Consumer observations on channel choices—Competitive strategies in Finnish grocery retailing

This article aims at providing consumers’ observations on their choices between various grocery retailing channels. The theoretical roots are based on Porter's competitive strategies and their further developed variations, but also the retailing research concerning competition and consumer perspective will be discussed. The results of the study confirm that consumers have one primary store, which is often a hypermarket or a supermarket. In addition, they prefer to shop in several supplementary stores located close to their homes. The empirical study also reveals that all retail channels have both weaknesses and strengths from the consumers’ viewpoint.     

Understanding consumers’ perceptions of competitive tiers—can perceived risk help?

A review is presented showing the increasing power of multiple grocery retailers from which an argument is developed questioning whether consumers perceive packaged grocery product fields in terms of brands versus own labels versus generics. Consumers’ perceptions of risk are reduced through information search and it is thought that the different search activities between the high and low risk perceivers may explain perceptions of the competitive structure of product fields. For six packaged grocery fields, separately, qualitative research was undertaken to elicit the dimensions consumers use to evaluate competing items. Data was then collected from 829 householders and was subsequently subjected to cluster analysis. Consumers’ perceptions of the competitive structure of product fields differed from marketers’ expectations and brands were always perceived as being distinct from retailer labels. The result did not appear to be influenced by consumers’ perceptions of risk. Reasons for the result are considered, and managerial implications explored.     

Retailing in the Transition Economies of Poland and Romania: A Comparative Analysis

This research compares and contrasts the current state of development in the retailing industry in the transition economies of Poland and Romania. Two issues examined in this research are (a) the process of market reforms and resulting developments in store-based and non-store retailing, including the competition among large multinational retail chains and small local retail stores, and (b) the structure of the retail industry in terms of market share of 17 different categories of retailers within their respective sectors, namely, grocery retailers, specialty retailers, and non-store retailers, and overall growth registered by these retailers in the last 5 years (2004–2009). Managerial implications of the findings in terms of the opportunities and challenges in different categories of retailing business in the two countries are discussed, and directions for future research are identified.     

‘Online Omnivores’ or ‘Willing but struggling’? Identifying online grocery shopping behavior segments using attitude theory

The landscape of grocery shopping is changing fast. Online retailing via home delivery or ‘click and collect’, convenience stores and various hybrid shopping channels are gaining popularity with some consumers, but not with others. The central premise of this paper is that focusing on the ‘average grocery shopper’ is not very helpful if the objective is to understand recent and future changes in grocery shopping. There are few recent studies that have identified groups of individuals using online and multi-channel shopping by considering both observable behavior and associated attitudes – feelings, beliefs, opinions and behavioral dispositions – and by drawing explicitly on attitude theories from social psychology. The current paper thus aims to identify and describe groups of grocery shoppers using a psychographic segmentation approach that is explicitly grounded in the Theory of Planned Behavior (TPB) (Ajzen, 1991) and its close cousin, the Technology Acceptance Model (TAM) (Davis et al., 1989). Primary data were collected through a self-completion questionnaire that produced a largely representative study sample of 2032 grocery shoppers across the United Kingdom, Europe's largest market for online grocery shopping. A principal component and two stage cluster analysis methodology was implemented to identify five well-defined and highly interpretable segments according to their attitudes, norms, perceptions and beliefs, then profiled by their socio-economic and grocery shopping characteristics. The segments reveal a range of different grocery shopping preference levels, from those ‘super-shoppers’ (Flynn and Goldsmith, 2016) who are clearly attracted to the online experience and want more (‘Intensive Urbanites’, ‘Online Omnivores’) to those who appear resistant and socially responsible towards the adoption of online shopping services (‘Resisting and Responsible’). The key distinguishing features of these segments suggest that shoppers might be attracted to or repelled from online shopping for reasons of convenience, perceived benefits, costs and risks, technology affect, time pressures and fit into daily schedules (perceived behavioral control), as well as social and environmental dimensions of personal norms and beliefs.     

