Walmart's mixed bag: Customers don't hate it -- as much

Walmart (WMT) is investing billions in hiring new staff and making capital improvements. So how is that working out? 

It’s a good news/bad news situation for America’s biggest retailer, according to a new survey from the American Customer Satisfaction Index (ACSI), an independent national benchmark of consumer experiences of products and services sold in the U.S. The retailer has improved its score with shoppers by 9 percent in 2016, yet it remains dead last among department and discount scores, the survey found. 

Walmart’s improvement comes after it has raised wages for employees and boosted customer service during the holiday shopping season. Under CEO Doug McMillon, it has also introduced new services such as curbside grocery pickup at some stores, which has proved a hit with some shoppers. While those efforts have helped improve customer satisfaction, the giant retailer can’t seem to earn as much respect as some of its smaller rivals. 

“Walmart hasn’t changed a lot in terms of the horse race,” said ACSI director David VanAmburg. “While Walmart is clearly doing some things well, other companies are also doing some thing well. Relatively speaking, it’s not enough to be a game-changer” for Walmart. 

Walmart received a customer satisfaction score of 72, or 9 percent higher than its year-earlier score of 66. Yet its next-closest competitor, Ross (ROST), earned a 76. The highest ranking department store is Dillard’s (DDS), which received an 83 in the most recent rankings. The study is based on 12,515 customer surveys during the fourth quarter of 2016. 

As an industry, brick-and-mortar retailers improved their standing with consumers last year, the ACSI said. The gains in customer satisfaction came at a time when some retailers announced plans for cutbacks and store shutterings, such as Macy’s (M) plan to close 68 stores and cut 10,000 jobs. 

Ironically, the bad news for retailers ended up as good news for consumers, since it translated into lower foot traffic in stores and shorter lines, for instance. 

“They are on average experiencing a better shopping experience with shorter lines, getting through the checkout faster, and the stores were generally cleaner,” VanAmburg said. “The staff have time to make it look nicer and keep sizes in the right order in the rack.”

He added, “The downside is that this may be only short-term good news.” 

Once retailers such as Macy’s and JCPenney (JCP) shutter dozens of stores, retailers may experience a decline in customer satisfaction, he noted. 

Shoppers also gave Walmart’s grocery business a higher score this year, but the retailer remained at the bottom of the rankings for food stores. The top-rated grocery chain was Trader Joe’s, with a score of 86. Walmart’s grocery score was 74, up from 67 a year earlier.