Shoppers Spooked by “Witches Brew” of Economic Factors

The U.S. economy is facing a tsunami economic problems, including increasing customer-switching costs and complaints and stagnating satisfaction. Despite that, customer defections to other retailers are down, the just-released American Customer Satisfaction Index (ACSI): Quarter 4, 2025 found.

“Paradoxically, these are not signs of a healthy economy,” notes the index, which draws responses from 200,000 customers.

Explains Claes Fornell, ACSI founder Distinguished Donald C. Cook Professor (Emeritus) of Business Administration at the University of Michigan: “In well-functioning markets, buyer satisfaction and seller profits move together. When seller profits increase without a corresponding rise in buyer utility, it is an indicator of market inefficiency. Decoupling seller profit from buyer satisfaction impedes economic growth and slows innovation.

“Buyer surplus stagnates and inflation accelerates. Escalating M&A activity, without a corresponding increase in antitrust enforcement, has compounded the problem. Tariffs have had a similar effect by discouraging international competition.”

Among what ASCI described as the “witches brew” facing the U.S. economy are such macroeconomic factors as compounding market concentration, increasing seller pricing power and higher buyer-switching costs. At the micro level, the group points to irrelevant performance metrics and data-discordant analytics, which have made resource allocation for strengthening customer relationships next to impossible.

Click here for more from the ASCI survey.