An analysis of factors influencing store format choice among customers in Pakistan

Masteroppgave i økonomi og administrasjon - Universitetet i Agder 2012Food and grocery retailing market in Pakistan has gone to dynamic changes. New foreign food and grocery chains’ coming in creating competition among all the large and small players active in the market. However, the larger share of the market is still in the hand of small traditional retail owners. The purpose of this study is to identify the important factors that affect consumer patronage behavior of urban customers towards modern and traditional food and grocery stores in the context of the Pakistan. Moreover, the study focuses to find which factors lead to the choice of which specific type of retail formats in food and grocery purchase. Based on literature review a conceptual model was proposed and six hypotheses were developed. The model investigates the effect of several independent variables on store format choice: product variety, courtesy of staff, reasonable price, store atmosphere, location convenience and household income. A survey of 471 consumers’ was carried out using a random sampling approach. Several techniques were used with the help of Statistical Package for Social Sciences (SPSS) to analyze the data, such as factor analysis, Pearson correlation, descriptive statistics and logistic regression analysis. The result shows that product variety, courtesy of staff, reasonable price, store atmosphere, location convenience and household income have significant impact on food and grocery retail format choice. Moreover, results also indicated that product variety, courtesy of staff, store atmosphere and monthly income positively affects the preference for modern stores, while location convenience and reasonable price were found to lead to preference traditional stores. Key words: Consumer Behavior, Retailing, Traditional Store, Modern Store, Logistic Regression, Product Variety, Price, Store Atmosphere, Location Convenience