The Role of Customer Factors in Multiple Store Patronage: A Cost–Benefit Approach

Abstract

This paper is concerned with the use of multiple stores by supermarket customers. It relates the number of stores patronized to a set of customer factors under a unifying theoretical framework emphasizing cost–benefit analysis. Respective hypotheses are tested in a large random sample. This study is a first attempt to empirically address the structure of multiple store patronage. It is demonstrated that multiple store patronage is affected by variables such as customer income, satisfaction, and expenditure that are suggestive of heterogeneous cost–benefit tradeoffs and opportunity costs of time. It is shown that customers are intrinsically different in the predisposition to being loyal. In this respect, store patronage is a continuum between single store loyalty and use of several different stores, on which customers vary depending on individual preferences. The empirical analysis also suggests that exclusive patronage of the favorite store arises from two observationally equivalent latent segments that differ in their inclination to remain loyal. The results yield valuable insights into the structure of store patronage and lead to important implications for retail managers. Several extensions are considered. A broad set of research questions surrounding store patronage can be considered from a cost–benefit viewpoint in the sense that consumer decisions in this area involve trading off economic resources against assortment, spatial and temporal benefits.