Fri, 16th January 2009

Non-food retailers are top of the league

Retailers are doing better at keeping their customers happy, despite the weakening of consumer spending in the economic downturn, a major survey reveals.

By Mark Higgins

The retail (non-food) sector is now top of the league for customer satisfaction out of 12 private and public sectors, according to the latest national measure by the Institute of Customer Service (ICS). And retail (food) has made vast strides to be just one rating point behind in third place.

The UK Customer Satisfaction Index (UKCSI) asked more than 24,000 people to rate companies and organisations on consumer priorities such as professionalism, complaint-handling, quality and competence and friendliness of staff. It found that customer service is improving across the UK - and the recession may be an important contributory factor.

With consumers seeking value-for-money products and services, companies are making greater efforts to impress their customers, keep them happy and prevent them slipping into the clutches of competitors.

Results this time around show satisfaction with the retail (non-food) sector overall stood at 77.4 out of 100, ahead of the services sector - which scored 77.3. The retail (food) sector rating of 76 puts it in third place, overtaking the automotive and the finance (insurers) sectors.

All top five in the popularity polls for non-food retail scored more than 80, which according to ICS puts them in the world-class category for customer service. They are John Lewis (88), Lloyds Pharmacy (85), Boots (84), Marks & Spencer (83) and HMV (80).

With scope for further service improvement within the league table of the top organisations in the retail (non-food) sector is Argos on 77, with Debenhams, Ikea, Dorothy Perkins/Top Shop/Evans/Miss Selfridge and Superdrug all a point better on 78.

Waitrose (85) leads food retailers, but only by decimal points ahead of Marks & Spencer (also 85), followed by Asda (78), Sainsbury's (76) and Morrisons (76).

Below them were Tesco and Aldi on 75, Iceland and Lidl on 74 and Co-op with a score of 71.

ICS executive director Robert Crawford says: "With five non-food retailers now offering world class customer service, it shows companies in this sector are taking customer satisfaction seriously.

"Customer service is the only differentiator left today. Consumers are increasingly looking for better value-for-money especially in the current economic climate, however providing great service is still the best way to ensure they choose a business ahead of its competitors."

Overall satisfaction levels continue to increase to a UKCSI of 72 out of 100, compared to a score of 71 when the previous index was published in July 2008.

The survey reveals 72% of consumers expect organisations to improve further in the coming months. And although 26 organisations received a CSI over 80, Robert Crawford believes an average satisfaction level of 80 must be achieved before the UK can claim to provide world-class service.

"The encouraging showing of retailers in particular shows they have been quick to recognise that when people have a finite amount of money they will be more careful to spend it where they are treated well.

"One of the best ways to put customers first is to have a direct relationship with them, so developing staff who can treat customers as individuals and solve their problems can make a real difference."

Worst performing sector was again local government, while utilities replaces telecommunications as second bottom.