Major Manufacturers See Consumer Satisfaction Decline

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ANN ARBOR, Mich. -- Rising prices are hurting customer satisfaction with everyday household items, according to the latest results of the American Customer Satisfaction Index (ACSI). Customer satisfaction deteriorates across all categories of household nondurables, including food, soft drinks and beer, cleaning products, athletic shoes and apparel.

"It's never good news when customer satisfaction drops across the board," said Claes Fornell, ACSI chairman and founder. "Since most nondurables are repeat purchases, strong customer satisfaction is critical. When it weakens, consumers become more reluctant to buy, and brand loyalty suffers. As a result, demand weakens overall. Companies typically respond by offering deals and price discounts, which lead to increased brand switching, lower margins and more volatile revenue streams. This can further erode customer satisfaction as consumers eschew their favorite label for a discounted brand that then turns out to be less satisfactory."

High food prices, which have increased at more than twice the rate of the Consumer Price Index, are driving customer satisfaction with food manufacturers lower as the industry falls 2.5% to an ACSI score of 79 on a 100-point scale. Nearly all food companies register a drop in customer satisfaction, particularly the aggregate of smaller companies and store brands, which declines the most—down 4% to the bottom of the industry at 77.

With meat prices up sharply, food makers that emphasize meat products are posting lower customer satisfaction scores, including Hillshire Brands (-2%), ConAgra (-1%) and Tyson (-1%). The recent completion of the Tyson and Hillshire Brands merger brings together two of these lower-scoring meat processors.

Customer satisfaction with the largest cereal manufacturers is down as sales of breakfast cereal have fallen 5% over the past year. General Mills and PepsiCo's Quaker division each drop 2% to tie at 85, but Kellogg declines the furthest, tumbling 5% to 81.

Mars (+1% to 85) and Nestle (+2% to 85) are the only food companies to improve this year, but rival chocolate maker Hershey, unchanged at 86, maintains a slim lead over both. Perennial leader Heinz is long established at the top with an ACSI score of 87.

The shift in consumer preferences toward healthier beverages results in weaker customer satisfaction for soft drinks and the category slides 2.4% to 82, its lowest level since 2001. Dr Pepper Snapple plummets from the top with a 5% drop to 82, leaving Coca-Cola and PepsiCo tied for the lead at 83, although they decline as well. Smaller companies and store brands drop by 2% to a collective score of 80, which is the bottom of the category.

The large beer makers fare no better, as breweries fall 2.5% to an ACSI score of 79. Smaller breweries make gains in customer satisfaction, climbing 3% to lead the category with an aggregate score of 82, but the giants of brewing lag behind. Anheuser-Busch drops sharply, down 5% to 77, while MillerCoors hardly moves (-1% to 81). Over the past year, sales of craft beer surged 17%, while overall beer sales contracted 2%.

The American Customer Satisfaction Index (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 analyzing customer satisfaction with more than 230 companies in 43 industries and 10 economic sectors, as well as over 100 services, programs, and websites of federal government agencies.

Food Manufacturing ACSI Scores

Soft Drink ACSI Scores

Breweries ACSI Scores

Source: American Customer Satisfaction Index

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