Record profits, terrible service: something’s got to give for US consumers

Consumers are bearing the brunt of sweeping developments in the business landscape. Illustration: Guardian Design / Getty ImagesView image in fullscreenConsumers are bearing the brunt of sweeping developments in the business landscape. Illustration: Guardian Design / Getty ImagesConsumedBusinessRecord profits, terrible service: something’s got to give for US consumersExperts say consolidation and market power have left consumers paying more for less

When Delta Airlines charged Marie Duggan, an economic historian visiting Oaxaca, Mexico, $1,200 to change a scheduled flight to the United States, she was so angry she cancelled and booked a cross-border nighttime bus ride instead.

Duggan thought Delta’s price increase to fly to Phoenix instead of San Francisco, at twice the price of a one-way flight to Phoenix, was an insult and a rip-off. So she took a $250 flight on Aeromexico to Hermosillo, in the north-western state of Sonora, and then a $59 bus across the Mexico border.

Sonora is on the US tate department’s ‘reconsider travel’ list because of terrorism and crime, Duggan acknowledged, and she was “exhausted” after the trip. But she was also pleased not to have to pay Delta the money. “I thought, ‘Ha! You think I have no choice, but I know that there is a bus,” she said in an interview. “So I will slip out of your grasp.”

For the past 100 years, US consumers have powered the US economy, their $21tn in annual spending supported by the business ethos that the “customer is king.” Today, that idea is as outdated as a Norman Rockwell painting, say consumer activists, historians, analysts, executives and customers themselves.

Instead, consumers are bearing the brunt of sweeping developments in the business landscape. Decades of mergers have limited consumer options. Companies are so big they can push industry-friendly regulation and charge what they want, safe in the knowledge that disgruntled customers have nowhere to go.

No wonder consumers feel so squeezed, disrespected and preyed upon. As a result, they are becoming “reactive”, said Alexander DePaoli, a Northeastern University marketing professor who studies consumer anger. They’re starting to see brands as “a rival or an adversary” and are trying to beat them at their own game.

The power dynamics are out of whack, though, that dangerous bus rides and product boycotts are no answer. A broader fix may be necessary if the United States is to return to its customer service glory years.

“Asking why [companies] went ‘bad’ is like asking why a company that sells reasonably priced goods on the near side of the TSA checkpoint is charging $15 for water on the far side of the TSA checkpoint,” at an airport, said Cory Doctorow, author of Enshitification: Why everything suddenly got worse and what to do about it. “It’s not because they’re evil, it’s because you can’t go anywhere else to buy your water.”

A feeling of forever being ripped off helps explain why consumers have never felt more pessimistic, even though the US economy, by the numbers, continues to perform well.

US consumer sentiment, tracked for over 60 years by the University of Michigan, has hit a new low, thanks to cost-of-living increases many say are eroding their personal finances.

At the same time customer complaints about goods and services are at record levels, and surged 16% in the first quarter, according to the university’s American Consumer Satisfaction Index, which has tracked the figure since 1994.