  • Kroger again led the pack in the Midwest also, with 11%. Meijer ranked second with 9% and Hy-Vee took the third spot with 8%.
  • In the West, Safeway led by a wide margin with 12%, Kroger earned 9% and Costco received 7%.
  • Loblaws dominated Canada, with 15%, while Sobeys took second with 11%. Costco and Safeway tied for third at 7%.

Convenient location is the factor that consumers said they like most about their preferred grocery store – in fact, it ranked higher than prices, which was second on the list, while sales & promotions was third. However, these characteristics aren’t necessarily helping grocery chains earn more business. When Market Force drilled deeper to see how the grocers fared in these areas, no one brand dominated the votes across these important characteristics, suggesting that they’re table-stake attributes that consumers have come to expect from their grocers. It was the operations-focused attributes that seem to make a bigger difference.

“With most consumers satisfied with their grocery-shopping experiences, it makes for a very competitive playing field for grocers looking to distinguish themselves from the masses,” said Janet Eden-Harris, chief marketing officer for Market Force. “We start to see the greatest opportunities for differentiation in operations-related attributes such as fast check-outs, gracious staff and atmosphere.”

The survey was conducted in May 2013 across the United States and Canada. The pool of 6,645 respondents reflected a broad spectrum of income levels, with 60% reporting household incomes of more than $50,000 a year. Respondents’ ages ranged from 19 to over 65.

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OPERATIONS

Starbucks entering yogurt business in deal with Dannon

BY Marianne Wilson

Seattle — Starbucks Coffee Company is entering the yogurt business. The company announced it has entered into a strategic agreement with the makers of Dannon to offer a jointly created and developed selection of specialty yogurt products in participating Starbucks stores and in grocery channels.

The line, branded as Evolution Fresh, Inspired by Dannon, will feature ready-to-eat Parfait Greek yogurt products co-created by Starbucks and Danone for exclusive distribution in the U.S. Starbucks will offer the products through its stores in spring 2014, and Danone (makers of Dannon) in grocery channels in 2015.

Distribution is planned to be extended to include targeted markets around the world in a second phase that builds upon the success of the U.S. initiative.

“Starbucks is committed to evolving and enhancing our customer experience with innovative and wholesome food offerings. Today’s announcement underscores this commitment through the transformation of our existing yogurt offerings and our multi-year agreement with Danone,” said Howard Schultz, Starbucks chairman, president and CEO.

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iPhone sales still strong, but tablets tumble and profits decline

BY CSA STAFF

Sales of 31.2 million iPhones and 14.6 million iPads during third quarter ended June 29 enabled Apple to generate sales of $35.3 billion, but lower prices led to gross margin contraction and a nearly $2 billion decline in profits.

Apple’s quarterly revenue was essentially flat with the prior year while net income of $6.9 billion, or $7.47 a share, was well below the prior year’s profit total of $8.8 billion or $9.32 a share. Gross margins also declined to 36.9% from 42.8%.
Sales of the venerable iPhone totaled 31.2 million units in the quarter, well above last year’s 26 million, while iPad sales declined to 14.6 million units from 17 million units. Sales of Mac computers also declined to 3.8 million from 4 million last year.

“We are especially proud of our record June quarter iPhone sales of more than 31 million and the strong growth in revenue from iTunes, Software and Services,” said Tim Cook, Apple’s CEO. “We are really excited about the upcoming releases of iOS 7 and OS X Mavericks, and we are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014.”

The company said it generated $7.8 billion in cash flow from operations during the quarter returned $18.8 billion in cash to shareholders through dividends and share repurchases. In conjunction with the release of its results Apple announced a $3.05 a share dividend.

During the current third quarter, Applie is expecting sales to range from $34 billion to $37 billion with gross margins holding steady in the 36% to 37% range.

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