What Happened to Home Depot Customer Satisfaction?
David Rosenthal says customer satisfaction among Home Depot shoppers falls to the lowest level of any major U.S. retailer a couple of years into Nardelli's tenure. Nardelli replaces huge swaths of the floor workforce with part-time general retail labor and drops the idea that knowledgeable people make a 25 cent washer sale, fix a customer's kitchen sink, and turn the visit into something bigger later.
Associates per store drop from 200 to 170 from 2000 to 2006, a 15% cut, and 16-year-olds on part-time jobs ring shoppers up. Before Nardelli, store managers were promoted from associates and stayed focused on the store and the customer. Nardelli prefers candidates with college degrees, so associate hires have no promotion path. The old tradespeople are highly knowledgeable and have trades degrees if they have degrees at all. A college degree has nothing to do with hardware, home improvement, or being a great retailer. The shift weakens the culture. Home Depot's only sustainable competitive advantages were scale economies and an entrepreneurial habit of figuring things out, and the new labor model is heavily destructive to the culture.
Annual surveys cover Best Buy, Costco, Walmart, Home Depot, and Lowe's. Home Depot goes from near the top to dead last. Ben Gilbert notes the chain still doubled revenue and profits and grew from 1,100 stores to 2,000 stores in five years.
