The influence of perceived risk on purchase intent – the case of premium grocery private label brands in South Africa

Abstract

PurposeThe purpose of this study is to investigate the perceived risks that consumers associate with premium grocery private label brands in South Africa, and to understand which of these risks significantly affect their purchase intention.Design/methodology/approachA self‐administered survey consisting of 325 respondents was utilised. Item total reliability and confirmatory factor analysis were used to test the reliability and validity of the constructs. Furthermore, path modelling in the form of partial least squares analysis was employed to analyse the relationship between consumers' perceived risks and their purchase intention.FindingsThis study revealed that functional and time risk both have a significant negative influence on consumers' purchase intention of premium grocery private label brands (at the 5 per cent significance level), while financial, physical, psychological and social risks do not significantly influence their purchase intention.Research limitations/implicationsThis study is limited in that respondents are consumers of a specific geographic region and demographic grouping. Findings may therefore not be generalisable, particularly with respect to developed markets.Originality/valueThis is one of the first studies investigating consumers' perceived risks of premium grocery private label brands sold within emerging markets. As retailers continue to grow profits through the deployment of such brands, this study may provide direction on how best to entice consumers to trial and adopt these brands in a largely commodity‐driven environment.