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Why SA consumers are most satisfied with Woolworths

News24 logo News24 2017-04-21 Lameez Omarjee

Shoppers walk into a Woolworths store at a shopping center in Lenasia, south of Johannesburg August 28, 2013. South African retailer Woolworths reported a 27.3 percent rise in full-year profit on Thursday, reflecting the resilience of its upscale customer base as the rest of the consumer market struggles with high personal debt. Woolworths, which sells luxury food products and clothing, said headline earnings per share (EPS) totalled 340.4 cents in the year to end-June compared with 267.3 a year earlier. Picture taken August 28. REUTERS/Siphiwe Sibeko (SOUTH AFRICA - Tags: BUSINESS)... © SIPHIWE SIBEKO/REUTERS/Reuters Shoppers walk into a Woolworths store at a shopping center in Lenasia, south of Johannesburg August 28, 2013. South African retailer Woolworths reported a 27.3 percent rise in full-year profit on Thursday, reflecting the resilience of its upscale customer base as the rest of the consumer market struggles with high personal debt. Woolworths, which sells luxury food products and clothing, said headline earnings per share (EPS) totalled 340.4 cents in the year to end-June compared with 267.3 a year earlier. Picture taken August 28. REUTERS/Siphiwe Sibeko (SOUTH AFRICA - Tags: BUSINESS)... Johannesburg – Woolworths has succeeded in providing high quality products, convenience and fast service, and its growing presence at petrol stations has helped, a survey shows.

The South African Customer Satisfaction Index (SAcsi) for supermarkets shows South African consumers are once again most satisfied with Woolworths. Woolworths was in top spot the previous year.

Among the driving factors for this was Woolworths' ability to provide quality products.

The survey conducted by Consulta, looks at the combined results of the Customer Expectations Index, Perceived Quality Index and the Perceived Value Index, all of which have a score out of 100.

It measures the customers’ experience with a brand, the degree to which a product meets or falls short of their expectations and how well the actual experience compares with expectations.

The survey compares Woolworths, Shoprite, Pick n Pay, Spar and Checkers. The industry average was at 76.2, up from 75.7 in 2015. Woolworths’ score was higher than the industry average at 82.1, this is up from its score of 80.7.

Checkers retained its position as runner-up with a score of 77.2. This was followed by Pick n Pay with a score of 76.5. Shoprite lost its runner-up position in 2015 and is now fourth, with a score of 75.5, down from 77.1. Spar scored 75.2, down from 75.7.

Declining loyalty

The research showed that loyalty declined across all supermarket brands. The overall score decreased from 76.4 in 2015 to 74.2.

Woolworths led in the loyalty category with a score of 77.3, followed by Shoprite with a score of 74.9. Pick n Pay scored 74.6, Spar scored 73.5 and Checkers scored 72.5.

Professor Adré Schreuder, CEO of Consulta explained that given the “tough economic times” pricing would likely influence loyalty. “While customers may display less brand loyalty now, supermarkets cannot afford to stop investing in positive shopping experiences,” he said.

Customer expectation

Customer expectation, which measures whether a customer’s expectations are met by the actual supermarket experience, scored 78.3. This high value indicates that the supermarket brands must work harder to maintain the standards they have established, explained Schreuder.

Perceived quality

South African customers believe they receive great value from Woolworths. Its perceived quality score is at 87 and its perceived value score is at 80.6, both of which are above industry averages of 80.3 and 76.5 for perceived quality and perceived value respectively.

Referencing a study by Nielsen, convenience and location was a top influencer for a consumer’s choice in supermarket. This is followed by speed, high-quality fresh produce, product availability and then price and promotions.

The research shows that customers are willing to pay for quality products if they can afford to, he explained.

“A shopping experience is determined by so many factors and supermarkets need to demonstrate their ability to meet their ever-changing customer needs, consistently and reliably,” said Schreuder.

Supermarkets have introduced customer loyalty programmes, premium products and till point promotions to help improve the customer experience, the report explained.

The survey also measures the likelihood of consumers to recommend a supermarket to friends and family. Woolworths scored 50%, this is 18% higher than the average of 32%. Checkers, which is the least recommended, scored 26% on the Net Promotor Score (NPS).

Spar's NPS score was 28%, Pick n Pay scored 31% and Shoprite scored 37%.

“A high likelihood to recommend demonstrates that customers appreciate supermarkets that deliver on their expectations and continue innovating to address evolving needs,” said Schreuder.

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