Customer satisfaction with retailers is at an all-time high. However, while the industry improved overall, according to the American Consumer Satisfaction Index (ACSI), not all retailers received high marks. At the positive end of the spectrum, while traditional brick-and-mortar retailers set a record, e-commerce scored better still. At the negative end, traditional retailers received the most negative assessments.
Despite a positive multiyear trend, many traditional retailers’ scores remain average at best — especially those that are struggling to keep up with growing online rivals. 24/7 Wall St. reviewed the ACSI data to find the companies with the worst satisfaction scores in retail.
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These are the nine retailers with the worst customer service.
9. Walgreen > Customer satisfaction score: 76 > 12-month revenue: $70.79 billion > One-yr. share price change: 22.42% > Industry: Health and personal care stores
Walgreen Co. (NYSE: WAG) is the operator of drugstore Walgreens and one of the nation’s largest companies. As of December 2012, the company had more than 8,500 locations. But its wide reach has not helped the company appeal to consumers. In 2012 Walgreen received an ACSI score of just 76. However, not all measures of customer satisfaction were as negative for the company. A 2012 poll from MSN Money and JZ Analytics showed that more than 30% of customers thought the company’s service was “excellent,” while another 49.4% described service there as “good.” Whether customer service was actually any good, the company was struggling to attract consumers. Sales at stores open at least a year declined 2% in the most recent quarter, while revenue for the company declined 4.6% and earnings declined 25.5%.
8. TJX Companies > Customer satisfaction score: 76 > 12-month revenue: $25.88 billion > One-yr. share price change: 20.18% > Industry: Specialty retail stores
The TJX Companies Inc. (NYSE: TJX), which owns discount retail stores T.J. Maxx, Marshalls and HomeGoods, has underperformed the specialty retail store sector’s ACSI score in five of the past six years. According to the MSN Money/JZ Analytics 2012 Customer Service Survey, less than 18% of consumers described service at the company’s T.J. Maxx chain as “excellent” — among the lowest of all businesses surveyed. But mediocre reviews did not hurt the company’s bottom line. Sales at The TJX Companies were up 12% in the most recent year from the year before, while net income for the retailer rose from $1.5 billion in the previous year to $1.9 billion in 2012.
7. The Gap > Customer satisfaction score: 76 > 12-month revenue: $15.65 billion > One-yr. share price change: 45.84% > Industry: Specialty retail stores
Gap Inc. (NYSE: GPS) owns a number of well-known retail chains, including the Gap, Banana Republic and Old Navy. In the most recently available 12 months, the company was extremely successful. Gap reported a net income of $1.1 billion, up from $833 million the year before. But consumers were likely less satisfied with Gap than investors. Of the 10 distinct specialty retailers rated by the ACSI, Gap rated as the worst for customer satisfaction — tied with TJX. Additionally, 2012 marked the fifth consecutive year in which Gap has underperformed the average specialty retail store in terms of customer satisfaction.
6. Supervalu > Customer satisfaction score: 76 > 12-month revenue: $34.77 billion > One-yr. share price change: -35.60% > Industry: Supermarkets
Supervalu Inc. (NYSE: SVU) is a grocery retailer operating discount store Save-A-Lot as well as a list of grocery chains that includes Albertsons, Jewel-Osco and Shop ‘N Save. In addition, the company also operates a supply chain logistics business. Supervalu was among the consumers’ least favorite retail companies, according to the ACSI. The company received one of the lowest supermarket ratings, at 76. Not all supermarkets performed poorly. Publix received one of the highest ACSI scores at 86, while Whole Foods received an 80. The company also has struggled financially. After years of stock price declines, Supervalue has begun trimming its operations, planning the sale of five of its supermarket chains.
5. Sears > Customer satisfaction score: 75 > 12-month revenue: $39.85 billion > One-yr. share price change: -34.60% > Industry: Department and discount stores
Sears Holdings Corp. (NASDAQ: SHLD), owner of Sears and Kmart, had one of the lowest customer satisfaction scores of the department and discount stores reviewed by the ACSI. Since the start of February 2013, The Consumerist published many of the consumer complaints describing Sears’ coupons as highly restrictive, its rewards program as limited and its delivery service as poor. But low customer satisfaction is nothing new for Sears Holdings. Since 2007, the company has consistently had low ACSI scores relative to other department and discount retailers. Additionally, in J.D. Power’s 2012 Online General Merchandise Retailer Satisfaction Report, both Sears and Kmart’s websites were among the worst performers. Customers are not the only people unhappy with the company. In the past year, the company recorded revenue of $39.85 billion, down from $41.57 billion the year before, while domestic sales declined by 2.5% from the year before at stores open at least 12 months.
To see the complete list of the retailers with the worst customer service, please visit 24/7 Wall St.