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Customer Satisfaction With Household Products Falls As Prices Rise

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Rising prices are hurting customer satisfaction with everyday household items, according to the latest results of the American Customer Satisfaction Index (ACSI). Customer satisfaction deteriorated across all categories of household nondurables, including food, soft drinks and beer, cleaning products, athletic shoes and apparel.

“It’s never good news when customer satisfaction drops across the board,” says Claes Fornell, ACSI chairman and founder. “Since most nondurables are repeat purchases, strong customer satisfaction is critical. When it weakens, consumers become more reluctant to buy and brand loyalty suffers. As a result, demand weakens overall. Companies typically respond by offering deals and price discounts, which lead to increased brand switching, lower margins and more volatile revenue streams. This can further erode customer satisfaction as consumers eschew their favorite label for a discounted brand that then turns out to be less satisfactory.”

The ACSI Nondurable Products Report 2014 is available here.

High food prices, which have increased at more than twice the rate of the Consumer Price Index, are driving customer satisfaction with food manufacturers lower as the industry fell 2.5 percent to an ACSI score of 79 on a 100-point scale. Nearly all food companies registered a drop in customer satisfaction, particularly the aggregate of smaller companies and store brands, which declined the most—down 4 percent to the bottom of the industry at 77.

With meat prices up sharply, food makers that emphasize meat products are posting lower customer satisfaction scores, including Hillshire Brands (-2 percent), ConAgra (-1 percent) and Tyson (-1 percent). The recent completion of the Tyson and Hillshire Brands merger brings together two of these lower-scoring meat processors.

Customer satisfaction with the largest cereal manufacturers was down as sales of breakfast cereal have fallen 5 percent over the past year. General Mills and PepsiCo’s Quaker division each dropped 2 percent to tie at 85, but Kellogg declined most, tumbling 5 percent to 81.

Mars (+1 percent to 85) and Nestlé (+2 percent to 85) were the only food companies to improve this year, but rival chocolate maker Hershey, unchanged at 86, maintained a slim lead over both. Perennial leader Heinz is long established at the top with an ACSI score of 87.

The shift in consumer preferences toward healthier beverages resulted in weaker customer satisfaction for soft drinks, and the category slid 2.4 percent to 82, its lowest level since 2001. Dr Pepper Snapple plummeted from the top with a 5 percent drop to 82, leaving Coca-Cola and PepsiCo tied for the lead at 83, although they declined as well. Smaller companies and store brands dropped by 2 percent to a collective score of 80, which is the bottom of the category.

The large beer makers fared no better, as breweries fell 2.5 percent to an ACSI score of 79. Smaller breweries made gains in customer satisfaction, climbing 3 percent to lead the category with an aggregate score of 82, but the giants of brewing lagged behind. Anheuser-Busch dropped sharply, down 5 percent to 77, while MillerCoors hardly moved (-1 percent to 81). Over the past year, sales of craft beer surged 17 percent, while overall beer sales contracted 2 percent.

Customer satisfaction with shampoo, soap, toothpaste, detergents and cleaning products slipped 1.2 percent to an ACSI score of 82. Clorox was the only large company to escape a customer satisfaction loss this year, leading the field at 85. Colgate-Palmolive and Procter & Gamble dipped slightly to 83 and 82, respectively. Dial dropped 4 percent to below the average at 81, while Unilever tumbled 6 percent to last place at 80.

As with every other category of nondurables, customer satisfaction with athletic shoes and apparel waned. Athletic shoes fell back 1.2 percent to an ACSI score of 80, while apparel reached its lowest point in 20 years, down 1.3 percent to 78. Smaller athletic shoe brands (including Skechers and New Balance) led, despite a 2 percent dip to the combined score of 81. Nike and Adidas lagged well behind, but a 4 percent downturn to 77 for Adidas handed the advantage back to Nike (stable at 78).

In apparel, VF improved 4 percent to top the category at 84, but all other major brands trailed far behind. Following a small gain, Jones Group placed a distant second at 81. Levi Strauss, which led the category a year ago, dropped 2 percent to 80. Hanesbrands fell to 78, but smaller companies (including store brands) had the poorest customer satisfaction at 77, below the industry average.

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Kristen Cloud

A former newspaper editor and publisher, she once enjoyed leisurely perusing the grocery store aisles but, since having a baby in 2016, she is now an enthusiastic click-and-collect shopper.

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