Special Report
America's Most Hated Companies
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Today’s rapid and near-ubiquitous dissemination of news and information means corporations, too, can be more vulnerable to public opinion. For many companies, recovering from a bad reputation can seem impossible. For others, though, a poor reputation seems to have little to no impact on the bottom line.
24/7 Wall St. reviewed a range of information, including customer survey results from the American Consumer Satisfaction Index (ACSI), employee reviews on Glassdoor, company stock price, and financial information. These are America’s most hated companies.
It is usually very difficult for a company to fully separate itself from the perception and reputation of its industry — particularly when that reputation is a poor one. It should not be surprising that companies on this list include an airline, a bank, both a cable and satellite service provider, and two retailers, all industries with some of the worst reputations.
Click here to see the most hated companies in America.
While these are much-maligned industries, and it might be suspected that vitriol towards these companies is due to the reputation of their industries to a certain extent, it is worth noting, however, that these companies have managed to compare unfavorably even against their industry. Spirit Airlines, for example, received a score of just 54 out of 100 on the ACSI, 17 points below the already low-ranked airline industry. This was by far the most a single company underperformed compared to its industry.
Arguably, some of these companies have negative reputations among their customers and employees because they lack the competition that might push them to change their practices. Cable and TV service providers such as Dish and Comcast operate in markets with little to no alternative. Wal-Mart is sometimes the only low-cost option in rural, impoverished parts of the country.
We also chose many of these companies because they generate outrage not just from the American public and employees, but from their investors as well. Whether through poor decisions or circumstance, the majority of these companies have either been struggling for years, or recent events — as in the case of Volkswagen and Chipotle — have hurt their bottom line and long-term prospects. In nearly every case, the companies’ share price fell significantly in the last 12 months.
It may be no coincidence that customer satisfaction is extremely poor at many of these struggling companies. 24/7 Wall St. spoke to Scott Dobroski, community expert at Glassdoor, a site that allows employees to rate their employment experience. Dobroski explained, “At highly-rated companies, employees are excited to come to work. When they know where the company is headed, when they feel their senior leaders are being transparent with them, and when they feel they have career opportunities, these are some of the factors that often motivate them to do better work.” He added that the opposite may be true for some of these companies.
Due largely to the enormous success of e-commerce companies such as Amazon.com, the retail industry has become one of the most competitive industries in the U.S. economy. Some companies have struggled to keep up, while others have maintained their positions. Regardless, some retailers have poor reputations. Wal-Mart, for example, has managed to constantly grow and increase profitability despite its poor reputation. Sears, on the other hand, has been largely unable to overcome poor consumer confidence — just one of numerous challenges.
To identify the most hated companies in America, 24/7 Wall St. reviewed a variety of metrics on customer service, employee satisfaction, and financial performance. We considered consumer surveys from a number of sources, including the American Customer Satisfaction Index (ACSI) and a Zogby Analytics poll created in partnership with 24/7 Wall St. We also reviewed employee satisfaction based on worker opinion scores on Glassdoor — this is not a Glassdoor commissioned report. Finally, we reviewed management decisions and company policies that hurt a company’s public perception.
1. Volkswagen
Arguably no company had a greater fall from grace in 2015 than Volkswagen. In September, U.S. regulators said the company’s diesel cars were emitting much more pollutants than the manufacturer claimed. The German automaker, it seems, had installed in some 11 million cars worldwide a device that could deceive emissions tests. CEO Martin Winterkorn resigned later that month, saying, “Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen Group.”
The fallout for Volkswagen was predictably disastrous. It was just in July that the company had made headlines for surpassing Toyota as the world’s largest automaker. But only a month after the emission scandal news broke, Toyota reclaimed the title. In the fourth quarter, while the auto industry as a whole reported record sales figures, VW’s U.S. sales fell by 11.3%. The company has been heavily supporting U.S. dealerships this year in order to help boost flagging domestic sales. In addition to declining sales, the U.S. Justice Department sued the automaker in January, with total penalties estimated to potentially exceed $19 billion. There are also reports the company is considering buying back as many as 50,000 of the vehicles containing the illegal software.
