The Impact of Supplier Flexibility, Dependence, and Trust on Behavioral Loyalty in the Retail Superstore

Abstract

The objective of this study is to examine the impact of supplier flexibility, dependence, trust, on behavioral loyalty in the context of the supplier-retail superstore relationship. Taking supplier trust as a mediator, this research built a structural model. Data were collected from the manufacturers of consumer food products in Bangladesh, and hypotheses were tested using structural equation modeling with AMOS. Out of six hypotheses, three are found to be statistically significant. Particularly, supplier flexibility impacts both supplier trust and retail superstore repurchase loyalty, and supplier dependence has an impact on supplier flexibility. Moreover, supplier flexibility plays a mediating role between supplier dependence and retail superstore repurchase. Supplier flexibility and dependence are important in enhancing retail superstore behavioral loyalty in the developing country context. These constructs are effective when retail superstores show their greater repurchase loyalty, as opposed to showing opportunistic behavior. However, in the presence of supplier flexibility, supplier dependence is effective on retail superstore loyalty when the superstore treats such dependence as a tool to promote integration and induce a high level of performance. This study is limited by the subjective outcomes of the responses and the inconsistency of the association due to the single informant’s reporting. There is a possibility that self-reported data, which generates socially desirable biases, exaggerated the research findings. The present paper advances our understanding of the impact of these important constructs practiced by supplier companies that have an impact on the repurchase loyalty of retail superstores. This endeavor is one of few that considers the developing country context and contributes to research and practice in supplier-retail superstore relational exchange.