Customers increasingly satisfied with smaller, full-service restaurants

by Eric Schroeder
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ANN ARBOR, Mich. – Customer satisfaction with smaller chains and restaurants is on the upswing, even as satisfaction with the largest full-service restaurant brands declines, according to a report released by the American Customer Satisfaction Index (ACSI). Data from the ACSI report show Americans ate out an average of four meals per week in 2013, up 60 percent from the end of the Great Recession. And, those who are eating out are more satisfied with the experience. Customer satisfaction with full-service restaurants was up 1.2 percent to an ACSI score of 82, holding a slim lead over fast-food (80).

“In a weaker economy, consumers respond to price, but as the economy improves, quality becomes more important to restaurant customers,” said Claes Fornell, chairman and founder of the ACSI. “This is good news for smaller chains and individual restaurants, which customers associate with higher-quality food and better service.”

Customer satisfaction for smaller restaurant chains was up 2 percent in 2014 to an ACSI score of 83, the best in the full-service category. Meanwhile, all of the largest chains experienced drops in customer satisfaction. Red Lobster, which recently was sold by Darden Restaurants to Golden Gate Capital, suffered the sharpest decline, falling 6 percent to an ACSI score of 78 in 2014 from 83 in 2013. Applebee’s and Chili’s both experienced a 5 percent drop in their ACSI score, while Olive Garden’s score fell 4 percent and Outback Steakhouse’s score eased 1 percent.

ACSI scores for the limited-service restaurant category held steady at 80 during 2014, the third year in a row that it has maintained its highest-ever level of customer satisfaction.

“This is a considerable transformation for an industry that posted scores in 60s throughout the 1990s and never exceeded an ACSI score of 70 until 2001,” said David VanAmburg, director of the ACSI. “Price has always been a strong point for fast-food, but fast-casual restaurants have been improving quality and service at such a brisk pace that customer satisfaction with fast-food is nearly as high as dine-in restaurants.”

Among the biggest fast-food companies, pizza was king, with Papa John’s and Pizza Hut posting the top score at 82. Little Caesars and Domino’s Pizza were close behind, at 80. Subway, which led the category in 2013 with a score of 83, fell 6 percent during the past year and now sits at 78, according to the report. Wendy’s was tied with Subway at 78, while Burger King and Starbucks both had a score of 76.

Similar to the full-service restaurant category, smaller is better for quick-service restaurants when it comes to customer satisfaction, the ACSI report noted. The aggregate ACSI score of these restaurants climbed 2 percent to 84. The group of smaller chains includes such restaurants as Panera Bread and Chipotle.

The ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The ACSI uses data from interviews with roughly 70,000 customers annually as inputs to an econometric model for analyzing customer satisfaction with more than 230 companies in 43 industries and 10 economic sectors, as well as more than 100 services, programs, and web sites of federal government agencies. The full report is available at www.theACSI.org.
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