After two years of continual growth, the American Customer Satisfaction Index (ACSI) declined in Q3 2007. At a score of 75.2, ACSI is down 0.1% compared with the previous quarter.  This is a very small drop with the overall score still 1% above where it was a year ago.

Rising prices for food products are the major cause for the ACSI decline. The ACSI score for food producers declined by 2.4% and by 1.3% for cigarettes.

Customer satisfaction is up for most other non-durables, including athletic shoes (+3.9%), apparel (+2.5%), pet food (+1.2%), beer (+1.2%), and personal care products (+1.2%). Although most industries improved this quarter, it wasn’t enough to offset the ACSI decline in food manufacturing, the largest sector in consumer non-durables.                    

“The dip in ACSI is largely attributable to higher food prices, and despite employment growth and holiday discount pricing, consumer spending is unlikely to match last year’s fourth quarter growth,” said Professor Claes Fornell, head of ACSI at the University of Michigan.

Customer satisfaction remains high and the decline in the quarter is small and limited to food and cigarettes.  The ACSI equations predicted a spending increase of 3.1% for the third quarter; the Commerce Department reported actual spending growth was 3.0%. For the fourth quarter of 2007, the ACSI forecasts spending growth of 2.5%.