Insights into cross- and within-store price search: Retailer estimates vs.consumer self-reports

Past research of the accuracy of retail grocers' beliefs about consumer sea rch and patronage behavior has found that executives tend to overestimate t he size of the consumer segment that regularly switches stores for price sp ecials. With surveys of consumers and executives in a large midwestern mark et, we extend and replicate the earlier research. In this study, we find th at executives demonstrate, on average, an accurate sense of the proportion of consumers who are primarily loyal to one store or are shoppers of multip le stores. However, they still tend to overestimate aggregate price compari son behavior and cross-store shopping. At the same time, we also find that managers simultaneously underestimate consumer newspaper readership, in-sto re search for specials, and stockpiling. This new result suggests that the more loyal primary customers may account for a greater proportion of increm ental promotional sales than has been recognized in the past. These results suggest a significant increase in the information value to be derived from the desegregation of sales data by shopper loyalty status.