Understanding the Determinants of Retail Strategy: An Empirical Analysis

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.

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“…Furthermore, store format decision is a powerful strategic tool for retailers to influence consumers (Gauri, 2013;Gauri et al, 2008). …”

Section: Introductionmentioning

confidence: 99%

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

Filipe

Marques

Salgueiro

2017

Journal of Retailing and Consumer Services

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“…In a recent analysis of the US retail market, EDLP and HYBRID stores were found to perform more strongly than HiLo retailers in generating weekly sales (Gauri, 2013; see also Volpe, 2011) though the execution of pricing strategy should be considered in the context of (and in combination with) any multi-format strategy (Gauri et al, 2008;Haans and Gijsbrechts, 2011). A greater variation in grocery pricing strategy is suggested in Bolton and Shankar's study of US supermarkets' pricing behaviours across 200 grocery stores in 17 chains, over a 2-year time period (Shankar and Bolton, 2004;Bolton and Shankar, 2003).…”

Section: Grocery Pricing Strategiesmentioning

confidence: 99%

“…They found that although chains and stores employed EDLP and HiLo as signalling strategies, retailers actually practiced as many as five different pricing strategies at the brand level (see Table 1). Bolton et al, 2010;Bolton and Shankar, 2003 An array of research demonstrates that retailers, while perceived as fitting into neat strategy boxes, often realise very different strategies at the store shelf-edge (Ellickson and Misra, 2008;Gauri et al, 2008;Shankar and Bolton, 2004). Whether this is deliberate or accidental is not entirely clear, due in part to most retailers' sensitivity to revealing their pricing practices.…”

Section: Grocery Pricing Strategiesmentioning

confidence: 99%

“Passivity”: a model of grocery retail price decision-making practice

Watson

Wood

Fernie

2015

European Journal of Marketing

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Purpose -This paper explores the applied context of grocery retail pricing practice to understand how pricing executives approach 'regular price' decision-making (as opposed to promotional pricing). The study seeks to inductively develop a model of regular price decision-making in grocery retailing.Methodology -The research employs an inductive methodology involving interviews with pricing executives working for grocery retailers that account for approximately 85% of UK, and 64% of US, grocery market retail sales. Our approach is appropriate given the underdeveloped research insights into regular pricing within food retailers.Findings -We find that regular pricing is undertaken with little sophistication; typically on the basis of simple, inflexible rules that result in conflicting goals. We identify a typology of three pricing roles, though all share an underdeveloped understanding of the effects of price changes on customer demand and the implications of competitor reactions. These contexts, causes and conditions lead to a range of consequences; notably a degree of pricing inertia, 'customer-less' pricing, and 'enforced symbiosis' -coping outcomes. Taken together we identify a theory of "passivity" pricing.Originality/value -The research presents a contribution to new knowledge in the field of retail marketing by developing theory in retail pricing. In contrast to much extant research on grocery pricing, this paper accesses the insights and opinions of the pricing executives themselves. It exposes the realities of regular price decision-making across two developed retail markets and offers managerial insights.

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“…In a similar vein to the work developed by Gauri, Trivedi and Grewal (2008), we classify supermarkets' positioning based on a services and pricing strategy combination, analyzing to what extent this will lead to the identification of different loyalty-driving factors. We classify as low-cost retailers all those that tend to follow an everyday low price strategy (EDLP) and offer minimum level of services, medium-cost retailers are those that follow a high-low pricing strategy (Hi-Low) and offer medium level of services and premium retailers are categorized as those that follow a high level pricing policy, offering simultaneously high level of services.…”

Section: Explanatory Factors and Hypothesesmentioning

confidence: 99%

Do Private Labels Lead to Store Loyalty? An Integrated Framework of Analysis Using a Structural Equation Modeling Approach

Vale

Matos

Caiado

2015

Advances in National Brand and Private Label Marketing

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In this study we follow an integrated approach-combining in-store characteristics and economic factors-to assess the role of private labels (PLs) as a driver of store loyalty, across different types of retailers. We apply structural equation modeling to a large survey collected online, with results at aggregate level indicating that PLs loyalty indeed seems to contribute to store loyalty. However, when analysis takes into consideration the different types of supermarket (low-cost, medium-cost, and premium), findings suggest that PLs play a critical role in generating consumers' loyalty behavior exclusively in medium and premium supermarkets.

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Understanding the Determinants of Retail Strategy: An Empirical Analysis

Cited by 94 publications

References 42 publications

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

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

“Passivity”: a model of grocery retail price decision-making practice

Do Private Labels Lead to Store Loyalty? An Integrated Framework of Analysis Using a Structural Equation Modeling Approach

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