The 10 Most Hated Companies in America

Print Email

6. Best Buy

The electronics retailer broke the cardinal rule of customer relations. It failed to keep a promise to its customers — and told them when it was too late. Best Buy (NYSE: BBY) ran out of certain items that people had ordered for Christmas, but did not tell the customers until two days before the holiday. In a Forbes article, which argues that Best Buy will slowly go out of business, the author pointed out that the retailer’s explanation made it appear that some force from outside the company caused the problem — this was not the case. According to the company’s press release, “Due to overwhelming demand of hot product offerings on BestBuy.com during the November and December time period, we have encountered a situation that has affected redemption of some of our customers’ online orders.” Did Best Buy encounter the problem, or did the problem encounter Best Buy? ForeSee research recently issued its 2011 Retail Satisfaction list for the holidays. Best Buy rival Amazon.com (NASDAQ: AMZN) was at the top of the list. Best Buy was not even in the top 20. Wall St. has no reason to be happy with Best Buy either. Its shares have fallen 30% in the past year.

7. Bank of America

In September, Bank of America (NYSE: BAC) announced it was laying off 30,000 people. Its share value has dropped 55% in one year. And the bank continues to face legal actions from the federal government, several states and some of its shareholders. In early September the FHFA officially announced its lawsuit against 17 banks, including Bank of America, Citigroup (NYSE: C), JPMorgan Chase (NYSE: JPM) and Goldman Sachs, concerning $196 billion in mortgage securities. Bank of America has even been charged with keeping one of its largest legal threats a secret from shareholders. Reuters reported in August that top Bank of America lawyers knew as early as January that American International Group (NYSE: AIG) was prepared to sue the bank for more than $10 billion, seven months before the lawsuit was filed. Retail customers have shown their disdain for Bank of America’s customer service. Not only is it near the bottom of many customer satisfaction surveys, 41.5% of respondents in the MSN Money-IBOPE Zogby International customer service survey rated its service as “poor.” That is the highest percentage of respondents giving a “poor” rating to any company.

8. Johnson & Johnson

Johnson & Johnson (NYSE: JNJ) has experienced a series of product recalls and problems that began with Motrin and Tylenol for children. According to AP, these recalls were among “more than two dozen that J&J has issued since September 2009, for products ranging from adult and children’s nonprescription Tylenol, Motrin, Benadryl and other medicines to prescription drugs for HIV and seizures, defective hip implants that caused severe pain and contact lenses that irritated the eyes.” The parents of a two-year-old who was treated with one of the tainted batches of Children’s Tylenol recently sued the company for the wrongful death of their child. In March 2011, the FDA took over three Tylenol plants owned by Johnson & Johnson. The recalls are beginning to hurt the company. Third-quarter 2011 sales of over-the-counter drugs fell 24% from the previous year. According to Bloomberg, company executives attributed the significant loss of market share to quality issues that kept products off shelves. The long series of problems has ruined what was once a sterling reputation. Since the disclosures mounted two years ago, Johnson & Johnson shares are flat while the DJIA is up 17%, over the past year.

 9. Sears

The aging retailer has done a poor job with customers in the past year, and the parent company has done poorly for Wall St. since Sears merged with bankrupt Kmart in 2005. The performance of both brands has been so bad that shares in Sears Holdings (NASDAQ: SHLD) have dropped 60% in the past year. Sears has been the biggest problem. In the five holiday weeks that ended at the start of January, Sears store sales were down 6%. After announcing these results, Sears Holdings said it would close 100 to 120 Sears and Kmart stores. In December, S&P placed Sears Holdings’ credit rating on review for a possible downgrade. “We believe that one of the primary issues is that the company has underinvested in its stores base, especially when compared with its peers,” the ratings agency said. Sears.com did particularly badly in the recent ForeSee holiday online shopping customer satisfaction survey. It ranked sixth from the bottom out of the 40 companies on the list. The American Customer Satisfaction Index for Department and Discount Stores also ranked Sears near the bottom of the list, along with Kmart.

10. Netflix

Netflix (NASDAQ: NFLX) had one of the highest customer satisfaction ratings of any large consumer-facing company a year ago. Its stock traded at an all-time high of $305 and has dropped to $90 in less than six months. One of the primary causes was the raising of customer rates by 60% last August. The move caused the loss of 810,000 subscribers, according to the company’s third-quarter earnings report, and set off a firestorm of customer complaints. CEO Reed Hastings said at the time that the cancellations would continue until “the price effect washes through.” The final damage done to the company is incalculable. It had ranked number two on the list of ForeSee’s online retail quality list a year ago, just behind Amazon. It fell to 18th place in this year’s survey. Netflix shares were among the greatest losers on Nasdaq last year. The stock shed 62% of its value, virtually all in the final four months of the year.

Douglas A. McIntyre
RSS Facebook Twitter