Nordstrom, Trader Joe’s tops in customer satisfaction; overall index declines
Ann Arbor, Mich. - Customer satisfaction with retail is down for the first time in four years. According to a report by the American Customer Satisfaction Index (ACSI), all brick-and-mortar retail categories show weakening or flat customer satisfaction for the fourth quarter of 2014. Internet retail satisfaction, however, is up from the same quarter in 2013.
"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."
In the department and discount store category, consumer satisfaction 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% to 86, while Wal-Mart dropped 4% to 68, the bottom of the category. With its lowest level of customer satisfaction since 2007, Wal-Mart is now behind rivals such as Target (+4% to 80), Meijer (78), and Sears (-5% to 73).
Dillard's is stable in second place (81), while Kohl's dipped slightly (-1% to 80) and Macy's advanced 4% to 79. Nordstrom, Macy's and Target are the only stores to improve.
Customer satisfaction with specialty retailers is down 1.3% to a 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). Barnes & Noble (81), Bed Bath & Beyond (81) and PetSmart (80) all scored above the industry average.
In its first year of ACSI coverage, L Brands comes in second with a score of 83.
Among grocers, customer satisfaction fell 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 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.
Among the home improvement chains, Lowe's (81) tops Menards (78), while Home Depot tumbled 4% to near the category's bottom at 76. Like Target in 2013, Home Depot faced a high-profile credit card security breach in fall 2014.
Staples (79) is number one among office suppliers, and may soon be the only major player left in the field. Not long after Office Depot merged with OfficeMax, Staples is in the process of buying Office Depot (78). Best Buy and GameStop are below average at 77, while clothing retailers TJX (TJ Maxx, Marshalls) and Gap (Gap brands, Banana Republic, Old Navy) scored 78 and 75, respectively.
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.
Among the big three, Rite Aid leapt 5% to 78, while Walgreens inched up to meet the industry average and CVS Caremark dips slightly below that marker (-1% to 75). Rite Aid's gain occurs as the company beats the most recent stock analysts' revenue and earnings expectations.
Delivery problems caused by bad weather left many online shoppers disappointed in 2013, but customer satisfaction with internet retailers rebounded 5.1% to an ACSI score of 82, with smaller companies and the online business of brick-and-mortar retailers responsible for much of the improvement (+8% to 81). A majority of the pure-play Internet companies actually declined.
Nevertheless, Amazon remained 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%) and eBay (-1%) fell below the industry average to 77 and 79, respectively.