Walmart can't escape the customer-service doghouse
Walmart (WMT) has consistently earned a low opinion from consumers, but chief executive Doug McMillon has vowed to improve the retailer's standing with customers.
So how's that working out? Not great, at least not yet. The world's largest retailer slipped two points in the latest American Customer Satisfaction Index (ACSI), holding fast to its last-place ranking among department and discount stores.
Walmart also continued to rank dead last among the country's top supermarkets and health and personal care stores, according to the survey, which is based on interviews with more tan 9,000 customers in November and December.
That Walmart has had a tough year may be an understatement. Under pressure from labor activists and its own workforce, Walmart boosted its minimum wage to $10 an hour, crimping profits. A much-ballyhooed experiment into smaller-scale retailing ended with a fizzle when Walmart said in January that it would close its Walmart Express stores, as well as some supercenters and Neighborhood Markets. At the time, McMillon said the company was investing in appealing to customers of all income levels and "being great merchants."
However, that hasn't moved the needle, at least when gauged by the ACSI.
"Altering those perceptions are going to take time," said ACSI director David VanAmburg. "If you think about the general reputation of Walmart as perceived by shoppers that are surveyed by a study like the ACSI, it is not a perception that it's a great place to shop."
Walmart dropped two points to 66 points among department and discount stores. By comparison, the top-rated store in the category is Nordstrom (JWN), which earned 82 points. The category average is 74 points. Walmart said that its own surveys show that consumers are satisfied.
"We survey millions of customers throughout the year and receive great feedback on our efforts to deliver clean stores, fast checkouts and a friendly store environment," a Walmart spokeswoman said. "We continue to raise the bar in these areas so we can make the shopping experience even better for our customers."
Still, the entire department store category slipped 3 points from 77 a year ago, which VanAmburg said is likely due to consumers becoming more discerning about quality combined with retailers cutting back on discounts.
"It really kind of stems from a convergence of circumstances in the wake of the recession," he said. A few years ago, "consumers lowered their expectations" and workers were trying their best, which elevated satisfaction numbers.
He noted that Walmart's efforts to improve may eventually pay off.
Walmart wasn't the only retailer to suffer in the standings. Among supermarkets, Whole Foods (WFM) slipped 8 points, from 81 points a year earlier to 73 this year. Known for its high prices, Whole Foods executives have vowed to increase discounts and win back customers, but other research has indicated that consumers aren't noticing lower prices.
"There was an effort to be more competitive on pricing, but that seems not be working," VanAmburg said. "Other retailers are getting on the organic bandwagon, and consumers are finding that products they used to buy at Whole Foods they can find at other stores and often cheaper. It's making Whole Foods less attractive."
The top-rated supermarket, by comparison, is privately held Wegmans, which earned an 86 rating, or 1 point higher than a year earlier. Trader Joe's was runner up, with 83 points, or 2 points below its rating a year earlier.
Here's 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 (82)
2. Dillard's (80)
3. Fred Meyer (79)
4. All others (79)
5. Belk (77)
6. Kohl's (77)
7. Dollar Tree (76)
8. Meijer (76)
9. Target (75)
10. Dollar General (74)
11. J.C. Penney (74)
12. Ross (74)
13. Macy's (73)
14. Sears (71)
15. Walmart (66)