Walmart (WMT), the country's biggest retailer, is now the most hated place for Americans to shop.
The retailing behemoth dropped several ratings points in the American Customer Satisfaction Index, an independent national benchmark of consumer experiences of products and services sold to U.S. consumers. After a tough year that included inroads from rivals and weaker sales, the retailer landed at the bottom of several of the survey's rankings, making it the worst-rated department, discount and grocery store.
For Walmart, the dip in its customer satisfaction ratings could spell more trouble ahead. Retailers, after all, are at the whim of the consumer, who is typically looking for a mix of good prices, selection and customer service. If a retailer starts to fail on those fronts, it can end up in what ACSI director David VanAmburg calls "a deadly cycle." On top of that, Walmart's well-publicized struggles with calls from employees for higher pay and benefits may be taking a toll.
"They are not as dominant on the price side as they were, and the quality still isn't there," VanAmburg told CBS Moneywatch. "They haven't stepped up their game on that side, so we are seeing a lot of dissatisfaction by comparison."
Walmart, meanwhile, has been criticized by activists and employees for its low wages, which have prompted embarrassing episodes such as company stores holding food drives for their own workers. It doesn't look very good for the nation's biggest private employer when its workers have to rely on handouts and government aid to make ends meet.
Conversely, the top-rated speciality retail store, Costco (COST), has benefited from a few trends, including its relatively high pay for retail workers and access to benefits, with Bloomberg BusinessWeek calling it the "happiest company in the world."
"Employee satisfaction is key in retail to a great shopping experience," VanAmburg said. "One does tend to have an impact on the other in a significant way. Look at companies that have consistently been at the top, like Nordstrom (JWN), Costco, Publix and Wegmans. They are all companies that consistently show up as great places to work. If employees are well treated, they are more likely to provide good customer service."
Responding to the survey, Walmart said it is taking steps to strengthen customer service, pointing to comments from CEO Douglas McMillon. At an investment community meeting last fall, McMillon said the company would "do a better job serving customers."
Some of the company's recent moves to improve the shopping experience include adding more workers at registers during the holiday shopping season and promising to pay customers the difference if a rival offers the same product at a lower price.
Walmart has a long way to go until it can catch up with rivals, however. Walmart received a customer satisfaction score of 68, compared with 86 for the top-rated department and discount store, Nordstrom. One of Walmart's chief rivals, Target (TGT), earned 80 points, representing a 3-point gain from 2013.
"Companies like Walmart might be too big to fail, but smaller retailers can get caught up in a vicious cycle," VanAmburg said. "Customers are less happy, so that leads to less foot traffic. The company cuts costs and downsizes front-office personnel, and satisfaction falls even lower. It can go on and on."
Below is a list of the ACSI's ratings for discount and department stores, ranked from top to bottom, with their customer-service scores in parentheses.
1. Nordstrom (86)
2. Dillard's (81)
3. Kohl's (80)
4. Target (80)
5. Dollar Tree (79)
6. Macy's (79)
7. Meijer (78)
8. J.C. Penney (77)
9. Dollar General (75)
10. Family Dollar (75)
11. Sears (73)
12. Exchange (68)
13. Walmart (68)
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