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Customer service leads to year-on-year sales growth in retail food sector: new study

A new study by The Institute of Customer service has shown that food retailers with a higher than average score for customer satisfaction saw an 8% increase in year-on year sales.

GENERAL MERCHANDISE

Customer service leads to year-on-year sales growth in retail food sector: new study

A new study by The Institute of Customer service has shown that food retailers with a higher than average score for customer satisfaction saw an 8% increase in year-on year sales.

In contrast, competitors with a score below the sector average gained an increase of just 4% year-on-year in the 12 weeks to 2 March 2014.

The UK Customer Satisfaction Index involved more than 12,000 interviews with consumers about their customer experiences. During the interviews customers gave insight into 189 of the UK’s leading brands across 13 different sectors. Of the 13, retail food retained its place as the second highest scoring sector with a score of 81 (out of 100), 3.9 points above the UKCSI average of 77.1.

Although the average score for the sector fell by 0.6 points between July 2013 and January 2014, the score concealed a disparity between the organisations’ performances, with a difference of more than 10 points between the sector leader and the lowest scoring organisation.

Jo Causon, chief executive of the Institute of Customer Service, explained: “Although customer satisfaction scores have fallen over the past two years, a number of organisations within the retail food sector continue to perform well. The results provide further evidence that the need to differentiate through service has never been so important to improving business performance.”

She added: “Organisations with customer satisfaction ratings higher than the sector average have shown stronger sales performance than those with lower than average satisfaction. In addition, those scoring highest in the sector also tend to score higher in customer retention, propensity to buy and recommendation.”

For the first time since the UKCSI began in 2008, each survey included questions about the balance of price and service. It showed that 57% of customers questioned said they preferred a balance of price and service when buying from a food retailer and were not prepared to compromise service levels in pursuit of the cheapest deal. In addition, retail food was found to have one of the largest proportion of customers (28%) who were seeking excellent service and were willing to pay a premium price to get it.

Causon added: “Although Aldi and Waitrose cater for different markets, both are achieving sales growth by understanding their customers’ needs and focusing on the overall experience they offer, achieving consistently high UKCSI scores in the process.”

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