۱- Introduction

۲- Study context

۳- Literature review

۴- Methodology

۵- Findings & discussion

۶- Theoretical contributions

۷- Managerial implications and future research

References

Abstract

This study examines, for the first time, the influence of national culture and industry structure on customer loyalty in grocery retailing. Grocery retailers have a long and continued history of international expansion and it is vital to understand how loyalty can be nurtured in different contexts. Thematic analysis of focus groups conducted in the culturally and structurally disparate countries of the United Kingdom and Sri Lanka provide unique insights. Key differences have been identified around consumer preferences and perceptions of loyalty programmes and the key drivers of different loyalty types. Theoretical and managerial implications are discussed.

Introduction

This study investigates the influence of national culture and industry structure on customer loyalty towards grocery retailers. The importance of customer loyalty to the performance, profitability and perhaps even survival of retailers is well known (Maggioni, 2016). This stands true for grocery retailing, the largest retail sector across the world. Scholarly research has focused on various antecedents and influences on customer loyalty towards grocery retailers. There is, however, a paucity of research examining how national culture and industry structure influence these phenomena. The limited existing literature (see Table 1) provides contradictory and inconclusive evidence which is concerning for a number of reasons. Firstly, it is widely accepted that national culture influences many aspects of consumer behaviour (de Mooij, 2017). Therefore, it is important for retailers continuing or planning their international expansion efforts to be mindful of cultural differences between markets (Pederzoli and Kuppelwieser, 2015). Secondly, many retailers, including the world’s largest retailer Walmart, have struggled in international markets, with the lack of cultural understanding being identified as a key reason (Hunt et al., 2018). Retailers moving into new markets also need to contend with structural conditions different to their home market (Laaksonen, 1993; Pederzoli and Kuppelwieser, 2015) and their performance depends on these conditions (Chan et al., 2011). It is therefore important to have strong knowledge of local market conditions if retailers are to be successful (Schu and Morschett, 2017). Structural conditions in Western countries, for example, tend to be more advanced compared to developing markets; resulting in different retailer assortments, varied retailer focus and industry concentration levels (Reardon et al., 2012). Despite the influence of disparate cultural and structural conditions, how such conditions influence grocery retail customer loyalty is not currently understood (Chan et al., 2011; Khare et al., 2014). This knowledge gap is critical for internationalising grocery retailers as well as those seeking to serve increasingly diverse consumers in their home markets and motivates the research objective of this study; namely to understand the influence of national culture and industry structure on grocery retail customer loyalty. Through the achievement of this objective valuable new insights are provided that make not only clear theoretical contributions but also, practical propositions to guide grocery retailers. The UK and Sri Lanka were selected as the setting for this study as they demonstrate acutely contrasting national cultures according to Hofstede et al.’s (2010) dimensions of national culture and domestic retail structures. The UK has a highly advanced grocery retail structure and has spawned several successful international retailers. Further, given the UK’s decision to leave the European Union, South Asia has been identified as an alternative region for expansion due to economic growth and increasing consumer spending power (Financial Times, 2017).