Quantity Surcharges: Are They Important in Choosing a Shopping Strategy?

Instead of making value-price comparisons for all members of a product set, consumers may decide to adopt simple purchase decision rules such as larger sizes are better buys. When the unit price of a larger size is greater than the unit price of a smaller size, a quantity surcharge exists. Previous research has established that consumers do frequently encounter quantity surcharges in purchasing grocery products. However, estimates of the amount of the surcharge, the goal of this research, have not previously been reported. In this study the expected return from using the larger-size rule was estimated. The estimation procedure made use of price and size information gathered for all available packages of 23 products sold in 15 grocery stores in one rural Illinois community in October 1981. Nineteen of the 23 grocery products were found to have surcharges, with the mean amount ranging from less than one cent to 65 cents. Tuna fish was the only product for which the expected value of the return from buying a larger size rather than a smaller size was negative. Implications for consumers' choice of shopping strategies are discussed.     

Increasing Price Transparency: Implications of Consumer Price Posting for Consumers' Haggling Behavior and a Seller's Pricing Strategies

In an attempt to gain a better position in haggling, consumers often seek a seller's pricing information (e.g., whether the posted price is negotiable, the discount and transaction prices) before going to that seller. Although traditionally difficult to obtain, such information is becoming increasingly available due to consumer price posting (CPP), whereby consumers post and share their purchase price information on the Internet. In this analytical study, we consider a market in which a seller, who chooses between a fixed price policy and a haggling policy, serves two types of consumers who differ in their willingness to pay and haggling costs. We explore how CPP can affect consumers' behavior and the seller's pricing strategies (i.e., pricing policy and the associated prices). In the absence of CPP, our model features a two-sided uncertainty: the seller does not know individual consumer's type and thus may find it optimal to use a haggling policy to price discriminate consumers, whereas consumers do not readily observe the seller's cost type and pricing policy, and thus are uncertain whether their haggling will be fruitful. In the presence of CPP, consumers' uncertainty about the seller's pricing policy is resolved. Because CPP can improve price transparency, inhibit consumers' acceptance of a posted price and spur price haggling, it seems apparent that it should benefit consumers and hurt the seller. However, our analysis shows that CPP can lead to fewer purchases, higher prices and even a greater seller profit. It further shows that although CPP surely increases information accessibility, it can also reduce the amount of information available to consumers. These results are in sharp contrast to the conventional wisdom in the literature.     

Predicting Consumers' Preferences for and Likely Buying of Local and Organic Produce: Results of a Choice Experiment

Data from consumer intercept surveying and a hypothetical choice experiment conducted in 11 Albuquerque, New Mexico, USA grocery stores were used to predict consumers' preferences for and likely buying of local and organic produce. Results indicate that consumers strongly prefer produce with local and/or organic attributes, but are generally less likely to buy produce with these attributes. Consumers' sociodemographic characteristics, knowledge of different produce types, distance traveled for food shopping, and metro-area location affected preferences and likely buying behavior. These results will help local farmers in New Mexico and other states improve their competitiveness, preserve agricultural traditions, and contribute to economic development.     

Consumer Acceptance of Item Price Removal: A Survey Study of Milwaukee Shoppers

A survey was conducted of 193 Milwaukee food shoppers to determine their experiences and opinions relating to item price removal (IPR) in supermarkets. The principal findings were that opinions of IPR were related to experiences with shopping in IPR environments, extent of price comparison behaviors, and certain demographic variables. Most of the respondents thought retailers should supply a price-marking instrument to shoppers. A majority of the respondents who had not shopped in an IPR store said they would switch stores if their current store removed prices. However, only one-quarter of the respondents who had shopped in an IPR store changed stores and price removal was of secondary importance in this decision. Overall, respondents were evenly split on the need for legal controls in IPR, but respondents who had not shopped in an IPR store and who were from disadvantaged households (with regard to age, income and/or education) were more likely to see a need for legal controls. The findings of this study and ones conducted in other cities suggest that the primary public policy issue is not whether or not item prices should be removed. Rather, the issue is what is the best method of providing shoppers with price comparison information.     

