Shopper’s Attitude and Demographics Influence on Store Patronage: A Comparison of Formal vs. Informal Food Retail Stores in India

Abstract

The study examines the influence of shoppers’ demographic characteristics (age, income, and education) and their attitude towards product and/or retailer related attributes on their store patronage behavior in food retail context in an emerging market setting. The results indicate a clear distinction between formal and informal markets as measured through shoppers’ orientation. Shoppers’ retail patronage behavior towards formal and informal food retail stores shows a distinct pattern. The study reveals that shoppers’ preference for formal vs. informal retail location is influenced by their concern towards merchandise, safety, freshness, bargaining, service, and satisfaction from past experience. Additionally demographics such as age, income and educational status also have a positive influence over shoppers’ patronage behavior. Consumers divide their shopping activity asymmetrically across several stores (Baltas et al. 2010), but are consistent while patronizing few primary stores where they purchase more (Rhee and Bell 2002; Ailawadi and Keller 2004; González-Benito et al. 2005). Store patronage involves individuals choosing an outlet for shopping on the basis of their attitudes formed from experience, information and need (Haynes et al. 1994). Understanding and focusing on attitudes while designing the offerings would increase store patronage, loyalty and performance (Knox and Denison 2000). Thus, it is reasonable to expect that understanding attitudes of shoppers would enable the retailers help in increasing the shoppers patronizing behaviors (Berman and Evans 2001). Though earlier studies identified attitudes of shoppers towards the merchandise and stores and its influence on the patronage (Steenkamp and Wedel 1991; Baker et al. 2002; Yue and Zinkhan 2006; Shukla and Babin 2013), these were broadly limited to formal sector retail store formats. Comparing such attitudes between formal and informal is limited in the extant literature. Both the formal and informal retailers thrive not only based on the services provided, locations, and marketing strategies, but also on the nature of market (Maruyama and Trung 2010). Thus shopper’s characteristics notably the demographics play crucial role in determining the store patronage (Haynes et al. 1994). Again the demographic characteristics influence on the formal and informal markets is hardly understood in the extant literature. This paper addresses the above issues.