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Metropolitan New York, Long Island, and the Mid-Hudson Region
BBB Reports Americans’ Trust in Business has Dropped in 13 of 15 Industries Examined
August 26, 2008

Consumers Say Least Trusted are Auto Dealers and Real Estate Brokers, but Banks are Quickly Losing Consumers’ Trust

New York, NY – August 26, 2008 – Better Business Bureau announced findings from its second BBB/Gallup Trust in Business Index survey, noting American consumers say in a seven-month period their trust in businesses has fallen in 13 of 15 industries measured, with an overall composite Index decline in consumer trust of 14 percent. And nearly half (47 percent) of those surveyed say they have only “some, very little or no trust at all” in companies they do business with in everyday life.

The survey and Index, which measure consumer trust in businesses that they regularly deal with, were commissioned by BBB and conducted by Gallup. Based on its findings BBB will organize a business forum, ultimately geared toward reversing the current downward trend in trust between consumers and businesses. The BBB Forum will bring together a broad cross-section of senior leadership from across industries examined in its survey, including representation from small and medium enterprises, as well as multinational corporations doing business in North America.

“With less than one-third of American consumers reporting having a ‘great deal’ or ‘quite a lot of trust’ in 11 of the 15 industries cited in this survey, this question of how to turn this around is one every business should be considering very carefully,” said Claire Rosenzweig, President and CEO of the Better Business Bureau Serving Metropolitan New York. “Consumer trust has dropped 14 percent overall since the survey was first conducted last year, and businesses should consider these results a wake-up call to take action.”

The first BBB/Gallup Trust in Business survey was conducted in September 2007; the second in April 2008. Consumers were asked to indicate their degree of trust in businesses using six categories: A Great Deal of Trust, Quite a Lot of Trust, Some Trust, Very Little Trust, No Trust or Don’t Know.

From the first to second survey, nine industries had a 10 percent or more drop in the combined “A Great Deal of Trust” and “Quite a Lot a lot of Trust” grouping, including:

  • Auto Dealers : -19 percent
  • Real Estate Brokers: -19 percent
  • Department Stores: -16 percent
  • Gas Stations: -15 percent

Another nine industries experienced a greater than 10 percent increase in the combined “Very Little Trust” and “No Trust” grouping, including:

  • Home Improvement Stores: +33 percent
  • Banks, financial institutions and stock brokers: +30 percent
  • Department Stores: +27 percent
  • Gas Stations: +27 percent

Department Stores and Gas Stations ranked in the top four in both the “Most Trusted” (dropped) and “Least Trusted” (gained) groupings. And only the Banks, Financial Institutions and Stock Brokers segment saw a greater than five percent change in the actual percentage of consumer responses in both the “Most Trusted” (dropped) and “Least Trusted” (gained) groupings.

“A Great Deal of Trust” + “Quite a Lot of Trust” = Most Trusted Grouping:

Key Industry Segments

Survey II – 4/08 Percentage of Respondents

Survey I – 9/07

Percentage of Respondents

Total Percentage Change –

From Survey I to II

Pharmacies and Drug Stores

59

65

-9%

Grocery Stores and Supermarkets

55

59

-7%

Banks, Financial Institutions and Stock Brokers

42

48

-12%

Home Improvement Stores

41

46

-11%

Office Supply Companies

33

34

-3%

Department Stores

31

37

-16%

Electronics and Appliance Stores

28

29

-3%

Health Care Insurers

26

26

0%

Contractors

24

27

-11%

Auto Repair and Maintenance Shops

24

27

-11%

Cell Phone and Wireless Service Providers

23

21

+9%

Gas Stations

22

26

-15%

Furniture Stores

19

22

-14%

Real Estate Brokers

13

16

-19%

Auto Dealers

13

16

-19%

Total Number of Adult Americans Surveyed

1003

1204

“Very Little Trust” + “No Trust” = Least Trusted Grouping:

Key Industry Segments

Survey II – 4/08 Percentage of Respondents

Survey I – 9/07

Percentage of Respondents

Total Percentage Change –

From Survey I to II

Auto Dealers

48

47

+2%

Real Estate Brokers

41

36

+12%

Health Care Insurers

37

37

0%

Cell Phone and Wireless Service Providers

32

32

0%

Auto Repair and Maintenance Shops

34

31

+10%

Gas Stations

30

22

+27%

Contractors

27

24

+11%

Banks, Financial Institutions and Stock Brokers

20

14

+30%

Furniture Stores

20

19

+5%

Electronics and Appliance Stores

14

13

+7%

Department Stores

11

8

+27%

Office Supply Companies

9

7

+22%

Home Improvement Stores

9

6

+33%

Pharmacies and Drug Stores

7

6

+14%

Grocery Stores and Supermarkets

5

4

+25%

Total Number of Adult Americans Surveyed

1003

1204

“In a time of rising prices and concerns about energy, consumers are becoming more wary,” said Rosenzweig. “Although this recent decline in trust is significant and can be a hurdle for businesses, it is not insurmountable. It’s been shown that Trust and business profitability go hand in hand, so businesses should listen when for example, many consumers say it would be helpful for businesses wishing to rebuild trust in the marketplace to be proactive and allow credible third parties to evaluate their performance.”

When asked what factors affect their trust in businesses, 77 percent of consumers cited increasing prices of food, healthcare and energy as having major negative impacts. Seventy-seven percent also said the actions of our nation’s most important companies affect the trust they have in businesses they deal with every day.

When asked what would strengthen their trust in businesses surveyed, 86 percent of respondents said it would be “very” or “somewhat” helpful for businesses to allow credible third-party assessment of their performance. In contrast, only 58 percent said having government more actively involved in regulating performance would be “very” or “somewhat” helpful.

Demographic data shows consumers with no college education drove down trust levels in seven of 15 industries. As for gender, women specifically cited declining trust in Home Improvement and Department Stores, whereas men noted low degrees of trust in Pharmacies and Drug Stores, and Banks, Financial Institutions and Stock Brokers.

About the Survey Methodology

These findings are part of the ongoing BBB/Gallup Trust in Business survey. Gallup fielded the survey March 26 to April 20, 2008. The sampling included 1,003 respondents, 18 and older, randomly selected from across the U.S. The overall sampling error in the results is plus or minus three percentage points. For findings based on subgroups within the overall population, the margin of sampling error would be greater.

About BBB

BBB is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. BBB provides objective advice, free business BBB Reliability ReportsTM and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust. To further promote trust, BBB also offers complaint and dispute resolution support for consumers and businesses when there is difference in viewpoints. The first BBB was founded in 1912. Today, 125 BBBs serve communities across the U.S. and Canada, evaluating and monitoring nearly 4 million local and national businesses and charities. Please visit www.bbb.org for more information about BBB.

About Gallup

For more than 60 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people’s attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup’s current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.