Price image consequences

This study investigates the consequences of price image. Two conditions, a policy of intermediate price condition and a policy of low price condition, were distinguished in an experiment. Three moderators (consumers' price conscientiousness, retailer's motives perceived by consumers and consumers' familiarity with the retailer) were considered for these two conditions. Using partial least squares analyses (PLS), we propose integrated models of the consequences of price image highlighting the direct and indirect effects of this concept on consumers' satisfaction, trust, attitude and future behavioral intentions to the retailer. This research fills a gap in the literature since previous studies have mainly focused on the antecedents of price image or have only investigated specific links between the variables considered. Finally, considering our findings, we recommend to managers to favor either a policy of intermediate or low price depending of their consumers' characteristics.     

Age Differences in Response to Grocery Store Price Information

The study reported here investigated age differences in consumer response to grocery store price information. A sample of 160 female consumers shopped for twelve grocery products in a simulated store. Following the shopping task, subjects responded to an unannounced memory performance test requiring them to recall the prices of products on the shelves. Respondents' methods of encoding information and certainty regarding recall were also recorded. Analysis revealed age differences in usage of price information, in recall of product prices, and in certainty experienced by shoppers. Hypothesized age differences in the encoding of information did not surface. Discussion centers on the policy implications of these findings.     

Shopping orientations as antecedents to channel choice in the French grocery multichannel landscape

This paper investigates the influence of consumer shopping orientations on grocery channel attractiveness and choice. It extends the concept of shopping orientation (utilitarian and hedonic) to account for emerging motivations among French consumers: shopping in line with sustainable and ethical values. In doing so, it helps profile segments of consumers who choose to shop through new online channels (Drive through) and newly deployed store formats (city stores). A sample of 300 French customers, responsible for shopping in the household, was surveyed. Hypotheses were tested through Latent Class Analysis and Structural Equation Modeling with categorical outcomes. Our findings indicate that consumers shopping orientations influence the way consumers will combine the different channels and store formats for grocery purchase. In particular, our results highlight the importance of responsible retail practices and ethical assortments in consumers' choice of online formats whilst local product orientation influences the choice of city stores and market places.     

A study of the impact of Corporate Social Responsibility and price image on retailer personality and consumers' reactions (satisfaction,trust and loyalty to the retailer)

This study investigates the impact of a retailer's Corporate Social Responsibility (CSR) policy and its price image on retailer personality, along with the impact of these two variables on the consequences of retailer personality: consumers' satisfaction, trust and loyalty toward the retailer (measured by their attitude and future behavioral intentions). Data were collected on a convenience sample of 352 consumers of a French grocery retailer. Using Partial Least Squares analysis (PLS), we show that perceived Corporate Social Responsibility and price image have a significant positive/negative influence on retailer personality traits (“agreeableness” and “conscientiousness”/“disingenuousness”) and that Corporate Social Responsibility has also a significant positive influence on the “sophistication” personality trait. For the consequences examined (satisfaction, trust and loyalty to the retailer), we show that Corporate Social Responsibility, price image and retailer personality have a direct or indirect impact on these dependent variables.     

The relevance of shopper logistics for consumers of store-based retail formats

This paper discusses and empirically evaluates the relevance of shopping-related logistics for consumers of store-based retail formats. Based on a literature review a conceptual model was developed and subsequently tested using a survey of more than six hundred consumers in the grocery retail sector. Respondents were those primarily responsible for grocery shopping in their households located in a highly concentrated European urban retail market. Variance based structural equation modelling reveals that shopper logistics has a major impact on the convenience of store-based shopping and partly influence consumers' perceptions of shopping related costs. Nevertheless, shopper logistics does not affect consumer behaviour in terms of the share of visits of a store. These results are moderated by age, hedonic shopping orientation, shopping frequency, average spending per trip and store format preference. We conclude that shopper logistics is relevant for consumers of grocery stores but its relevance varies between different shopper groups.     

The influence of need for closure and perceived time pressure on search effort for price and promotional information in a grocery shopping context

Need for closure (NFC) is introduced as a variable of individual difference that shows promise to help the understanding of a consumers' effort to search for price and promotional information in the context of retail grocery shopping. Results showed that NFC and perceived time pressure (PTP) are important determinants of search effort for price and promotional information (e.g., searching for coupons, looking for in‐store promotions, switching stores to find lowest prices, and comparing unit prices). Moreover, an interaction effect was found between NFC and PTP. Future research and theoretical and practical implications are discussed. © 2005 Wiley Periodicals, Inc.     

