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Costco wins popularity contest

By Chavon Sutton, staff reporter

NEW YORK (CNNMoney.com) -- Costco is the best place to shop in the United States in terms of prices, value and shopping experience, according to a recent survey of Consumer Reports' readers.

The magazine's annual America's Top Stores survey asked 30,666 of its readers questions about prices, value, quality of merchandise and overall shopping experience at 11 of the nation's most popular retailers, which included Wal-Mart (WMT, Fortune 500), Costco (COST, Fortune 500), Sears (SHLD, Fortune 500) and Macy's (M, Fortune 500).

Costco was rated No. 1 overall, with a score of 85 on a scale of 100. In addition to its low prices, the warehouse store scored top marks in the value category, with 50% of those surveyed rating it "excellent." It was also one of only four chains whose merchandise quality was rated "outstanding."

"In our surveys over the years, Costco has earned high marks as a source of a surprisingly large selection of goods, including mattresses, electronics, small appliances, groceries and books," said Tod Marks, senior project editor at Consumer Reports in a prepared statement.

Department stores Dillards (DDS, Fortune 500), Kohl's (KSS, Fortune 500), JCPenney (JCP, Fortune 500) and Target (TGT, Fortune 500) rounded out the top five. Conversely, Wal-Mart, the world's largest retailer, and Kmart, a division of Sears, were last on the list.

With over $99 billion in sales during the first quarter of its current fiscal year, Wal-Mart maintained its position as a powerhouse retailer. But the retail giant did not have an impressive showing in the survey.

The self-proclaimed price leader was knocked for prices, with survey respondents saying Wal-Mart wasn't that much of a bargain compared to the 10 other retailers.

Consumer Reports also asked readers about service issues, including checkout gridlock, spotty sales help and cluttered stores. Some 58% of shoppers noted at least one problem with their shopping experiences, and 33% reported two or more problems.

Wal-Mart was ranked lowest in terms of overall customer experience, along with Kmart.

Customers also weren't sold on Wal-Mart's merchandise - the discounter was the only chain to receive below-average quality scores in over half of the survey's product categories, including apparel, jewelry and electronics.

Sam's Club, a member-only division of Wal-Mart with which Costco directly competes, was sixth on the list, outscored by higher-ranked stores in terms of overall product quality, value and service.

"Most customers will give you great satisfaction marks if you exceed their expectations, and Costco is light years ahead of the other discount competitors in that respect," said Will Ander, senior partner for retail-consulting firm, McMillanDoolittle, in a statement.

Although Costco topped the survey overall, it shared one dubious distinction - tied with Sam's Club, Wal-Mart and Kmart for having the worst checkout headaches. To top of page

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