Groceries take up a big chunk of our spending each year. In fact, the average family of four shells out $333 per month on food they prepare at home, according to the most recent government statistics. That's more than we spend each month eating out ($220), buying clothes ($130), or entertaining ourselves ($208).
But according to a new survey from the American Customer Satisfaction Index (ACSI), consumers aren't feeling as happy right now with the $4,000 they spend each year at supermarkets: customer satisfaction for the group fell 2.6% in 2014.
That drop was mainly about food costs, which jumped by over 3% last year and translated into higher prices in almost every aisle. Still, some companies did much better than others at keeping their customers happy as prices rose. Here are the best, and worst, performers on ACSI's supermarket list:
Wal-Mart sits at the bottom of this year's list with a satisfaction rating of 71, far below the supermarket average (76) and the top score (85). That underperformance isn't due to higher prices as much as a poor shopping experience. Customer complaints about half-empty shelves and long checkout times at Wal-Mart stores are on the rise.
Company executives aim to address those complaints through measures such as an expanded "checkout promise" initiative that will keep more registers open at peak times this year. Wal-Mart's recently-announced pay raise for associates is also targeted at improving the shopping experience. Finally, the company plans to invest in better inventory management and employee training, all in hopes of getting its shopper satisfaction scores back up.
Meanwhile, value plays a key role in keeping customers happy at the high-performing supermarkets on our list. Whole Foods, for example, logged the biggest satisfaction improvement this year by jumping from 78 to an 81 rating. The organic foods giant has been busy cutting prices to make itself more competitive and shed the "Whole Paycheck" moniker. The strategy is working: Whole Foods' customer traffic growth has accelerated in each of the last three quarters. The company plans to keep pushing ahead by making aggressive price cuts in its produce section this year.
Kroger is finding similar success with its corporate brands, including Simple Truth and Private Selection. The in-store brands recently logged their fastest growth in three years, and management credits them, along with overall price reductions, as key to Kroger's long track record of growth. "Our ability to deliver this combination of value sets us apart," CEO Rodney McMullen told analysts in a recent conference call.
All the best are private
The supermarkets that sent the most customers home with smiles on their faces were Wegmans and Trader Joe's. Both companies entered ASCI's list for the first time this year and elbowed right to the top with dominant scores of 85. They even pushed Publix out of the No. 1 spot it had claimed for years.
These three supermarket chains deliver a great shopping experience that covers all the bases: value, assortment, service, and convenience. Here's how one shopper described a typical trip to Wegmans: "Everything is in its place, the values are abundant, and the staff is sincere and helpful. The fruit is bright, shiny, and seasonal. The baked goods are out of this world. The cheese department would put a real French fromagerie to shame."
Unfortunately for investors, none of the top three supermarket contenders are publicly traded. So while we can enjoy shopping at Publix, Wegmans, and Trader Joe's, we can't become partners in their businesses. However, these supermarkets still demonstrate how companies such as Kroger and Whole Foods can keep improving on the grocery shopping experience, and how Wal-Mart can manage its own recovery.