The Impact of Store Image Attributes on Store Satisfaction and Store Loyalty : of Hard Discounter Grocery Retailers

Abstract: Maintaining and increasing customer loyalty has become a crucial strategic objective for businesses due to cross-shopping and intensified competition across many industries. In the realm of grocery retailing, the necessity for retailers to invest resources towards fostering customer loyalty has reached unprecedented levels, primarily due to the proliferation of shopping formats accessible to customers. Hard discounters are among those store formats. They are stores that offer basic goods and daily necessities at the lowest prices possible while maintaining high-quality standards. Due to the tough economic times, consumers are becoming more price-oriented which makes them switch some of their shopping to hard discounters and when they do, they learn that quality, assortment, and service are actually better than expected which leads to them remaining loyal to the store when good economic times return. However, to be able to achieve and maintain loyalty, stores must first create store satisfaction. And that store satisfaction is in turn based on other factors, such as store attributes and the store's physical environment. Nevertheless, existing marketing research offers limited assistance to retail managers when it comes to maintaining loyalty for hard discounters. Therefore, the purpose of this thesis is to analyze which store image attributes can create store loyalty in a store environment for hard discounters within the Swedish grocery market. This study intends to explore the relationship between store attributes, store image, store satisfaction, and store loyalty within hard discounters. Towards filling this gap, a conceptual model considering the effects of store image attributes on store satisfaction and store loyalty is proposed. Data was collected from a survey of 151 Swedish shoppers at hard discounters. The data was then analyzed using IBM SPSS. when analyzing the data, the results show that the store attributes atmosphere and price had the biggest impact on store satisfaction, followed by assortment and personnel which exerts a moderately positive impact on store satisfaction. However, service did not exert a positive influence on store satisfaction. Ultimately, store satisfaction exerts a strong positive effect on store loyalty to hard discounters. In conclusion, the results indicate that there is a relationship between store image attributes, store satisfaction, and store loyalty for hard discounters in the Swedish grocery market.