Keeping customers happy has been a challenge since the covid pandemic created supply chain woes which left consumers unable to find their favorite brands on store shelves.
Add in rising prices due to inflation, higher wages, and rising shipping costs and it’s easy to see why consumers were angry. Americans simply had never experienced product shortages and widespread price increases on such a widespread level.
It was a bleak time but over the past year or so, retailers have dug out. Costs have slowly (albeit not fully in some cases) come down while shelves have been fully stocked once again.
Related: Costco adds a bargain upscale product that members will love
It’s very welcome to return to normal that actually has Americans appreciating just how easy we have it when we’re not facing a global pandemic. That has led to an overall rebound in how many consumers feel about the grocery chains, warehouse clubs, and department stores where they buy their groceries, according to a new report from the American Customer Satisfaction Index (ACSI).
“Satisfaction among supermarkets skyrockets 4% to an ACSI score of 79 as food inflation slows and consumers perceive stronger value through better sales and promotions,” according to the report.
And while overall satisfaction has improved, there has been a pretty massive change at the top.
Trader Joe’s sells a unique mix of products.
Image Source: Shutterstock
Trader Joe’s loses its crown
Trader Joe’s, maybe more than any other grocery chain, has a passionate following. That’s because the company has very different merchandise than traditional full-line grocery chains.
You can still do your basic food shopping there, but many of the chain’s customers see it as a supplement to their regular shopping. Still, because of its house brands and products are not stocked by any of its rivals, Trader Joe’s has built up a passionate fanbase.
That makes it surprising that Costco (up 4%), H-E-B (up 5%), and Publix (up 4%) share a three-way tie atop the industry at 85, upending Trader Joe’s multiyear winning streak, according to the ACSI. It’s a somewhat shocking development even if Trader Joe’s did not fall very far.
The former leader is next with a steady ACSI score of 84.
“Publix sets the standard across much of the in-store experience, including staff courtesy and store cleanliness and layout, while Costco and H-E-B win on value. All three benefit greatly from the popularity of their private-label brands,” the ACSI shared.
Costco also led in general merchandise
It’s possible that the covid pandemic actually helped improve Costco’s (COST) – Get Free Report standing with members. The chain already offered a limited stock so it did not have the same level of product shortages as its rivals. It also took steps including taking shipping of some of its merchandise into its own hands and even lowering its profit margins in some cases.
The ACSI, however, believes that it’s the warehouse club’s well-known house brand that’s driving its success.
“Costco’s Kirkland Signature is (considered ‘cool’) – Get Free Report and has become one of the main reasons people go to the store these days. There are even TikTok and Instagram accounts dedicated to identifying the best of these products,” the ACSI added.
Sam’s Club, Costco’s Walmart-owned rival, saw its general merchandise ACSI stay at 81 which match Target’s, which climbed 4% from 2022. Costco tied with Macy’s at 82 to lead general merchandise.
The ACSI said that Sam’s Club, like Costco “also sees a gravitational pull toward its private label, Member’s Mark, which now accounts for 30% of its total sales.”
Warehouse clubs were broadly popular, as the third player in the space, BJ’s Wholesale Club, “unchanged at 80, sits toward the top of the industry too, while Belk (79) and Big Lots (78) experience the largest gains, climbing 5% and 7%, respectively,” the ACSI shared.