MEASUREMENT OF GROCERY PRICES: SOME METHODOLOGICAL CONSIDERATIONS AND EMPIRICAL RESULTS

This paper examines some methodological issues in the design and execution of food price surveys, and presents findings from a recent survey of fifty-eight grocery stores in the Cardiffarea. The methodology discussed includes the design of samples of goods to be surveyed (the ‘shopping basket’), of shops in which grocery prices are to be measured, and derivation of the shop-price matrices to be used in analyses of grocery pricing strategies. The empirical results show, as expected, significantly cheaper prices in multiple and co-operative stores compared with independent and affiliated. No significant difference is found between the latter categories of store. There is limited support for the hypothesis that the larger the store the lower the prices. Prices measured in the Cardiff area are also compared with average ‘shopping basket’prices derived from a national survey carried out concurrently by the Consumers' Association. Finally, the value to the researcher of ‘one-off’ price surveys is assessed.     

Applying multiple regression analysis to the forecasting of grocery store sales: an application and critical appraisal

Multiple regression analysis is applied to an analysis of the trading performance of a chain of grocery stores in the north-east of England. The performance of stores outside the conurbations is shown to be related to characteristics of the OPCS ‘urban-areas’ in which the stores are located, and a way is presented of modelling the effect of competition from within and outside these centres.

A high degree of statistical explanation is achieved, and the methodology used is defended against criticisms that can be levelled at many of other multiple regression analyses of store performance. Caution is nevertheless advised against the application of the model to forecasting the performance of new stores, although a range of applications are suggested whereby the implications of changes in the trading circumstances of existing stores might be examined.     

Win–win strategies at discount stores

An important development that contributes to store brands’ growing success in the grocery market is the increasing number of discount stores that sell predominantly own, private-label (PL) brands. To fight PLs, manufacturers of national brands (NB) feel increasingly compelled to develop better trade relations with discounters. Some discounters, for their part, are looking for opportunities to differentiate themselves, and to move beyond a pure price-based competition, by extending their assortment with attractive NBs. In this study, we determine what factors drive NB success at discount stores, and lead to positive outcomes for both the manufacturer and the discounter.     

International Comparisons of Supply Chain Management in Grocery Retailing

This paper discusses a neglected area of international retailing research, namely an international comparison of supply chain management practices. The focus of this research is on the grocery industry sector and the comparative analysis is between US retailers and their counterparts in parts of Europe. The research shows that the logistical environment differs markedly between and even within countries. The amount of stock held in the grocery supply chain varies from over 100 days in the US to 29 days in the UK. The main reasons for these differences can be attributed to the intensity of price competition, conflict rather than collaboration between suppliers and retailers, commodity purchasing and holding of promotional stock and the varying rates of adoption of information technology, especially EDI usage. No two countries are the same, however; and range of factors such as geography and distribution ‘culture’ will require the international rnarketeer to assess all these factors in developing a logistics strategy for different country markets.     

Intertype competition: specialty food stores competing with supermarkets

Empirical findings are presented in this paper concerning the competitiveness of specialty food stores when competing with supermarkets. Taking both a specialty food store-oriented perspective and a consumer-oriented perspective, the obtained results of two quantitative studies suggest that specialty food store managers’ and consumers’ evaluation of the importance of various store choice factors are quite similar. Additionally, specialty food store managers show highly positive expectations towards future intertype competition with supermarkets.     

