Does Poor Service Lead to Better Earnings?

You would think that the discount retailers that are offering low prices and thriving during the recession, like Wal-Mart, would get some love in the form of customer satisfaction. Not so much.

In fact, a recent report by the American Customer Satisfaction Index, a group that tracks consumer satisfaction, suggests that some of the retail industry’s best performers get terrible customer ratings — and vice versa.

It’s no secret that Wal-Mart is faring much better than most retailers in the recession. But you wouldn’t know it from looking at the department and discount-store segment of the ACS index, where Wal-Mart sits near the bottom of the list. By contrast, Kohl’s, which ranked the highest on the survey, posted a 13.4 percent same-store sales plunge in January year over year.

The specialty-retail portion of the index offered some similar surprises. TJX, owners of the T.J. Maxx and Marshalls chains, are also performing relatively well and management recently upped its full-year guidance — but the company was in the basement of the specialty-retail list. Meanwhile, Barnes & Noble topped that category in satisfaction, but its comparable-store sales decreased 7.3 percent over the all-important holiday season.

Meanwhile, the same held true for the quick-service restaurant sector. Starbucks was at the top of the heap, and that company’s problems are well documented. But the lowest-ranked outfit was McDonald’s, and that fast-food giant is, by most accounts, performing well in this economy.

Of course, it’s highly unlikley that bad customer service actually leads to better sales. But it’s certainly possible that when times are tough, consumers are willing to put up with more shopping hassles if they can still save a buck or two.