Stores and Consumers ­ Two Perspectives on Food Purchasing L~'~~~~~ STOCKHOLM SCHOOL U'S'11 'S'u"\ OF ECONOMICS ~....'!:!...'.1 THE ECONOMIC RESEARCH INSTITUTE ~~~f' Address: Sveavagen 65, Box 6501, S-113 83 Stockholm. Tel.+46 8-736 90 00 Basic Orientation The Economic Reserarch Institute, at the Stockholm School of Economics (EFI) is devoted to the scientific study of problems in management science and economics. It provides research facilities for scholars belonging to these disciplines, training advanced students in scientific research. The studies to be carried out by the Institute are chosen on the basis of their expected scientific value and their relevance to the research programs outlined by the different sections of the Institute. 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Stores and Consumers Two Perspectives on FoodPurchasing Carina Holmberg • 4~ STOCKHOLM SCHOOL \:\;1 OF ECONOMICS /a TIlE ECONOMIC RESEARCH INSTITm~E FOUNDATION FOR DISTRIBUTION RESEARCH A Dissertation for the Doctor's Degree in Philosophy Stockholm School ofEconomics 1996 © EFI and the author 1996 ISBN 91-7258-418-1 Printed by Graphic Systems i Stockholm AB, 1996 Keywords: Consumer behaviour Retailing Customer orientation Ethnography Scanner data Distributed by: The Economic Research Institute at the Stockholm School ofEconomics, Box 6501, S-113 83 Stockholm, Sweden PREFACE This report is a result of a research project carried out at the Foundation for Distribution Research at the Economic Research Institute at the Stockholm School ofEconomics. This volume is submitted as a doctor's thesis at the Stockholm School of Economics. As usual at the Economic Research Institute, the author has been entirely free to conduct and present her research in her own ways as an expression ofher own ideas. The Institute is grateful for the financial support provided by the Torsten and Ragnar Soderbergs Foundations and by the sponsors of the Foul1dation for Distribution Research. The present volume would not have been possible without the cooperation with the owners and personnel ofthe leA store where data were collected, and with the households participating in the interview study. The Economic Research Institute wishes to warmly thank all involved for their generosity and openness. Sven-Erik Sjostrand Claes-Robert Julander Professor, Professor, Director ofthe Economic President of Research Institute at the Stockholm School ofEconomics the Stockholm School ofEconomics Food for thought ... on the Art ofThinking, "The Old Grey Donkey, Eyeore, stood by himself in a thistly corner of the Forest, his front feet well apart, his head on one side, and thought about things. Sometimes he thought sadly to himself, 'Why?' and sometimes he thought, 'Wherefore?' and sometimes he thought, 'Inasmuch as which?' - and sometimes he didn't quite know what he was thinking about. " (Milne, Winnie-the Pooh) on the Value ofTheory, "Every theoretical explanation is a reduction ofintuition. " (H0eg, Miss Smilla's Feeling for Snow) and on the Joy ofa Good Meal. "They had stilton soup to start with, and a glass of dry sherry. This was followed by lamb chops and new potatoes and what the Admiral called 'a robust claret '. Selma and he then ordered trifle. 'None ofthis nouvelle stuff, , the Admiral sniffed, 'a fellow could starve to death. ' He hailed the waiter, 'Be liberal with the cream. ' And he winked at Selma who giggled happily. 'You are a dreadful man. ' Her chubby shoulders heaved with laughter. " (Cobbold, Guppies for tea) Acknowledgements How strange it feels to have come to this part in my life, actually writing upon the acknowledgements for my thesis! I pinch my arm, and I am still here! I have better continue writing and take this chance to express my gratitude to all those people that in different ways have helped and supported me and my work. The empirical parts would not have been possible without co-operation from the store where data was collected, the day-care center allowing me to use it for contacts, and the households that opened up their homes and let me peek into their shopping baskets. Not only did they all co-operate, but they also did it in the smoothest ways, which I am very grateful for. I am also grateful for the financial support I have received from Torsten and Ragnar Soderbergs Foundations and through the sponsors of the Foundation for Distribution Research. The Foundation was founded by Nils­ Erik Wirsall, the energy and drive ofwhom has been a