A MODES OF CONSUMER PERCEPTIONS AND STORE LOYALTY INTENTIONS FOR A SUPERMARKET RETAILER

Slow growth and intense competition in retail markets in recent years increases the need for retailers to use strategies focused on retainin g and attracting the right customers. However, a strategy that is effe ctive in acquiring new customers may not be the most effective in reta ining current customers. In order to understand the effectiveness of a ctivities designed to retain customers, we study the store loyalty int entions of current customers for a multi-store grocery retailer. Using Partial Least Squares, on data averaged across at least 100 customers per store for each of about 160 stores, we find that service quality is by far the most critical determinant of merchandise quality percept ion. Perceived value for money depends on perceived relative price and sales promotion perceptions, and to a lesser extent on service qualit y and merchandise quality perceptions. Store loyalty intentions, measu red by intent to continue shopping, intent to increase purchases and i ntent to recommend the store, depend on service quality and merchandis e quality perception. By separating the stores according to average co nsumer perceptions of competitor attractiveness, we further find that perceived value does play an important role in the determination of st ore loyalty intention if there is a high degree of competitor attracti veness. When this attractiveness is low, our. results fail to show a r elevance for perceived value for money.