Retail Customer Satisfaction Slumps in the USA

The American Customer Satisfaction Index (ACSI) has revealed a weakening or flat customer satisfaction in retail for the final quarter of 2014.

Customer satisfaction is down for the first time in four years, as all brick-and-mortar retail categories showed weakening or flat customer satisfaction in ACSI’s latest report. Internet retail was the only industry up from a year ago.

The age of the internet

Delivery problems caused by bad weather left many online shoppers disappointed last year, this time around retailers were better prepared and rebound 5.1 per cent to an ACSI score of 82.

Smaller companies and the online business of brick-and-mortar retailers were responsible for much of the improvement (+8% to 81), though Amazon remained on top (-2% to 86).

Department and discount stores flat

Department and discount stores stayed flat with an ACSI score of 77, while the gap between the best- and worst-ranked companies continued to grow. At the top, Nordstrom gained 4 per cent to 86, while Wal-Mart dropped 4 per cent to 68 to the bottom of the category.

Specialty retailers and supermarkets slump

Customer satisfaction with specialty retailers was down 1.3 per cent to an ACSI score of 79. Costco led the category with a score of 84. In its first year of ACSI coverage, L Brands (Victoria’s Secret, Bath & Body Works) came in second with an ACSI score of 83.

Among the home improvement chains, Lowe’s (81) was on top while Home Depot tumbled 4 per cent to near the category’s bottom at 76. Staples (79) was number one among office suppliers, Best Buy and GameStop were below average at 77, and clothing retailers TJX (TJ Maxx, Marshalls) and Gap (Gap brands, Banana Republic, Old Navy) scored 78 and 75, respectively.

Supermarket customer satisfaction was down 2.6 per cent to an ACSI score of 76. Rising food prices played a major role – increasing 3.4 percent last year whereas the Consumer Price Index went up just 0.8 percent.

Among the large supermarket chains, there was a shake-up at the top with Trader Joe’s and Wegmans both entering the ACSI at 85, tied for the lead. Wal-Mart’s grocery division dipped to an industry-low score of 71.

Smaller drug stores come out on top

Customer satisfaction with drug stores slipped 2.5 per cent to an ACSI score of 77. The big three chains (CVS Caremark, Walgreens, Rite Aid) lagged behind smaller drug stores, which topped the category with a combined score of 81.

The pharmacy services of the three largest supermarkets, which are included in the ACSI for the first time, have Kroger on top at 81, followed by Target at 78. As in other retail categories, Wal-Mart trails behind at 68.

Claes Fornell, ACSI Chairman and founder, said: "Although there are several signs that the economy might finally take off, deteriorating customer satisfaction with retail suggests that consumer demand will not be where it needs to be.

"This is also reaffirmed by weak sales for most retailers over the holiday season. Unless consumer spending picks up dramatically, we won’t see much – if any – increase in the pace of economic recovery."