Small versus large retail stores in an emerging market—Mexico

Abstract

As emerging markets open, they attract large domestic and international retailers, which compete with traditional local small stores. This study investigates whether this influx of large stores is inevitable, by focusing on consumers' motivation for selecting a retail store, and the association between these motivation dimensions and the shopping patronage. The results from an empirical study conducted in Mexico indicate that consumer's preference for small stores is positively motivated by functional benefits and familiarity with small stores; and negatively associated with the functional benefits offered by large stores. These motivational dimensions are also positively associated with the share of wallet spent at small stores. While gender exhibits mixed effect on preference for small stores and the share of wallet, women do feel that large stores provide better functional benefits and support for the local economy. Finally, the study details the research and managerial implications of the findings.