Customer switching behaviour in the local supermarket industry

Abstract

Purpose – This dissertation aims to identify the emergence of customer switching behaviour as an effect of increased competitive rivalry in the supermarket industry. These changes in the industry have also been significantly impacted by the introduction of the Hard discounter Lidl. The study also tries to identify what drives customer loyalty and satisfaction for local supermarket shoppers in such a competitive market. Design/methodology/approach – The study will employ both secondary and primary data sources. Primary data was collected using a self-administered online survey for a convenience sample of 438 local grocery shoppers. The survey was in the form of a questionnaire outlining which outlets these shoppers frequent to when they frequent them as well as how habitually they visit them. The survey then explores to what extent switching is happening following recent changes in the industry and what factors are influencing this switching behaviour. It also analyses what elements of the retail mix are the most influential. Findings – From a research perspective, this work provides evidence that local retailers can make use of to remain competitive in such a saturated market. From a practical perspective, this work presents an input of listing how consumer behaviour of local grocery shopping has changed ever since the introduction of the hard discounter in Malta. Research limitations/implications – The exploratory nature of the study and the sample size limit the potential of the results achieved. The study could have achieved more representative results through a probability sampling technique rather than a convenient one had it not been for time constraints encountered. Practical Implications- This research enables supermarket top management departments to develop a better insight of their customers’ buying behaviour as of the findings in this research study. Originality/value- The study outlines the retail mix elements that would drive customer satisfaction and loyalty in a market full of options for local grocery shoppers.