Customer expectations and moderating role of demographics in fresh food retail

Abstract

PurposeThe purpose of this paper is to identify the dimensions of customer expectations and study the moderating role of demographics in the context of fresh food retail.Design/methodology/approachA structured questionnaire was designed using extant literature review followed by expert opinions. The survey was conducted among the customers in the twin cities of Maharashtra in India. The factors of customer expectations were identified using exploratory factor analysis (EFA) and further confirmed using confirmatory factor analysis in SPSS and AMOS, respectively. The significance of the customer expectations on customer satisfaction was studied using structural equation modeling. Subsequently, the role of demographics was studied using two-step cluster analysis and multigroup moderation.FindingsDuring EFA three factors emerged, namely, product-related features, in-store quality and store support services. Structural model evaluation found product-related features and in-store quality significantly influencing the customer satisfaction, while store support services were found as a non-significant factor in the region studied. Further, using cluster analysis customers were segregated into three groups, namely, traditional, autonomous and premium customers, where the premium customers were found to prefer the store support services on a higher scale, and similar results were obtained using multigroup moderation. Demographics, namely, gender, age, respondents’ income and marital status moderated for product-related features and in-store quality. Interestingly, respondents’ income also moderated for the store support services.Practical implicationsThe findings provide directions for store managers of the fresh food category to align supply chain decisions with the unique requirements of customers considering their socio-economic characteristics.Originality/valueOn the basis of social exchange theory, the authors found that in a mutually beneficial relationship, concerning the value proposition, retailers need to address the requirement of the different income group customers for store support services.