Satisfaction with South African supermarkets has dropped significantly, according to sample of 2 059 customers surveyed over the past two months in the South African Customer Satisfaction Index.
The average industry score was 4.9 index points lower than the satisfaction recorded in September 2014. The brands measured were Woolworths, Shoprite, Checkers, Pick n Pay and Spar. Woolworths scored 80.7 out of 100, giving the brand leadership position for the second year in a row and adding to its leadership position in the SAcsi index on clothing retailers released earlier this month. The other brands scored on par with the industry average. Shoprite and Checkers both scored 77.1 out of 100, Pick n Pay scored 76.2 and Spar scored 75.7 out of 100.
The decline in satisfaction is in line with economic pressure in South Africa that directly affects customers’ pockets, especially amongst middle income shoppers. “Income and spending remain under pressure as a result of various economic factors including the decline of the rand, slow economic growth, employment levels and a challenging economic environment. Retailers’ satisfaction scores across the board declined from 2014 to 2015, with not a single exception amongst the brands,” explains Prof. Adré Schreuder, founder of SAcsi and CEO of Consulta.
Although Shoprite’s scores also declined, the decline was less marked than the other brands and the brand therefore improved its relative position in the index. Three years ago Shoprite scored the lowest in customer satisfaction. This score improved in 2014 and this year, Shoprite is in a close second position, just behind Woolworths, despite serving different target markets.
Checkers and Shoprite achieved the same overall satisfaction score, but Shoprite outperformed Checkers in the indicator of perceived value (value for money). In fact, Checkers’ overall satisfaction score is significantly lower at 76 compared to 83 last year – a decline mirrored by Pick n Pay. Spar scored lowest in overall satisfaction for the second year in a row. “The trading environment for supermarkets is changing. More customers are shopping online, making it possible for customers to compare prices and shop where they receive the best value for money. More consumers are eating out at home, meaning they are buying prepared foods at supermarkets to eat at home. Quality is seen as paramount for these shoppers,” explains Prof. Schreuder.
Although the overall quality score didn’t change significantly, perceived quality at Woolworths supermarkets declined by 3.3 index points. Despite this drop, Woolworths leads with the highest perceived quality score.
The analysis doesn’t hold much hope for relief in the industry and points to price sensitivity as a key factor. “A total of 47% of respondents indicated that they would shop at different stores to achieve a cost saving of 5% or less. With economic pressures likely to increase over the next 12 months, trading conditions will be tough,” says Prof. Schreuder. This was supported by a Consulta public opinion poll run in July which indicated that the greatest factor in choosing a supermarket is price, followed by quality, location, service and the brand.
Spar, Pick ‘n Pay and Checkers experienced the highest levels of complaints. Specific issues mentioned were products sold past the expiry date, product availability issues (especially products on promotion) and incorrect pricing. Interestingly, Spar customers reported the highest levels of complaints, yet the brand appears to be addressing problems most effectively, achieving a complaint resolution score of 71 out of 100 compared to the industry average of 67.
While complaints are lowest among customers of Woolworths and Shoprite (11% of customer surveyed), it is significant that Woolworths saw a 14 index point drop in their complaint handling capabilities from 2014 (71) to 2015 (57). “This presents an opportunity to ensure that customer complaints are effectively handled, especially given the low loyalty scores attributed to a price-sensitive industry such as supermarkets,” explains Prof. Schreuder.
The Net Promoter Score is a measure of the likelihood of customers to recommend a particular brand. The NPS for the industry also reflects a decline from 2014 (51%) to 2015 (37%). Woolworths scored 57%, well above the average of 37% for the industry, followed by Shoprite (44.9%). Spar reported the lowest score at 28% and is the only brand that scored below industry average.
SAcsi holds a licence with the American Customer Satisfaction Index (ACSI) and forms part of a growing number of ACSI-licenced partner countries worldwide, which allows SAcsi to compare customer satisfaction with this global community. SA customer satisfaction with supermarkets in 2015 (77) is slightly higher than the score recorded in the 2014 USA scores (76 out of 100). USA scores for 2015 are not yet available.
About the research methodology
SAcsi is an independent index. As such, no specific sponsor or client commissioned this survey. SAcsi releases monthly satisfaction indices to provide a national economic indicator of customer satisfaction with the quality of products and services available to household consumers in South Africa. Subscribing members have access to the full results. Companies are selected for inclusion based on market share and the random sample includes a minimum of 269 respondents per company.