Nordstrom, Trader Joe's tops in customer satisfaction

Customer satisfaction with retail is on the decline for the first time in four years, according to a report by the American Customer Satisfaction Index (ACSI).

The report says brick-and-mortar retail show weakening or flat customer satisfaction, while Internet retail is up from a year ago.

"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," said Claes Fornell, ACSI chairman and founder. "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."

By category, overall satisfaction with department and discount stores stayed flat at 77, while the gap between the best- and worst-ranked companies continues to grow. At the top, Nordstrom gained 4% to 86, followed by Dillard's (81), Kohl's (-1% to 80) and Macy's (79). Walmart dropped 4% to 68 to the bottom of the category. Walmart is now behind Target (+4% to 80), Meijer (78), and Sears (-5% to 73).

Among grocers, customer satisfaction is down 2.6% to an ACSI score of 76. Rising food prices played a major role -– increasing 3.4% last year whereas the Consumer Price Index went up just 0.8%. At the top, Trader Joe's and Wegmans both entered the ACSI list at 85, tied for the lead. They supplanted perennial No. 1 Publix, which dropped 5% to tie ACSI newcomer H-E-B at 82. Whole Foods, Target's grocery division, and ALDI all come in at 81.

Customer satisfaction with specialty retailers is down 1.3% to an ACSI score of 79. Costco leads the category with a score of 84, beating BJ's Wholesale Club (81), Sam's Club (80), and Big Lots (77).

Among the home improvement chains, Lowe's (81) tops Menards (78), while Home Depot tumbles 4% to near the category's bottom at 76. Staples (79) is No. 1 among office suppliers, and may soon be the only major player left in the field. Customer satisfaction with drug stores slipped 2.5% to an ACSI score of 77. The big three chains (CVS Caremark, Walgreens, Rite Aid) lag behind smaller drug stores, which top the category with a combined score of 81.

On the e-commerce side, Amazon remains on top (-2% to 86), easily outdistancing Newegg (-2% to 81) and Netflix (+3% to 81). This marks the third straight year of improvement for Netflix. Meanwhile, Overstock (-3%) eBay (-1%) fall below industry average to 77 and 79, respectively.

Founded at the University of Michigan’s Ross School of Business, the ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The ACSI uses data from interviews with roughly 70,000 customers annually as inputs to an econometric model for measuring satisfaction with more than 230 companies in 47 industries and 10 economic sectors, as well as over 100 services, programs, and websites of federal government agencies.