Investing

This Is America's Worst Retailer

Douglas A. McIntyre

Published: March 28, 2021 8:57 am

Among the tools consumers have when they shop for a range of things from cars to drugs to groceries is an abundance of customer satisfaction research. The internet allows people to search these endlessly as they make buying decisions. Part of this research cottage industry is a widely used rating of retailers, regardless of what they sell. It comes from a research firm that recently launched its grades for over 50 retailers. One store chain consistently placed at the bottom.

The American Customer Satisfaction Index surveys 500,000 people a year to collect data on over 400 companies in 47 industries. It describes itself as the “only national cross-industry measure of customer satisfaction in the United States.”

Recently it issued its “Retail and Consumer Shipping Report 2020-2021.” This looked at eight categories–department & discount stores, specialty retail stores, health & personal care stores, supermarkets, internet retailers, gas stations, consumer shipping, and the U.S. Postal Service. Very few retailers appeared in two categories. Walmart, because of its size and scope, appeared in three. In each case, its customer satisfaction score took a beating.

The first category Walmart appears in is “Department & Discount Stores”. The average score among the retailers on the list was 75. Walmart scored 71. At the top, Costco scored 81. The authors of the report wrote: “For Walmart, service quality remains a serious issue. The company rates worst in class for both staff courtesy and checkout speed by wide margins.”

Next, Walmart appeared in the “Supermarket” category. The average score in the segment was 76. Walmart scored 71, which put it at the bottom again. The top retailer in the category was Trader Joe’s at 84. The research comment:

Walmart has occupied last place every year save one—when it beat Albertsons by just a point. Consistent with its performance in other brick-and-mortar retail categories, Walmart’s service quality rates worst in class in the supermarket industry.

Finally, Walmart appears in the “Internet Retail” category where the average score was 78. Walmart’s score was 73, next to the last place, and just about bankrupt Sears with its score of 72. Nordstrom topped the list at 81.

The fascinating part of the ACSI study is that Walmart continues to be America’s largest retailer by far. U.S. revenue last year was $370 billion, up 8.5% from the year earlier. And Walmart has become a huge force in e-commerce. In its earnings report, management commented: “Walmart U.S. eCommerce sales increased 69% with strong results across all channels.”

What is the takeaway from the ACSI numbers and Walmart’s scores? Apparently, poor customer service does not drive customers away.

Click here to read This Is How Many People Work For Walmart In Every State And What They Are Paid