The 1st Quartile and Their Strategies
1st Quartile Strategy Group 1: Quality Excellence
The top 5 retailers all have very strong Quality scores. Culver’s and The Habit joint the top 5 in this distinction, which is a big reason why these retailers appear in the top quartile overall.
Of course, they do other things well too that land them in the top quartile, but even if they did fall down on most other pillars, the strength of their Quality would likely be enough to land them in the 1st Quartile.
Some of the other retailers in the top quartile, by contrast, have average to below average Quality scores, lower than the typical 2nd Quartile retailer.
They rise to the top quartile for other reasons, which we’ll discuss next.
1st Quartile Strategy Group 2: Leading Convenience/Speed + Product Variety
Kwik Trip, Sheetz, Wawa, Casey’s and Dunkin’ Donuts all pair convenient locations, quick in-and-out experience with a variety of products that make them go-to’s for a variety of meal, snack and drink missions.
For Dunkin’ Donuts, this not only means that they lead the U.S. in the ability to convert customers to breakfast customers (76% of Dunkin’ customers visit it for breakfast, 14 pts higher than second place Starbucks), but they also land in the top 10 in coffee missions, snack missions and dessert missions. No other retailer combines a major meal occasion mission leadership with such a diverse range of secondary, non-meal mission leadership. This would only be possible if that variety was accessible, through quick and easy to get to locations.
The c-store/QSRs blends in this group yield a similar story: breakfast mission leadership + leadership in multiple secondary missions that make them a destination throughout the day. Snacks and coffee are also part of there mix, but they distinguish themselves from Dunkin’ and most other QSRs in being a leading destination for non-alcoholic beverage missions. With their packaged beverage collection, fountain machines and frozen, dispensed beverage selection, it’s hard for most QSRs to even come close to challenging them for this mission. SONIC is the only one that breaks up the c-store non-alcoholic beverage mission leadership party.
1st Tier Strategy Group 3: Strong Affordability + Steady Performance on Multiple Benefits
Chicken chains KFC and El Pollo Loco land in the 1st Quartile thanks to strong affordability combined with solid (but not stellar) quality and product variety. Other chicken chains in our rankings – like Wingstop, Popeye’s, Zaxby’s – may rival KFC and El Pollo Loco in one or multiple benefits pillars, but they all clearly lose to these leaders in affordability.
1st Quartile Strategy Group 4: Strong Quality, Product Variety + Highly Visible in Communities and Mindspaces
Buc-ee’s and Starbucks get strong quality and product variety marks, but their focus tends to be in different missions, so they seem like strange bedfellows in a strategy grouping. However, they are 1st and 2nd in the US respectively on being noticed by their customers to be part of social media conversations. They aren’t just necessarily highly visible through a great local community connection (Buc-ee’s) or physically being everywhere someone might turn in their local city (Starbucks), but they have both become leading fourth places – the fourth place being the mindspace occupied by social media reels and conversations. They are also both in the top 3 on private brand variety. Their branded food and drink products, combined with their branded merchandise, allow them to show up in peoples’ homes and neighborhoods.
On quality, their store atmosphere, bathroom cleanliness and staff all get top 10 rankings. Starbucks, despite some headlines in the news recently about store closings this year, still also remains a strong third place for its customers – which is an important reminder that these RPI rankings are a customer-first list and not industry pundit-first, based on customer feedback, with the perceptions that matter more in driving long-term retailer results given more weight in their RPI score.
Back to the mission’s point, these two retailers do have some things in common, enabled by their product variety. Starbucks is the leading coffee destination in our rankings, converting 80% of their customers to using Starbucks for coffee (yes, 1 in 5 Starbucks customers surprisingly don’t get their coffee there). Buc-ee’s, like other c-store/QSRs is also in the top 10 for coffee penetration among its customer base. Buc-ee’s and Starbucks are both in the top 10 for snack mission conversion. That is where the similarities, from a mission point-of-view, end.
Despite Starbucks landing in the top quartile based on the strength of their customer value proposition for the long-term, they will definitely face more headwinds than other QSRs when economic challenges hit their customers. Starbucks ranks last in the country on our Affordability pillar.
