Consumers seem satisfied. When will they spend again?

Articles
February 17, 2009

Consumers seem satisfied. When will they spend again?

Americans may be stingier buyers today, but it’s not because they blame retailers for their tight-money plight. Findings of the fourth-quarter 2008 American Customer Satisfaction Index showed a 1.3% rise for the retail sector to 75.2 on a 100-point scale. Indeed, despite the 6.6% rise in food prices last year, customer satisfaction with grocery stores in aggregate held steady at 76.0, unchanged from the same quarter a year ago. Publix topped the list at 82.0 for the 15th straight year. Safeway grew by 4.0% to reach 75.0, its highest level since 2002, and that figure matched the satisfaction score of Whole Foods. These gains occurred while people voted less for price leader Walmart. The mega-chain’s satisfaction score fell by 4.0% to 68.0 to hold down last place in the retail food sector, the same finish five years running. So went the ACSI measures produced by the University of Michigan’s Ross School of Business, in partnership with the American Society for Quality and CFI Group, at a time when consumers and retailers struggled mightily to contain their essential resources.

Americans may be stingier buyers today, but it’s not because they blame retailers for their tight-money plight.  Findings of the fourth-quarter 2008 American Customer Satisfaction Index showed a 1.3% rise for the retail sector to 75.2 on a 100-point scale.

Indeed, despite the 6.6% rise in food prices last year, customer satisfaction with grocery stores in aggregate held steady at 76.0, unchanged from the same quarter a year ago.  Publix topped the list at 82.0 for the 15th straight year.  Safeway grew by 4.0% to reach 75.0, its highest level since 2002, and that figure matched the satisfaction score of Whole Foods.

These gains occurred while people voted less for price leader Walmart. The mega-chain’s satisfaction score fell by 4.0% to 68.0 to hold down last place in the retail food sector, the same finish five years running.

So went the ACSI measures produced by the University of Michigan’s Ross School of Business, in partnership with the American Society for Quality and CFI Group, at a time when consumers and retailers struggled mightily to contain their essential resources. 

“Supermarkets appear to have been able to absorb [food and beverage] price increases…by improving the quality of the shopping experience through redesigned stores, better variety of merchandise, and longer hours,” said Professor Claes Fornell, head of the ACSI and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference.

On a broader scale, he noted, “For consumer spending to rebound, two conditions must be met: consumers must be favorably disposed to spend and have the means to spend. The good news from ACSI is the first condition has been met: customer satisfaction is looking up.  But it remains to be seen to what extent the government stimulus plan will help translate stronger satisfaction into increased consumer demand.”

As long as the (cash and credit) means to spend condition” is wanting, the power of ASCI alone to predict consumer spending will be diluted. It doesn’t mean, however, that customer satisfaction becomes less important in recessions. On the contrary, it takes on an extra dimension,” he added. “As the stimulus package begins to take effect, it will be very important to monitor…customer satisfaction as an indicator of the quality of economic output….”