source of inspiration for me. Our many discussions about grocery retailing have also inspired me in my work. While I have been a PhD student at the Stockholm School ofEconomics, a large number of people at the school have been my collegues and friends, providing both enjoyable distractions and intellectual nourishment of high class. My everyday context during this time has been the Foundation for Distribution Research; a group of creative, unprestigious and intellectually stimulating researchers. Seminars, lunches, workout, get-togethers of different kinds have been characterised by warmth, brilliance, openness, and laughter, allowing the heterogeneity of our different personalities to prosper. Many thanks thus go to former and present collegues and friends at the Foundation: Anne, Case, Fredrik, Jonas, Magnus, Maria, Micke D, Micke H, Odd, Patricia, Pegepe, Per, PG, Richi, Simon, UBa, you are wonderful! Special thanks to Maria, Per, and to Anne with the red pen. I have been fortunate enough to have Professors Claes-Robert Julander, Barbro Anell and Dag Bjorkegren in my advisory committe. I have appreciated our discussions and hope that I in this thesis have managed to incorporate at least some ofall your intellectual integrity and clarity. My thanks go also to Jorgen Sandberg, for time, interest, and comments which I probably did not understand, to Anna Wahl for help and inspiration in the first nervous phase of my household studies, to Titti Unckel, for the verbal "kick-in-the butt" that brought me to this point, and to Rune Castenas, for altruistic solutions to financial problems and for constant encouragement in a genuine and personal manner. A remarkable friend of mine, Birgitta Nessen, on her own inititative, generously took of her scarce spare time to read and comment on version after version of my manuscript. Biggis, your interest in my work and support during the process have been extremely valuable to me, maybe n10re than you understand, and certainly more than I can express. Tl1ank you! The most important person for me, and the stable point in this sometimes shaky road to the PhD, has been my advisor and boss Claes-Robert Julander, now President at the Stockholm School of Economics. Thank you Case for the open door and the listening ear, for laughing at me when I took myself too seriously, for trusting me when I did not tnlst myself, and for always being there ready to argue and/or support. Combining in one person an un-prestigious sports-fan in the low teens, the intellectual "know-it-all" ofthe owl in the fairy­ tales, with empathy for and trust in the people around you, is not only charming, but brings out the best in the people around you. In this moment I also think with gratitude upon all those people that over the years willingly and with great interest discussed food, purchasing, and grocery stores with me. This confirmed the importance of the issue to n1e, and was helpful in moments ofdespair. This, however, is a moment ofgreat joy! Stockholm, April 1st, 1996 Carina Holmberg OUTLINE OF THE THESIS This book consists of three parts. Two empirical studies are presented in the first two parts and an overall discussion ofthe emerging findings is presented in the final part. The common topic is consumer behaviour related to food purchasing and grocery stores. An emerging theme is the relation between grocery stores and their customers. An empirical study on effects of promotions in grocery retailing is presented in the first part. The study uses more than three years ofPOS scanner data from one store and analyses effects of different kinds of promotions for fourteen product categories. This first part was also published as a licentiate thesis in 1992. The second part contains an empirical study ofhouseholds' purchasing and planning behaviour. Some ten households were accompanied to the grocery store and interviewed while grocery shopping. The study gives a consumer perspective on grocery stores and provides insight into decision making related to food planning and purchasing. In the third part, the two empirical studies are discussed, both separately and taken together. The discussion focuses both on aspects ofthe methods used and ofthe contribution to knowledge in the field ofconsumer research. Table ofContents Part One - Effects ofFeature Advertising and Other Promotions 1 Introduction 1 1.1 Background...............•......................•............••.......•.....•..........•...............................•