Consumer store choice dynamics: an analysis of the competitive market structure for grocery stores

This study aims at formulating and testing a model of store choice dynamics to measure the effects of consumer characteristics on consumer grocery store choice and switching behavior. A dynamic hazard model is estimated to obtain an understanding of the components influencing consumer purchase timing, store choice, and the competitive dynamics of retail competition. The hazard model is combined with an internal market structure analysis using a generalized factor analytic structure. We estimate a latent structure that is both store and store chain specific. This allows us to study store competition at the store chain level such as competition based on price such as EDLP versus a Hi-Lo pricing strategy and competition specific to a store due to differences in location.