Double couponing: Pricing and consumer perspectives

Many supermarkets double manufacturer coupens. Are consumers' grocery bills lowered as a result? Our study of two double coupon supermarkets shows that for every ten cents of double-coupon value redeemed, the corresponding shelf price at a double coupon supermarket is higher by an estimated 3.5 cents compared to the price at other supermarkets. Given the higher shelf prices, the data also suggest that the majority of customers do not save money at double coupon stores, and adjust their shopping to account for the retail promotion.     

The Impact of Comparative Food Price Information on Consumers and Grocery Retailers: Some Preliminary Findings of a Field Experiment

There is reason to believe that consumers face a difficult task in securing adequate and accurate information upon which to judge relative price levels of competing foodstores. The objective of the research reported here was to investigate the potential of retail food price reporting for correcting this information problem. Both consumer and grocery retailer responses to this comparative food price information were analyzed. A pretest-post-test design with four pairs of experimental-control cities (with replications at two levels of concentration) was employed to collect price data. A modified Solomon-four group design was used for surveys of food consumers in experimental and control cities. The results of analysis of variance models lend support to the hypothesis that price reporting can lower the relative level of food prices, both for items individually identified in a price report and items not identified in the report. The magnitude of this effect varied among the cities. It appears that consumers' role in this experiment was a passive one: consumer behavior and patronage patterns did not change in a manner that would consistently reinforce the competitive effects of the price reports.     

Analysing consumers' ‘activism’ in response to rising prices

The purpose of this paper was to compose the profile of active consumers in Greece during a period of rising prices taking into account shifts in their consumption. A survey was conducted from 1 September 2008 to 21 November 2008 to collect the primary data source for the study. Questionnaires were administered to 200 consumers. To our knowledge this was the first attempt to offer insight into the characteristics of the Greek consumer in a period of economic crisis. For this purpose, econometric analysis was employed. Empirical results suggested that high‐income groups spend more for food commodities and are less likely to be active consumers. It was concluded that consumers have reduced spending for some basic and semi‐luxury products like fruits, meat, alcohol, sweets and coffee, and entertainment activities. The main factor which affected the reaction to price increases, as expected, was the monthly private income. Twenty per cent of the consumers are members of a national consumer movement organization, and support their actions against rising prices. Women, who research the market before purchasing a product, are more likely than men to participate in economic boycotts. By examining the profile of non‐active consumers and the reasons for their behaviour, we are able to propose a policy for the activation of the Greek consumer movement, which is necessary for the consumers' resistance to rising prices. Taking into consideration that Greek consumers face increased prices for food commodities and services, a policy framework to activate consumers is among the main prerequisites for maintaining consumers' well being. We suggest that the Greek Consumer Protection Institutes should regain consumers' confidence and focus on the dissemination of information about organized economic boycotts.     

Price image and the sugrophobia effect on luxury retail purchase intention

Consumer shopping behavior in luxury retail stores continues to be a subject of interest among marketing researchers. Such a phenomenon has led us to explore how price image and sugrophobia, a psychological feeling of being taken advantage of, would influence consumers' future behavioural intention in the context of luxury retail store. Informed by a survey of 400 consumers, this study adopts the Stimulus-Organism-Response (S–O-R) model to examine how price image triggers consumer perceptions (i.e., perceived value, trust and attitude) and results in behavioral intention. Sugrophobia is included in the S–O-R model to assess its moderating effect. Data analysis using SEM-PLS demonstrates that a retailer's price image has a positive effect on consumers' perceived value, trust, attitude, and future behavioral intention. Sugrophobia, in turn, is found to weaken the relationship between price image and consumer perceptions. The study thus highlights the relevance of sugrophobia among risk-averse consumers and the necessity to manage sugrophobic consumers effectively in the context of a luxury retail store. Implications of the study are discussed.     

The effect of product touch information and sale proneness on consumers' responses to price discounts

Since price discounts are costly and can negatively affect consumers' perceptions of quality, it is crucial to identify the factors that make them effective in stimulating purchase behavior. Drawing on cue utilization theory, we examine price discount effectiveness in affecting consumers' reliance on the sale cue based on the provided product touch information as an intrinsic cue and individual consumer differences in sale proneness. Two experimental studies indicate that price discount information, product touch information, and sale proneness interact to determine consumers' responses. Perceived quality is the underlying mechanism behind the observed effects. For nonsale-prone consumers, product touch information favorably influences responses to large price discounts by addressing product quality concerns and enhancing purchase confidence, but has no effect for regularly priced or low discounted products. For sale-prone consumers, product touch information is not effective in increasing their responses regardless of the discount size. A qualitative study provides support for these results and highlights the role of perceived quality and purchase confidence. The research contributes to behavioral pricing, cue utilization theory, and sensory marketing and suggests that marketing managers should provide consumers with product touch information when implementing high discounts for products for which prepurchase touch is important.     