2. Spirit Airlines (NASDAQ: SAVE)
Many of the country’s largest airlines have struggled for more than a decade, especially with poor customer service. However — perhaps due to the many mergers — customer satisfaction overall has improved in recent years. Still, the reputation of at least one major company, Spirit, has remained truly abysmal. The company received a score of 54, tied for the third worst score of any company measured by the ACSI. The low-cost, no-frills airline has unabashedly cut corners as a means of offering low fares. Some of Spirit’s more irksome policies, such as high baggage fees and costly refreshments, may alienate passengers and lower demand.
It is unclear whether the company’s reputation for shoddy service and hidden fees was a factor in January’s sudden departure of the company’s CEO, Ben Baldanza. Baldanza was the architect of the company’s cost-cutting “bare fare” policies, and was viewed as an innovator while the company was on the rise. The airline grew from obscurity to become a significant competitor with the major airlines. However, as major airlines have begun to compete with the company on price, Spirit’s fortunes quickly reversed. Shares of Spirit plummeted 45% in the last 12 months.
3. Dish Network (NASDAQ: DISH)
While several of the companies on this list made it here because of recent events that changed public perceptions, Dish has long had a poor reputation for customer service and employee treatment. This is the company’s third straight year on this list. Dish also ranked as the seventh worst major company to work for in the United States based on a recent 24/7 Wall St. analysis. Dish’s 2.6 out of 5 score in Glassdoor’s employee reviews is one of the worst of any major company. Also, just 40% of company reviewers on Glassdoor said they would recommend employment at the satellite television company to a friend. Similarly, just 41% expressed approval of CEO and co-founder Charlie Ergen. Among customers responding to a poll conducted in partnership between 24/7 Wall St. and Zogby Analytics, more than 20% said they had a poor customer service experience with Dish, the fourth worst share among the more than 100 companies included in the survey.
Increased competition from on-demand streaming services such as Netflix has hurt satellite TV companies. However, while Dish’s main competitor, DirecTV, has managed to improve in some areas, Dish has not been able to increase its subscriber base of roughly 14 million substantially. Shares of the company dropped 25% in the past 12 months.
4. Wal-Mart (NYSE: WMT)
While a poor reputation can damage a company’s bottom line, this has not been the case with Wal-Mart. The global superstore is by far the largest company by revenue in the United States as well as one of the most profitable ones. The company reported worldwide revenue of $485.7 billion and profit of $16.8 billion in its fiscal 2015, each up from the previous year. Wal-Mart is also by far the nation’s largest private sector employer. One of the reasons for the retailer’s infamy — its low wages — may actually explain its financial success. A recent study by advocacy group Americans for Tax Fairness estimated that due to the high share of Wal-Mart workers who rely on food stamps, the federal government is effectively subsidizing Wal-Mart to the tune of $6.2 billion.
Despite announcing it would raise its minimum wage to $10 an hour for its U.S. employees by February 2017, the increase will be insufficient for many of its workers. This is because many workers also struggle with insufficient hours — another tactic the company employs to keep workers off its full-time payroll.
5. Sprint (NYSE: S)
Sprint consistently ranks far below its competitors in data, network speed, network reliability, and overall performance, according to RootMetrics’ analysis of wireless service providers. Sprint was also fined $68 million by the FCC earlier this year for fraudulently charging customers for text messaging services they did not ask for or want. The majority of the exacted fine will be used to reimburse the customers the company misled. The charges landed Sprint a spot on Consumer Reports’ annual Naughty List for non-consumer friendly customer policies — one of 13 companies to make the list. These examples of substandard service and deceitful business practices may explain Sprint’s low customer satisfaction rating. In a Zogby survey commissioned by 24/7 Wall St., slightly more than one-fifth of respondents rated their experience with the wireless communications company as poor, the third highest share of any of the more than 100 companies in the survey.
Previously the third largest wireless carrier, Sprint was knocked to fourth place by T-Mobile last year. The company also disappointed shareholders in 2015. From the first day of trading to the last, Sprint shares fell by 16.6%, the worst performer among major competitors AT&T and Verizon.
6. Bank of America (NYSE: BAC)
The banking industry’s reputation was hard hit in the wake of the financial crisis, and Americans have remained somewhat mistrustful of banks — although, recently, confidence has increased moderately, according to Gallup. Still, Bank of America in particular fares poorly in the eyes of banking customers. Approximately one in every four customers rates Bank of America’s customer service poorly, the worst among companies surveyed by Zogby. The company received an ACSI score of just 68 in 2015, significantly worse than the banking industry, which received a 76 overall. Bank of America’s stock price, however, is up over the last 12 months, unlike every other company on this list.
