Retail News Breaks
Index: Customer satisfaction up at drug stores
February 26th, 2013
ANN ARBOR, Mich. – Chain drug stores were among the retailers seeing more satisfied customers in 2012, according to a report by the American Customer Satisfaction Index (ACSI).
ACSI said Tuesday that its national benchmark, which measures customer satisfaction on a scale of 0 to 100, edged up 0.5% to 76.3 to close out 2012. The increase stems from strong public-sector gains and moderate customer satisfaction improvement for five of eight retail and e-commerce sectors, according to the report.
One of the sectors on the upside was drug stores. ACSI said customer satisfaction with health and personal care (drug) stores reversed a two-year slide with an increase of 1.3% in 2012. With an ACSI score of 77, drug stores are similar to supermarkets, department and discount stores, and specialty retail in terms of consumer satisfaction.
What's more, ACSI noted, chain drug retailers last year narrowed the gap with independent pharmacy operators, which typically have shown higher levels of customer satisfaction. In 2011, smaller drug stores held a seven- to nine-point advantage over the larger chains, but in 2012 a 4% drop to an index reading of 79 for small stores trimmed their lead to two points.
Among the large chains, Rite Aid earned the top position with a 3% improvement to 77 from 75 in 2011. Walgreens was next at 76 in 2012, up 1% from 75 in 2011, and CVS/pharmacy rose 3% to 75 in 2012 from a score of 73 in 2011, when the drug chain's index reading had hit an all-time low, ACSI said.
Food retailers, too, saw customer satisfaction rise in 2012 as the sector's ACSI benchmark came in at 77, up 1.3% from 2011.
ACSI said Publix's track record of leading customer satisfaction continued as the supermarket chain gained 2% to a score of 86. Whole Foods stood firm at 80 after four straight years of improvement. Kroger's customer satisfaction also was unchanged at 79, while Winn-Dixie jumped 4% to 78.
Supervalu, Safeway and Walmart posted scores in the mid- to low 70s for 2012, which ACSI said indicates that even in a difficult economy, low prices alone aren't enough to satisfy customers. Supervalu rose 3% to 76, and Safeway was flat at 75. Discounter Walmart saw a 4% gain to 72.
"Low price inflation for food products in 2012, combined with better service, product selection and store layouts, yields success in the form of enhanced customer satisfaction for supermarkets," stated ACSI founder Claes Fornell, author of "The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference."
Specialty retailers saw their ACSI reading dip 1.3% to 78, with warehouse clubs and office suppliers dominating the top and apparel retailers at the bottom. Costco's score of 83 in 2012 was unchanged from the year before, while Sam's Club's index was down 1% to 80.
Meanwhile, customer satisfaction at department and discount stores gained 1.3% to 77 in 2012. Among discounters, Target posted an ACSI score of 81, followed by Dollar General (unchanged at 78), Sears/Kmart (down 1% to 75) and Walmart (down 1.4% to 71).
"While quality trumps price with respect to customer satisfaction, pricing pressure remains a challenge for all retailers amid growing but continually weak consumer demand," noted Fornell. "Even the high-end department stores have resorted to more price promotions to boost sales, particularly during the 2012 holiday season."
Among the other retail sectors, customer satisfaction with online retail was up for the second year in a row, improving 1.2% to 82 in 2012, while online brokerage bounced back from a loss in 2011, up 2.6% to 78. The Internet travel sector saw its ACSI score fall 2.6% to 76 in 2012, the biggest loss among all retail categories. ACSI scores rose 2.2% for federal and 3% for local government services.
The American Customer Satisfaction Index, founded at the University of Michigan's Ross School of Business, is a national economic indicator of customer evaluations of the quality of products and services available to U.S. households. It uses data from interviews with about 70,000 customers annually 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.
"The improvement in overall customer satisfaction is positive news for consumer demand, but with the caveat that a good portion of the gain comes from federal and local government services," stated Fornell. "Looking at the economy as a whole, low inflation, shrinking household debt and pent-up consumer demand are starting to fuel consumer spending. At the same time, however, economic growth will be hampered by a still tepid job outlook, low wage increases, high gasoline prices and the economic uncertainty created by our politicians."
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