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Trader Joe’s, H-E-B, Wegmans and Costco Share Competitive Edge

New study from Glassdoor finds happy employees boost financial performance
Photograph by WGB Staff

Boasting both high customer and employee satisfaction, Trader Joe’s, H-E-B, Wegmans and Costco rank among the top 10  employers in a new study by Glassdoor, a website where current and former employees anonymously review companies.

The four retailers are the only grocers to make the list of exceptional employers in the report Satisfied Customers: The Link Between Glassdoor Reviews and Customer Satisfaction by Glassdoor's Daniel Zhao, senior economist and data scientist, and Andrew Chamberlain, chief economist.

“A growing number of companies today are striving to build a ‘customer-first’ culture. But can employers deliver on the promise of great customer satisfaction without investing in satisfied employees first?” the report asks.

Using a data set of about 863,000 Glassdoor employer reviews along with annual customer satisfaction ratings from the American Customer Satisfaction Index (ACSI), the study examines the link between a satisfied workforce and delivering world-class customer satisfaction—and ultimately, how satisfaction impacts profitability.

The economists quantified the link between employee and customer satisfaction using a panel of 293 large employers across 13 industries between 2008 and 2018 and then compared that with data from ACSI, which collects satisfaction opinions about products and services purchased each year by about 300,000 U.S. consumers.

“Overall, there is a strong connection between better customer and employee satisfaction,” says the report. Each 1-star improvement in an employer’s Glassdoor company rating (out of 5) correlates to a “statistically significant” 1.3-point increase in customer satisfaction (out of 100).

However, in high-customer-contact industries such as grocery retailing, the economists find that the effect is more than double. In those companies, each 1-star higher Glassdoor rating predicts higher customer satisfaction of 3.2 points.

Bottom line, notes the report, “customer satisfaction matters for financial performance.”

Research shows that each 1-star improvement in Glassdoor employee satisfaction ratings translates to a 7.8% higher market value. For employers in high-customer-contact industries, the financial impact is potentially much larger, the economists note. They find that for these companies, each 1-star improvement in employee satisfaction is associated with a predicted boost in market value of 18.9%.

Trader Joe’s, H-E-B, Wegmans and Costco were among 10 firms in the Glassdoor sample with a 4-star or higher overall Glassdoor rating and an ACSI customer satisfaction index score of 80 or above in 2018.

Trader Joe’s had the highest scores among the grocers, with a 4.2 overall Glassdoor rating and an ACSI score of 86.

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