Studying patterns of consumer's grocery shopping trip

Previous research on (grocery) shopping trips has focused on studying the relationship between shopping frequency and shopper's demographic characteristics. Recognizing that shoppers are heterogeneous in terms of their shopping trip regularity as well as shopping frequency, we propose a mixture model of the exponential and the Erlang-2 distribution with heterogeneous frequency for shopping trip intervals. Applied to IRI (Information Resources, inc.) shopping trip data, we found that 70 percent of shoppers visit grocery stores with random intervals and 30 percent with relatively fixed intervals. We also found clear differences between these “random” and “routine” shoppers in terms of several demographic and purchase behavioral characteristics. The “routine” shoppers are identified to have higher opportunity costs which make it difficult for them to visit grocery stores more often and/ or to switch stores. However, they spend more dollars for a given shopping trip. Finally, we discuss managerial iniplications of segmenting shoppers by their shopping trip regularity.     

Do the Poor Pay More for Food? An Analysis of Grocery Store Availability and Food Price Disparities

Do the poor pay more for food? To answer this question, this study was conducted to provide an empirical analysis of grocery store access and prices across inner city and suburban communities within the Minneapolis and St. Paul metropolitan area. The comparison among different types of grocers and geographic areas is drawn from a survey of approximately fifty grocery items for fifty-five stores. Results indicate that the poor pay only slightly more in the Twin Cities grocery market. More significantly, those who shop in non-chain stores pay a significant premium, and the poor have less access to chain stores. This study reveals that the biggest factor contributing to higher grocery costs in poor neighborhoods is that large chain stores, where prices tend to be lower, are not located in these neighborhoods.     

Grocery Purchase Behaviour for National and Own-Label Brands

This study compares the shopping habits for national and ownlabel brands to establish if there are differences in personal characteristics and purchase behaviour between those who buy national brands and those who buy own-labels in the UK. While statistical research could quantify how British grocery shoppers felt about food brands, it usually cannot explain why shoppers had the opinions they did, hence this study. It is thus an investigation, through the eyes of grocery shoppers, to answer the ‘WHY’ questions. Two distinct markets were found to exist. These grocery shoppers differ in terms of socio-economic status, personal characteristics and shopping behaviour. The findings provide information useful to both retailing and manufacturing interests as retail marketing strategies are developed in the face of intensifying competition for shoppers' food expenditure in the market-place.     

An exploratory look at supermarket shopping paths

We present analyses of an extraordinary new dataset that reveals the path taken by individual shoppers in an actual grocery store, as provided by RFID (radio frequency identification) tags located on their shopping carts. The analysis is performed using a multivariate clustering algorithm not yet seen in the marketing literature that is able to handle data sets with unique (and numerous) spatial constraints. This allows us to take into account physical impediments (such as the location of aisles and other inaccessible areas of the store) to ensure that we only report feasible centroid paths. We also recognize that time spent in the store plays an important role, leading to different cluster configurations for short, medium, and long trips. The resulting three sets of clusters identify a total of 14 “canonical path types” that are typical of grocery store travel, and we carefully describe (and cross-validate) each set of clusters. These results dispel certain myths about shopper travel behavior that common intuition perpetuates, including behavior related to aisles, end-cap displays, and the “racetrack.” We briefly relate these results to previous research (using much more limited datasets) covering travel behavior in retail stores and other related settings.     

The impact of mobile app adoption on physical and online channels

The authors investigate the impact of customers’ mobile app adoption on grocery shopping behaviors. Specifically, they investigate the cannibalization of existing physical and online channels by the newly adopted mobile app and evaluate changes in households’ total expenditures at the focal chain. They find that households adopting the mobile app marginally decrease their spending in physical stores, but considerably increase their expenditures and shopping trips through the mobile app. They present evidence that the mobile app plays a synergistic role for customers who never used a digital shopping channel. Lastly, the authors find a competitive encroachment effect by the mobile app. They find the impact of mobile app adoption is greater in markets where the focal chain faces more intense competition from a nearby competitor.     

