Tesco losses not indicative of customer satisfaction levels in supermarket sector

The UK’s leading supermarket may be under the spotlight following the worst results in its history, but Tesco’s record losses of £6.4bn for the year are not symptomatic of customer satisfaction levels in the supermarket sector as a whole.

While Tesco may have experienced a meteoric fall from grace driven by what the supermarket’s chief executive, Dave Lewis called “an erosion of competitiveness over recent years” and declining consumer trust, data from the Institute of Customer Service (ICS) shows that the supermarket sector still ranks as one of the highest scoring sectors for customer satisfaction in the UK.

The association’s annual UK Customer Satisfaction Index (UKCSI) ranked retail food as the second-highest scorer among 13 sectors between July 2014 and January 2015, and found that the majority of supermarkets displayed a direct correlation between customer satisfaction levels and business success.

Food retailers with UKCSI scores above the sector average delivered 8.2% year on year sales growth in the 12 weeks to 12th October 2014. Those performing below this average experienced a sales decrease of 1.9% over the same period – with Tesco being the augmented exception.

The results also highlight the clear rise to prominence among the discount stores, with Lidl in particular experiencing a sharp increase in its customer satisfaction levels.

Ocado ranks highest on the UKCSI, with a score of 85.4, pushing Marks & Spencer and Waitrose into second and third place, respectively.

“Within the retail food sector, customer service clearly is one of the main influencers of people’s choice,” says Jo Causon, chief executive for the ICS. “The sector has such strong competition that customers can, and often do, vote with their feet if they are not satisfied, a strong and immediate motivator for companies to focus on customer service.

“Customer service and satisfaction is not just about dealing with complaints, it is about responding to customers - providing goods and services that are relevant to them and doing so in a way that is easy, efficient and where a problem does arise, it is dealt with in a prompt and professional way.”

One major issue on the horizon for all major players in the sector may be the ‘super-complaint’ issued by consumer watchdog, Which?, announced this week in a bid to tackle UK supermarket pricing promotions.