Store loyalty? an empirical study of grocery shopping

University dissertation from Stockholm : Economic Research Institute, Stockholm School of Economics (EFI)

Abstract: The issue of customer loyalty is a main concern for grocery retailers. Retailers need to know how loyal customers are to their grocery stores; if some customers are more loyal than others; and, why that would be so. Is customer loyalty due only to how well a store manages to satisfy its customers, or are consumers inherently loyal to a greater or lesser degree?At the root of this issue is the basic question of what "store loyalty" implies. Although the concept "loyalty" is widely used within marketing, there is no consistent interpretation of the term. Rather, "loyalty" is used for describing related, but different, phenomena, and thus a choice has to be made of which of these phenomena to cover in a specific study. In grocery shopping, households have been shown to use several stores; hence a question of great consequence for retailers is to understand how and why households divide their purchases across stores.To contribute to the understanding of this phenomenon, this thesis focuses on the degree of behavioral loyalty and its causes. The thesis is based on an empirical study of household grocery shopping that uses a purchase diary, a questionnaire, and in-depth interviews as data collection methods. One of the main findings of the research is that the degree of behavioral loyalty is affected by shoppers' evaluations of stores, that is, a factor a store manager can influence, but also by shopper characteristics such as the degree of price orientation and interest in personal contact with store personnel. An extension of the findings from the quantitative part of the study is provided by the in-depth interviews that explore how households manage the entire task of grocery shopping.