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Determinants of supermarket choices in Pietermaritzburg

Contents

Introduction

Related literature

The supermarket industry in South Africa

Methodology

Findings

Recommendations

Conclusion

Limitations

Introduction

2002 to 2007, supermarket industry growth 105%

Expected to grow 93% by 2012

Increased number of stores increased competition

Increased buying power for consumers

Is there a gap between customer needs and retailer offerings?

Aim: investigate attributes that determine supermarket choices

Related literature

Store image: a perception held in the shopper’s mind, determined partly by the functional qualities of the store and partly by the aura of psychological attributes (Ghosh, 1990)

A store image is also what influences consumers’ choices

Author(s) Store Image Components

Berry (1969: 7) Price, Quality, Assortment, Fashion Of Merchandise, Sales Personnel, Location Convenience, Other Convenience Factors, Services, Sales Promotions, Advertising, Store Atmosphere, and Reputation On Adjustments

Lindquist (1974: 31) Merchandise, Service, Clientele, Physical Facilities, Convenience, Promotion, Store Atmosphere, Institutional Factors and Post-Transaction Satisfaction

Belk (1975: 159) Physical Surroundings, Social Surroundings, Temporal Perspective, Task Definition and Antecedent States

Author(s) Store Image Components

Ghosh (1990: 174) Merchandise, Price, Service, Physical Characteristics, Convenience , Advertising And Promotion, Store Ambiance, Characteristics Of Shoppers, and Store Personnel

Lusch, Dunne and Gebhardt (1993: 96)

Price, Merchandise, Physical characteristics, Sales promotions, Advertising, Convenience, Service, and Store personnel

Hasty and Reardon (1997: 151) Store Promotion, Store Personnel, Product Selection, Store Services, Store Atmosphere, Price, and Store Location

Terblanche (1998: 63) Merchandise, Service, Clientele, Physical Facilities, Convenience, Communication, Institutional, and Post Transaction

Author(s) Determinant attributes

Doyle and Fenwick (1974: 46) Lower Prices, Higher Quality and Greater Variety

Bearden (1977: 21) Price and Quality

Westbrook (1981: 79) Sales Personnel, Store Appearance, Merchandise Depth and Selection, Value Offered, Price Level, Post-Sale Adjustments, Credit Procedures, Hours of Operation, Location, Clientele, Special Sales, and Advertising

Arnold, Oum and Tigert (1983: 157) Location Convenience, Low Prices, Assortment/Variety, Courteous Helpful Service, High Quality Merchandise, Quality of Fresh Meat, Fast Checkout/Fast Service, Cleanliness, and Shopping Environment

Author(s) Determinant attributes

Weisbrod, Parcells and Kern (1984: 75)

Low Price and Assortments Of Products

Lumpkin, Greenberg and Goldstucker (1985: 86)

Price and Quality

McDonald (1991: 315) Store Location, Price, and Product Variety

Yilmaz (2004: 783) Location

Donovan, Rossiter, Marcoolyn, and Nesdale (1994: 283)

Store Environments

Hutcheson and Moutinho (1998: 709)

Quality of Fresh and Packaged Produce, Low Prices, Length of Queues, Friendliness of Staff and Convenient Location

Author(s) Determinant attributes

Severin, Louviere and Finn (2001: 192)

Merchandise Quality, Selection, Service, Price and Coupons

Baker, Parasuraman, Grewal, and Voss (2002: 120)

Store Design, Low Price, Good Quality and Store Atmosphere

Sinha and Banerjee (2004: 486) Proximity and Merchandise

Yilmaz, Aktas and Celik (2007: 171) Quality, Advertisements, Brochures, Promotions, Discounts, and Location

Mesquista and Lara (2008: 35) Services, Quality and Convenience

Supermarket industry in SA

High concentration and competition

Price discounting and high distribution costs

Dominated by domestic retailers

Supermarkets are replacing traditional spazas

Black middle-class openings in

townships

Choice and convenience for middle class

Price discounting for low income group

Value-added in-store offerings

Methodology

Price, location convenience, store layout, store merchandise, store promotions, store personnel, store atmosphere, store services andreputation

Likert scale questionnaire 1 = not at all important 5 = extremely important

Non-probability sampling

Survey at 3 malls (224) and UKZN PMB campus (50)

Cronbach’s Alpha: 0.744

High face validity and content validity

Results

Mean Std. Deviation

Store Services 4.38 .911

Location Convenience 4.32 .989

Price 4.22 1.055

Reputation 4.20 1.016

Store Merchandise 4.04 1.051

Store Atmosphere 3.96 1.121

Store Personnel 3.88 1.200

Store Layout 3.77 1.151

Store Promotions 3.46 1.274

Store Services

Lusch et al (1993: 96): credit, delivery, return policy, and guarantees

Terblanche (1998: 63): lay-bye plan, returns, credit, delivery, packaging, and complaints handling

Lindquist (1974: 31): salesclerk service, presence of self-service, ease of merchandise return, delivery service and credit policies

Arnold et al (1983: 157), Severin et al (2001: 192), and Mesquista and Lara (2008: 46)

Location and Price

Majority of authors support these findings

Further reinforced by BMI

Convenience over price, especially among high income earners

Reputation

Terblanche (1998: 63) and Lindquist (1974: 31-32): institutional dimension of a retail outlet image

Doyle and Fenwick (1974: 46)

Store Merchandise

Lusch et al (1993: 96): quality, style and fashion, assortment, and national versus private labels

Terblanche (1998: 63): quality, depth, width, style, price, and innovativeness

Lindquist (1974: 31): quality, assortment or selection, fashion or styling, guarantees, and pricing

Different perspectives Greater variety and assortment Quality Depth and selection Organised merchandise

Less important attributes

Store layout Supermarkets frequented by shoppers

Store atmosphere Low involvement shopping

Store personnel Little personal interaction

Store promotions Short term

Recommendations

Price Negotiation with suppliers Providing incentives to suppliers such as shelf space, in-

store promotions Bigger operation formats

Location Choose a high traffic location Free shuttle Anchoring a shopping centre

Recommendations

Store Merchandise Increasing stock variety Superior conditions of

products Product presentation More private labeled

products

Services

Flexible return policy Variety of payment

options Training for staff

Reputation CSR programmes Marketing the

programmes

Conclusion

Attributes chosen from rich literature research

Price, Location, Services, Reputation, and Merchandise

Coincides with past research

Provides insight for all stakeholders

Needs further follow-up research

Limitations

Disproportionate number of respondents from each mall

Difficulty in completing the questionnaire

Unrepresentative racial proportions of respondents