In 2009, consumers spent $405 billion at Wal-Mart, the world’s largest retailer, which has built its brand around the concept of “rollback” pricing. However, according to a new study from Consumer Reports, consumers might find a better value by joining Costco.
Consumer Reports surveyed 30,666 subscribers, who indicated that 10 retailers (including Sears, Meijer, JCPenny and Dillard’s) offered product pricing that was comparable to Wal-Mart. The only store that scored better than average for value was Costco which received praise for its rock-bottom prices. The study also showed that despite being the largest retailer, nearly 75% of respondents who shopped at Wal-Mart found at least one problem to complain about in regards to the store or its staff (50% had two or more complaints). Wal-Mart was not alone as Kmart also scored notably lower than the other retail stores.
Will Ander, senior partner at McMillianDoolittle, says “Costco surprises consumers with great products and brands at exceptional prices.” He goes on to say, “They don’t promise to have everything, but they do offer a true treasure hunt where everyone seems to find that exceptional item at an unbelievable price. Most customers will give you great satisfaction marks if you exceed their expectations, and Costco is light-years ahead of the other discount competitors in that respect.”
Additional Findings from the Consumer Reports Study:
- Four retail chains received outstanding scores for merchandise quality: Costco (watches and jewelry, personal-care items, hardware, home décor, kitchenware, electronic entertainment such as music and DVDs, and sporting goods and toys), Dillard’s (men’s, women’s, and children’s clothing; personal-care items; home décor; and kitchenware), Macy’s (home décor and personal-care items), and Sears (hardware).
- Despite Target’s high profile partnerships with fashionistas such as Cynthia Vincent, Eugenia Kim and Zac Posen, consumers were not impressed with their “cheap chic” goods. Respondents gave a below average rating to the quality of Target’s women’s clothing and watches and jewelry, and the store’s kitchenware, home décor, and men’s and children’s apparel were only deemed average.
- Retailers have shifted their focus away from service to offering low prices, however, Dillard’s scored well above its competitors in customer service.
- In addition to poor service, the two biggest problems were out of stock items and crowded checkout lanes.
Please share your reactions below. Will large retailers continue to sacrifice customer service as they focus on offering lower pricing? Which retailers do you feel successfully offer great products, service and pricing/value?