Bank of America’s status as one of the nation’s largest companies — with 47 million U.S. customers — could also explain its poor reputation as big businesses that have many transactions and interact with customers face to face often receive poor ratings. Still, the residual effect of the financial crisis and the sale of defective mortgages directly by the bank is likely still responsible for its lingering negative image.
7. Comcast (NASDAQ: CMCSA)
Comcast, the largest cable service provider in the United States, is tied for the third lowest score of any company on the ACSI. Overall, poor customer service seems to be common in the industry. Partially due to a lack of competition, subscription television service has the lowest ACSI score of any industry. Still, being part of a poorly-rated industry is not an excuse, and Comcast rates nine points worse than the industry. A Freedom of Information Act filing of FCC data revealed that the company received nearly three times the number of complaints of any other Internet service providers through the first 10 months of 2015, and almost double that of all Internet service providers combined.
Through 2014 and 2015, Comcast attempted to acquire giant Time Warner Cable, a merger that would have further reduced competition in the industry. Customers were not happy about the prospects. Comcast dropped its acquisition plans after the Department of Justice said it would file an antitrust lawsuit to the challenge the deal.
8. SeaWorld (NYSE: SEAS)
The 2013 film “Blackfish” brought widespread public scrutiny to the morality of SeaWorld’s operations. Since the film’s release, the company’s woes have snowballed. Park attendance is down as total admissions revenue declined from $921 million in fiscal 2013 to $859 million in fiscal 2014. Company stockholders are also feeling the pain. Since the company’s IPO, the same year “Blackfish” was released, SeaWorld’s share price went from $27 to less than $19 a share.
In another blow to the company’s bottom line and public relations, three whales died in the last six months of 2015 in SeaWorld’s San Antonio, Texas location. While killer whales in the wild typically live 30-50 years, the most recent killer whale to die at SeaWorld did not even live to 19. Though many attribute the orca’s early death to stress brought on by life in captivity, SeaWorld claims such allegation are unsubstantiated. In a likely attempt to polish its tarnished image, the company announced that it will end the killer whale show in its San Diego location in 2016.
9. Sears Holdings Corporation (NASDAQ: SHLD)
With unsatisfied customers and employees along with rapidly declining sales, Sears’s old slogan — “Where America Shops” — is far less accurate today. Like with Wal-Mart and other major department stores, Sears’s low-paid workers are unsatisfied with their employer and protests have cropped up throughout the country. The average employee review of Sears on Glassdoor is just 2.6 out of 5, one of the lowest of any major company.
In addition to the retail stores of the same name, Sears Holdings Corporation also owns Kmart, another major retail company with abysmal customer service ratings and dissatisfied employees. In a Zogby and 24/7 Wall St.’s customer service poll, Kmart had one of the highest shares of shoppers who said they had a poor experience with the company.
Unlike Wal-Mart, however, Sears has not been able to leverage its cheap labor into profit. Major retailers in general are losing ground to online giant Amazon.com and other online stores, but few are losing as much as Sears. The company announced in January it would be closing both Sears and Kmart locations across the country. Each store chain has lost money for the holding company, and Sears Holding reported net losses of $927 million in 2013 and $1.5 billion in 2014. Today, Sears stock is worth about half of what it was worth a year ago.
10. Chipotle (NYSE: CMG)
Another company that has experienced a surprising turn of events is Chipotle. The restaurant, which has promoted its focus on food quality, now finds itself fighting a rising tide of evidence that it did not meet its own standards on safety. Serious foodborne illness outbreaks in 2015 were linked — in multiple incidents — to Chipotle locations across the country. These include a tomato-borne salmonella outbreak that sickened 64 people throughout Minnesota, and separate outbreaks of the norovirus in California and Boston, each afflicting dozens of patrons.
In addition, an E. coli outbreak has sickened more than 50 people in 12 states. The company faces several lawsuits, including one class action lawsuit brought on by investors, which claims the company made false statement about its safety standards following the outbreaks. The Food and Drug Administration’s Office of Criminal Investigations has also launched a formal probe into the California norovirus incident, and the U.S. District Court for the Central District of California has subpoenaed the company as well. Same-store sales in Chipotle locations in the fourth quarter fell by nearly 15%, and shares of the company plunged by more than 40% in the past 12 months.
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