News
McDonald's leads in sales but lags in customer satisfaction
June 15, 2010
A new report on customer satisfaction from the American Customer Satisfaction Index (ACSI) on five industries, including the quick-service segment, reveals that in this instance, sales growth doesn't always correlate to customer satisfaction. Surprisingly, McDonald's, which has continued to post same-store sales growth during the recession, lost traction on customer satisfaction while KFC and Burger King made large gains during the first quarter of the year.
Frequent price promotions and new menu items contributed to increasing customer satisfaction for the largest restaurant and QSR chains, with KFC up 9 percent to 75 and Burger King up 7 percent to 74.
American Customer Satisfaction Index (ACSI) | 2010 Customer Satisfaction Scores |
Papa John's Little Caesars Pizza Hut Starbucks Domino's Wendy's KFC Burger King Taco Bell McDonald's | 80 78 78 78 77 77 75 74 74 67 |
During Q1, KFC introduced its Fiery Grilled Wings and continued with its strategy of menu innovations, focusing on portable and balanced options and improving operations. In March, the chain launched its handheld boneless chicken breast filet, the precursor to the infamous meat-as-bun Double Down sandwich. In April, Yum! Brand's reported that the chain's U.S. same-store sales were down 4 percent for its first quarter of the fiscal year.
Burger King, meanwhile, focused on its value messaging and was in the midst of a six-month push of the $1 Double Cheeseburger, promoting the sandwich as bigger, better and cheaper than McDonald's. The chain balanced its value promotions with premium products designed for its new broiler, including the new Steakhouse XT burger line. In April, the chain reported U.S. and Canada same-store sales were down 6.1 percent for its third quarter.
Wendy's leads the QSR segment in customer satisfaction with a score of 77, andMcDonald's was the only large QSR chain to drop in customers satisfaction, falling 4 percent to an industry low of 67.
"This may seem somewhat paradoxical in view of McDonald's sales growth over the past year, particularly compared to competition," said Claes Fornell, founder of the ACSI and author of The Satisfied Customer, in a news release. "But as increasingly frugal consumers have made price more salient, McDonald's has acquired more customers. These newcomers seem less satisfied, and were it not for the economy, some of them would probably rather eat somewhere else."
In Q1, McDonald's launched the Big Mac Snack Wrap, leveraging its portable wrap line, to focus on value and made Wi-Fi free in all its U.S. stores. In April, the company reported U.S. same-store sales were up 1.5 percent, boosted by breakfast and value purchases.
Pizza makers lead the results in customer satisfaction, with Papa John's leading the category with a jump of 7 percent to 80. Pizza Hut ( up 5 percent) and Little Caesar (up 4 percent) follow at 78. Domino's is stuck at 77, despite rolling out new ingredients that reinvented their pizzas from the crust up.
Olive Garden leads the restaurant category, up 4 percent to 84, followed closely by Red Lobster, up 4 percent to 83. Outback and Chili's gain too, but are well behind. Outback improves 4 percent to 80, while Chili's is at the bottom, rising 5 percent to 78.
Satisfaction with the quality of products and services provided by the largest companies in airlines, hotels, and express delivery services industries also saw gains. Passenger satisfaction with airlines improved for a second straight year, up 3 percent to an ACSI score of 66. Low rates, lots of promotions and free perks are keeping customer satisfaction with hotels steady at 75 for a third straight year.
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