SCDigest editorial staff

The University of Michigan has released its latest rankings of customer satisfaction for the retail industry, as part of its on-going American Customer Satisfaction Index (ACSI).

Consistent with other recent ACSI results (perceptions of retailers are surveyed the fourth quarter of each calendar year), Publix received the top score among grocers, Kohl’s among department stores and mass merchants, and Costco among specialty stores.

The ACSI is produced by the Stephen M. Ross Business School at the University of Michigan, in partnership with the American Society for Quality (ASQ) and the international consulting firm, CFI Group. The index score for each company is based on a maximum value of 100. ACSI uses customer interviews as input to a “cause-and-effect model,” and combines measures for key drivers of satisfaction (customer expectations, perceived quality, and perceived value) and outcomes of satisfaction (customer complaints and customer loyalty, including retention and price tolerance) in developing the score.

In the Q4 2005 retail index, results were as follows:

Supermarkets:

Publix – 81

SuperValu – 77

All others - 77

Kroger’s – 74

Group average - 74

Winn-Dixie – 73

Albertson’s – 71

Safeway- 71

Wal-Mart - 70

Department and discount stores:

Kohl's - 80

J.C. Penney - 78

Target - 78

All Others -  77

Dillard's – 76

Group average - 75

Army and Air Force Exchange Service (AAFES) - 74

Federated Department Stores/May - 74

Sears, Roebuck - 73

Wal-Mart - 72

Kmart - 70

Specialty retailers:

Costco Wholesale – 79

Lowe’s – 78

Sam’s Club – 76

Group average - 74

All others – 73

Best Buy – 71

Circuit City Stores – 70

Home Depot – 67

While many pundits have in the past tied retail customer satisfaction to performance of the supply chain, in terms of enabling lower prices and maximizing in-stock positions, it’s hard to see a lot of evidence of that in these results. Wal-Mart, with its often-praised supply chain, for example, scored low in both of the sectors in which its core retail stores were measured.  Publix, on the other hand, which has led the ACSI in the grocery sector since its inception, has scored relatively low in the annual Cannondale survey of supply chain management among major food and drug retailers (based on manufacturer surveys).

Supply chain is certainly a factor in the end, and we’ll note the ACSI satisfaction results and actual sales and profit performance certainly may not be in synch. A shopper may not be thrilled with the Wal-Mart store experience – but keeps going back to take advantage of the prices.

Do the ACSI results surprise you at all? What role do you think supply chain really has on retail customer satisfaction – and how in synch is that satisfaction with actual consumer spend? Let us know your thoughts.

Article key words: Retail industry, customer satisfaction