Product involvement in organic food consumption: Does ideology meet practice?

This study assesses the level of consumers' felt involvement in four distinct product categories of organic food (coffee, bread, fruit, and flour), and examines the role of felt involvement in the broader context of organic food shopping behavior. It is shown that the reason why consumers do not buy organic food regularly despite their positive attitudes is that such ideologically formed attitudes are not present in habitual, low‐involvement shopping activities with limited problem‐solving needs as in food shopping from grocery stores. The statistical analysis of an empirical sample of 200 consumers gives substantial support to the hypothesized new organic food buying behavior model. © 2009 Wiley Periodicals, Inc.     

Impact of movie-watching on cross-selling revenue in shopping malls: Implications for post-pandemic recovery

The COVID-19 pandemic has prompted consumers to postpone in-store purchases and shift to online shopping, decreasing overall retail spending. As the global lockdown eases and shoppers return to offline stores and malls, shopping malls seek to facilitate in-store consumer experiences at entertainment facilities. Given the importance of entertainment facilities to the cross-selling revenue of shopping malls, we investigate the relationship between consumers' movie-watching and subsequent (hedonistic) grocery purchases. Our analysis of a panel database that includes transaction details at the consumer level shows that movie-watching is negatively correlated with consumer spending. Furthermore, consumers’ psychological states induced by content and contextual factors moderate the negative effect of movie-watching; after watching a fantasy (as compared to thriller) genre or watching a movie in a less crowded theater, consumers are more likely to make hedonic purchases at the supermarket. These findings provide theoretical and managerial implications for retail operators exploring cross-selling opportunities post-pandemic.     

Economies of scale in grocery retailing in Finland

This paper considers the question of store-level economies of scale in grocery retailing. Hedonic price and cost functions are used in modelling the price and cost structure of retailers, but without making the assumption of constant mark-ups, as normally done in hedonic price studies. The main result of the paper is that store-level economies of scale do exist in grocery retailing: large stores have on average 10% lower costs per sold unit than small stores. The second major finding is that most of the benefits from scale economies are passed on to consumers: the price level of large stores is 10% lower on average than of small stores.     

Impact of personalization and privacy concerns on information disclosure and pricing

Advances in IT have enabled some firms to offer personalized products according to the private information disclosed by consumers, while others are still offering standardized products, which brings about asymmetric competition. For consumers, disclosing private information for personalized products leads to reduced misfit cost as well as privacy loss. To illuminate the impact of consumers' trade-off between the benefit of information disclosure and the associated privacy concerns on firms' asymmetric price competition, we consider a setting where only one firm is capable of product personalization based on consumers' personal information. The capable firm makes a profit from selling the product and monetizing consumers' information. We demonstrate that as the capable firm becomes more adept at personalization, he may raise or lower the price depending on his profit foci, and an improvement in his capability does not always guarantee a higher profit. Counterintuitively, an increase in the unit misfit cost (i.e., greater product differentiation) can, under certain circumstances, intensity price competition, making both firms worse off and leading to higher consumer surplus. We also show that when consumers are more privacy-concerned, there exists an indirect effect that weakens the impact of an increase in price on the monetization of consumers’ information, and hence price competition can be mitigated and both firms can be better off. Furthermore, we demonstrate that product personalization with misfit-reducing effect always increases consumer surplus under the asymmetric competition. Our findings provide firms and policy-makers with great managerial insights.     

Antecedents and Implications of Expiration Date Search Effort

When consumers search for and check expiration dates, the risk of purchasing and consuming a stale and denigrated quality product reduces. Since checking expiration dates has a significant impact on consumers' purchase and consumption decision making, the authors investigate what motivates consumers to search for expiration dates while shopping for and before consuming perishable grocery products. This research adapts and extends the information search model (Schmidt and Spreng 1996) by providing new insight on information search as not only a prepurchase but also a consumption stage activity. Findings suggest that expiration date search effort is influenced by perceived risk, time pressure while grocery shopping, and the motivation of checking expiration dates. These findings provide several implications for consumers and policymakers.