Costco the leading discount store

Just ahead of Target.

New research from Roy Morgan has Costco as Australia’s leading discount department store with a customer satisfaction rating of 88.6%, just ahead of Target on 88.5% and Kmart on 88.4%.

These ratings for the industry underlie that 87.5% of customers of discount department stores are satisfied, an increase of 1.1% points over the year with all five leading discount department stores increasing their customer satisfaction.

The biggest improvement over the past year came from Best & Less which rose 1.8% year-on-year for a customer satisfaction rating of 86.4%, monthly winner Costco which increased by 1.7% to 88.6% and Target by 1.5% to 88.5%.

Both Kmart and Big W also improved their customer satisfaction over the last year. The only declines were for Harris Scarfe and Target Country which both just missed out on the top five discount department stores in July.

Costco has built on its victory from the 2017 Roy Morgan Discount Department Store Customer Satisfaction Annual Award. Competition so far in 2018 has been tough with key rivals Target and Kmart both snaring multiple monthly victories.

Costco’s victory comes as the American retailer unveiled plans for an ambitious expansion with a huge distribution centre opening in Sydney’s west next year, signaling an expanded online retail presence, Roy Morgan CEO, Michele Levine said.

“The focus on customers resulting in high customer satisfaction ratings of leading discount department stores show that Costco, Kmart, Target, Big W and others are taking the threat posed by online retailer Amazon seriously, which recently became only the second company to top a market capitalisation of $1 trillion.

“In an increasingly competitive environment with discount department stores facing  competition from online retailers such as Amazon, the big two department stores Myer and David Jones, specialist niche retailers and of course each other in maintaining a high level of customer satisfaction and building a reputation of trust is key.

“The success of German discount supermarket chain Aldi as our most trusted brand provides a stunning example of how building a reputation for trust and dependability is solid bedrock upon which to build a successful business,” she said.

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