Consumer Behavior in Retail Format Competition

Competition among retail formats—from traditional supermarkets and hypermarkets to hard discounters, specialist stores and online platforms—profoundly influences consumer decision-making across the globe. Shoppers evaluate formats on price, convenience, assortment, service quality and brand identity, often balancing these criteria against personal preferences and situational factors. Price-sensitive segments may gravitate towards discounters for basic goods, while experience-seeking or health-focused consumers opt for premium or specialist formats. The rise of omnichannel retailing has blurred the boundary between physical and digital channels, reshaping metrics of loyalty such as share-of-wallet and share-of-visits. Spatial differences in demographics, purchasing power and local competition compel retailers to fine-tune store locations, format offerings and marketing strategies. A nuanced understanding of these interactions is vital for retailers aiming to reinforce their competitive position, optimise resource allocation and meet evolving consumer expectations.

Research from Nature Portfolio

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Research from all publishers

Recent investigations have deepened insights into how consumers navigate competing formats. Studies of grocery patronage demonstrate that engagement with e-retail channels alters in-store loyalty formation: digital usage can either supplement or substitute physical visits, with consumer satisfaction acting as a crucial mediator between service evaluation and share-of-wallet. In food retailing, the entry of hard discounters has been shown to depress neighbouring store satisfaction and reduce incumbent share-of-wallet, heightening the importance of convenience and tailored service in retaining patrons. Research on premium organic specialist entry reveals that generalist supermarkets experience volume erosion in targeted categories, leading incumbents to enhance organic assortments, adjust price-quality signals and bolster authentic branding to defend market position. Collectively, these findings highlight the interplay of digital behaviour, pricing tactics and assortment strategy in shaping competitive outcomes across retail formats.

Consumer Behavior in Retail Format Competition publication trend

The graph below shows the total number of articles in consumer behavior in retail format competition across all publications each year (not limited to Nature Index journals).

Technical terms

Retail format competition: The rivalry among different store types and channels to attract consumer purchases.

Share-of-wallet (SOW): The proportion of a consumer’s total category expenditure captured by a single retailer.

Share-of-visits (SOV): The proportion of a consumer’s trips in a retail category made to a particular retailer.

Hard discounter: A retail format characterised by limited assortment, low prices and streamlined operations (e.g., Aldi, Lidl).

Organic specialist retailer: A format focusing exclusively on certified organic products, often with premium pricing and curated assortments.

Omnichannel: An integrated retail approach combining online and offline touchpoints to create a seamless consumer experience.

References

1. Evaluating store location and department composition based on spatial heterogeneity in sales potential. Journal of Retailing and Consumer Services (2023).
2. The impact of e-retail usage on relative retail patronage formation. International Journal of Retail & Distribution Management (2023).
3. The Impact of Organic Specialist Store Entry on Category Performance at Incumbent Stores. Journal of Marketing (2022).
4. The impact of hard discounter presence on store satisfaction and store loyalty. Journal of Retailing and Consumer Services (2021).