ANN ARBOR, Mich. --Gas stations appear to be a bright spot for retail in terms of customer satisfaction, amid continuing declines for other retail channels.
Two years removed from an all-time high, customer satisfaction with the retail sector has fallen for a second consecutive year, according to fourth-quarter data from the American Customer Satisfaction Index (ACSI). It shows a slide of 2.6% to 74.8 on a 100-point scale.
Despite the decline for 2015, the overall score for retail stands almost exactly at its long-term average. But among the six retail categories covered by the ACSI--department and discount stores, gas stations, drug stores, specialty retail stores, supermarkets and online retail--all drop but one: gas stations.
Due to the lower cost of fuel, customers are more satisfied. Gas prices are down 9% in December from the previous year and customer satisfaction for gas stations jumps 2.7% to 75.
“Customer satisfaction with retail has been higher than its historical norm over the past few years as the economy slowly emerged from the Great Recession,” said Claes Fornell, ACSI founder and chairman. “This was because it was a tough environment to compete in. Job security for customer service personnel was hard to come by and everybody was trying harder to please customers. As both job security and employee turnover have increased, the level of customer service seems to have worsened.”
An examination of historical ACSI results for retail shows that the sector earned its best marks for customer satisfaction as the economy emerged from the Great Recession. During this period of recovery from 2009 to 2014, companies had to compete for a smaller pie of consumer dollars with discounts, incentives and better customer service. High unemployment made for a very competitive job market, which kept retail employees motivated to provide good customer service lest they be replaced. At the same time, customers may have been more forgiving. The convergence of these factors contributed to higher customer satisfaction.
But as recovery settles in and economic conditions start to look more optimistic, that honeymoon is over and the recent declines in retail customer satisfaction begin to look more like an adjustment rather than a tailspin.
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Among brick-and-mortar retailers, drug stores see the steepest ACSI decline in 2015 and tie supermarkets at the low end of the sector. The index does not look at convenience stores.
- Department & Discount Stores. Customer satisfaction ebbs nearly 4% for department and discount stores, and the industry continues to trail specialty retail overall. Among dollar stores, Dollar Tree (76) edges out Dollar General (74).
Customers of department and discount stores give the industry its highest mark for convenience of locations and hours (84). Customers are pleased with sales and promotions (80), as well as variety and selection of merchandise (79), although Internet retailers are able to provide a much better selection (benchmark of 84). Store layout and cleanliness shows room for improvement (75), but the speed of the checkout process is by far the low point for the industry (70).
- Supermarkets. After several years of relatively high customer satisfaction, supermarkets registered their lowest score in more than a decade, dropping 3.9% to 73.
Wegmans, one of three retailers to improve customer satisfaction, gained 1% to 86 and becomes one of the highest-scoring companies in the index. Other top-scoring supermarkets include Trader Joe’s (83), H-E-B (82) and Publix (82). Giant Eagle and Wal-Mart at 67 find themselves at the opposite end of the scale. Albertsons, which recently merged with Safeway, rounded out the bottom three at 68.
“When consumers put a premium on service and quality, smaller companies often achieve higher customer satisfaction scores, and it’s the smaller independent chains that continue to set the bar for supermarkets,” said ACSI managing director David VanAmburg.
The biggest loser in customer satisfaction among supermarkets is Target. It plummets 12% to 71, followed by Whole Foods, which dives 10% to 73.
According to customers, the supermarket experience has eroded across nearly every element compared with a year ago. The customer service areas that have suffered the most are staff courtesy and helpfulness (down 6% to 77) and quality of pharmacy services (down 5% to 76). These are also the weakest areas for grocers, along with checkout speed (72) and call centers (78). Store locations and hours remain very convenient (85) and merchandise selection is well regarded, especially in terms of brand names (81) and variety (80).
- Specialty Retail. Customer satisfaction with specialty retail stores declines 2.5% to an ACSI score of 77. Despite the drop, overall satisfaction remains higher than pre-recovery levels. Costco maintains its perch at the top with a score of 81. Costco competitors BJ’s Wholesale Club and Sam’s Club are significantly behind, each scoring 76.
- Drug Stores. Health and personal care stores suffer a steeper decline in customer satisfaction than any other retail category, shedding 5.2% to a record low of 73. Wal-Mart’s drug stores are at the bottom with 68 and the company scores last in every retail category covered by the ACSI. Walgreens, the largest drug store retailer, falls 4% to 74. Ride Aid plunges 12% to 69, tied with Safeway’s in-store pharmacies.
Kroger at 81 and Target’s in-store pharmacy business at 80 lead for customer satisfaction among pharmacies. CVS has recently acquired Target’s drug store operations. Given CVS’s much lower customer satisfaction (71), it will be interesting to see if the merger will help CVS more than it will hurt the Target.
For drug stores, the biggest decline occurs for a critical area: pharmacy services (down 8%). While the quality of pharmacy operations for drug stores (81) still beats that of supermarkets (76), the gap between the two narrows in 2015. Consumers are happy with drug store cleanliness and layout (80), but merchandise selection (77) still lags supermarkets. As with other brick-and-mortar categories, the checkout process (75) could be faster. Consumers would also like more promotions and sales (75).
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