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Publix Tops University's Customer Satisfaction Index; Wal-Mart Wins Only on Price

ANN ARBOR, Mich. -- Publix is keeping its shoppers satisfied in terms of quality, service, and price, while Wal-Mart supercenters may have some work to do when it comes to those first two measures, according to the University of Michigan's latest American Customer Satisfaction Index (ACSI), released today.

The ACSI customer ratings, which are conducted annually and released quarterly for different industries, are based on consumer surveys, which are cranked through a sophisticated formula that determines the final score. The scores are used to predict whether people are having the kind of shopping experiences that will put them in the mood to open their wallets for goods and services in the future.

Based on the overall level of satisfaction in the current economy -- which stands at 73.6, an appreciable decline from last quarter -- the index predicts overall consumer spending will drop.

The supermarket industry, however, seems to be holding steady with a score of 73, down just two points from last year. For the tenth straight year, Publix leads the supermarket sector with a score of 81, which is considered an exceptional score for any industry. The retailer was down one percent from the 2003 index.

By contrast, Wal-Mart's first ACSI measurement in the supermarket category enters at just 70. That is lower than the national average of all industries measured. Indications are that Wal-Mart supercenters compete almost solely on price, as opposed to overall experience, according to the group that conducted the study.

"Wal-Mart supercenters do well on price and value for money, but customers give it a low score on the quality of groceries, which includes meat, produce, and the variety and inventory of product brands," said professor Claes Fornell, director of the National Quality Research Center at the Stephen M. Ross Business School at the University of Michigan, in a statement.

"In the battle for customer satisfaction, quality usually trumps price. But when price gets low enough, people buy. Size and volume give Wal-Mart a great advantage in its ability to price below everyone else. Its power over suppliers makes it possible to do well without stellar customer satisfaction," Fornell noted.

In the department and discount stores category, Wal-Mart fell by 3 percent to 73 -- its lowest score since 2000 and just below both the industry average and Target.

Specialty retail, which includes wholesale warehouse clubs, home improvement outlets, and electronics stores, improved in the latest ACSI. Costco maintains its lead over other specialty retailers despite a decline of 1 percent (to 79). Wal-Mart's Sam's Club stores, meanwhile, fell 3 percent (to 75), equal to the industry average.

The study's authors attribute the overall satisfaction decline to two major factors: the rise in the price of gasoline, and the fact that satisfaction with gasoline stations is at its lowest level ever in ACSI (70); and problems with servicing a growing volume of shoppers.
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