Customers' relationship with their grocery store: Direct and moderating effects from store format and loyalty programs

This paper aims: (i) to characterize the priorities designed and implemented by grocery retailers concerning relationship marketing with customers; (ii) to analyse customers’ relationship with their grocery store and to evaluate store format and loyalty programs as key determinants of this relationship. Exploratory interviews were conducted with grocery store managers. Two independent samples of Portuguese customers answered a questionnaire and collected data were analysed using Structural Equation Modelling. Main results suggest that supermarkets lead to higher levels of customers’ trust (directly) and customers’ loyalty (indirectly). Furthermore, the positive effect of customers’ satisfaction on customers’ loyalty is higher for members of grocery store loyalty programs.     

Consumer Behaviour Convergence in the European Union

This paper examines and contrasts the attitude to food shopping in Denmark and Spain in both grocery products and white goods used to store and prepare foods. The focus is on the underlying dimensions used by consumers in Copenhagen and Madrid to select food and electrical stores to patronise. The attributes studied are drawn from prior research and are consistent across the two product categories. The research concludes that there is a relatively meaningful set of attributes, which is limited in size, that consumers may employ to make judgements. The salience of individual attributes was shown to vary with the sector under consideration. Contrasts are evident between the attribute ranking given by Danish and Spanish consumers. Particular attention is paid to the manner in which consumers distinguish between ‘service’ and ‘personnel’ in making their store selection. The work is set in the context of the retail internationalisation literature, where it is held that there is a convergence of consumer tastes in different international markers that facilitate operators developing stores overseas. Some evidence is produced to support this idea, though the need for additional cross-cultural and longitudinal studies to test this idea further is recognised.     

The moderating effect of average wage and number of stores on private label market share: A hierarchical linear model analysis

Existing research on private label market share is primarily in the context of the Western market. The Chinese market context research is scarce, although private labels are developing rapidly in the past several years. This study investigates how the average wage and number of stores affect the Chinese market's private label market share. More importantly, this paper examines the moderating effect of the average wage and the number of stores on the relationship between the private label market share and product assortment as well as the relationship between the private label market share and pricing. Data collected from a Chinese supply chain dyad is analyzed to study category management using hierarchical linear models. The results reveal that the average wage and the number of stores positively affect the private label market share. Furthermore, the average wage enhances the negative effect of the number of brands, weakens the negative effect of the private label price, weakens the positive effect of national brand price. Meanwhile, the number of stores enhances the positive effect of the SKU proliferation of private label, enhances the negative effects of the number of brands, and enhances the negative effect of the private label price. This study contributes to category management. Furthermore, the findings will be valuable to domestic and international grocery marketers and retailers operating private labels in China.     

Local competition, entry, and agglomeration

This paper analyzes competition between two spatially differentiated multi-product retailers who encounter entry from a low-cost discounter. We assess how entry affects the pricing of the incumbent stores and the role played by the location of the entrant. Our primary objective is to identify how traditional retailers respond to new forms of low-cost retailing. Results show that post entry, the prices for some products are higher than the pre entry. However, which product prices increase depends on the incumbent’s location. Contrary to conventional wisdom, we find that the store closer to the entrant is better off compared to the incumbent located further away. We empirically demonstrate the main workings of our theory using sales data from several grocery stores that saw entry by discount stores in their trading areas.     

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.     

Effects of time pressure,type of shopping,and store attributes on consumers’ satisfaction with grocery shopping

The aim of this study is to investigate whether satisfaction with grocery stores is affected by type of grocery shopping in conjunction with time pressure, and which attributes are important for satisfaction. Fictitious grocery stores are constructed according to a fractional factorial design by varying access, price level, supply quality/range, and service quality. In an Internet survey, 1023 Swedish consumers rated satisfaction with major vs. fill-in shopping imagining they were under high or low time pressure. The results showed that satisfaction is higher for fill-in shopping than major shopping, that time pressure has no effect on satisfaction, and that price level, service quality, and product quality/range are more important for satisfaction with major shopping, whereas access is more important for satisfaction with fill-in shopping. It is also found that the importance of attributes for satisfaction depends on type of shopping more than on individual characteristics.