This Retailer Is America's Most Respected Company
As a retailer, Amazon.com (AMZN) reigns all but supreme. The Internet giant sells goods and services to customers in every state of the union -- and to 76 countries around the world besides. Every year, Amazon does $89 billion in business (although according to S&P Capital IQ data, Amazon loses money on that business).
And yet, this year, Amazon just yielded pride of place on Harris Interactive's poll of America's most loved companies to a little Rochester, New York-based brick-and-mortar supermarket operating in just six states and pulling down only one-tenth of Amazon's revenues.
Its name: Wegmans Food Markets.
Harris' Poll Gets Bigger -- and Amazon's Reputation Gets Smaller
For 16 years, Harris (a subsidiary of Dutch Nielsen (NLSN), of television ratings fame) has been putting out its own "Reputation Quotient" report on the 60 "most visible companies" doing business in America. These range from homegrown brands such as Amazon and Wegmans to foreign imports like Sony (SNE) and Samsung (SSNLF) (ranked 13th and third on the list, respectively).
"Reputation is far from static and is a business asset that is earned every day as people evaluate companies through the lens of what matters most to them,"Carol M. Gstalder, Harris Poll reputation and public relations practice leader, says in a news release. In this poll, which it expanded to cover 100 companies for the first time this year, Harris aims to quantify which companies are hot -- and which are not.
Why? "More than half of the public actively seeks out information about companies they hear about or do business with" -- what Harris terms "visibility." What's more, 36 percent of shoppers say "they've decided against doing business with a company because of something they learned about its conduct." In other words, reputation -- both bad and good -- matters. And "companies need to evaluate and understand the increasing expectations consumers have when it comes to corporate reputation," according to Harris, if they want to climb to the upper ranks of this poll -- and presumably run a more successful business.
Why Wegmans Wins
This year's winner, Wegmans, edged out Amazon by "building a sterling reputation in the communities [it serves], through its employees, one shopping experience at a time," says Gstalder. It probably doesn't hurt that, as retailers, both Wegmans and Amazon are companies that shoppers deal with on a daily, or at least weekly, basis -- giving both companies multiple opportunities to burnish their reputations with their customers. No. 4-ranked Costco (COST) probably benefits from the same dynamics -- and helps to give retailers three of the top four slots on Harris' poll.
Although Wegmans was one of the 40 companies only just now added to the list in this year's poll, its appearance at the top shouldn't come as a huge surprise. Harris Poll's Equitrend survey just last year found Wegmans rated tops among supermarket shoppers in the U.S. Northeast.
Elsewhere in the nation in last year's Equitrend poll, Costco was named the most popular grocer in the West, Publix in the South, and Hy-Vee in the Midwest. In the Reputation Quotient study, these chains placed fourth, eighth and unranked, respectively, among the 100 "most visible companies."
As for the other companies on the list, Harris assigns to each ranked company a Reputation Quotient score ranging from 1 to 100. Of the 100 companies reviewed, none was found to have "critical" problems with its reputation (i.e., a score below 50) -- although investment banker Goldman Sachs (GS) came closest with a score of just 55.07.
Conversely, an even dozen companies hit Harris' target mark of an RQ score above 80. In addition to Nos. 1 and 2 Wegmans and Amazon, these include, in order:
- Johnson & Johnson (JNJ).
- Kraft Foods (KRFT).
- L.L. Bean.
- Apple (AAPL).
- Google (GOOGL) (GOOG).
- Berkshire Hathaway (BRK-B).
- Disney (DIS).
When these businesses do their jobs right, familiarity doesn't breed contempt, but respect.
Fact: Despite growing up in the Northeast, Motley Fool contributor Rich Smith has never been inside a Wegmans -- but he's heard good things. The Motley Fool recommends Goldman Sachs. The Motley Fool recommends and owns shares of Amazon.com, Apple, Berkshire Hathaway, Costco Wholesale, Google (A and C shares), Johnson & Johnson and Walt Disney. Try any of our Foolish newsletter services free for 30 days. Check out our free report on our favorite high-yielding dividend stocks.