Analysis of the Factors Influencing the Consumers’ Behavior Regarding the Selection of Retail Formats Grocery (Case Study: Tehran City)

Document Type : Research Paper

Authors

1 Department of Agricultural Economics, Faculty of Agriculture, University of Tehran, Karaj, Iran.

2 Department of Agricultural Economics, Faculty of Agriculture, University of Tehran, Karaj, Iran

10.22059/ijaedr.2022.342642.669147

Abstract

The influence and expansion of modern retail markets such as malls and hypermarkets in Iran have changed the families’ buying behaviors and lifestyle regarding the purchase of food products. To this end, this study was aimed at investigating the factors influencing the consumers’ behaviors in relation to various retail formats for food products in Tehran in 1400. To this end, based on random sampling, 210 questionnaires were completed and Multivariate Probit Model was used. The dependent variable included seven formats including mall, hypermarket, supermarket, minimarket, shopping stall and small markets and fresh markets. Based on the results of the model, the risk minimization factor decreases the probability of traditional purchase. The services and convenient shopping increases the probability of buying in formats such as mall, stalls and small stores and vendors, and the index of price sensitivity reduces the probability of people buying from malls and increases the number of vendors. Also, based on the estimated results, there is no competition between different formats of traditional and modern food retail in Iran. Thus, it is suggested that the characteristics of target markets be taken into account when it comes to geographically localizing the modern and traditional forms.

Keywords

Main Subjects

Extended Abstract

Introduction

Today, the growing expansion of retail market, such as malls, hypermarket, and chain stores has addressed and changed families’ food patterns and preferences as such market allows for the sales of healthy, processed, and semi-processed food products at one place. Today, purchasing consuming goods at a mall and hypermarket is a routine in Tehran and other metropolitans. Moreover, there has been an upward trend in the growth of retail market due to factors such as discount and flexible prices, easy access, better services, convenient purchase, attractive retail formats in terms of large space and beautiful design.The expansion of modern retail markets in Iran has influenced Iranian households’ buying behavior; therefore, it is necessary to investigate the household’s consuming patterns by studying the important factors contributing to the household’s decision of buying from retail markets. Given that no study has investigated the effects of the influence of modern retailing on consumers’ decision to buy from traditional or modern market, this study seeks to address this concern. Therefore, the examination of consumers’ buying behaviors in relation to seven formats of modern and traditional formats is the contribution made by this study to the literature. The main aim of this study is to identify the factors that influence the choice of retail formats grocery, as well as the potential relationships between these formats. It also studies the implications of these concepts for the development of policies and marketing strategies. 

 

Material and Methods

In this study, the consumers’ behavior in relation to seven retail formats as well as the correlations between the simultaneous selection of formats were examined using Multivariate Probit Model. There is usually no such correlation and it is usually ignored in univariable models. Consequently, using such a model can retain the data related to consumers’ choices across various retail formats. The dependent variable is the consumer’s purchase within seven retail formats grocery. Buying from the stores with the intended format yields 1 and avoiding buying from them yields 0. The independent variables include demographic variables, indices such as risk minimization, price sensitivity, services, convenient buying of food products from the retail store in question. The data were collected using online questionnaire and random sampling in 2022., with the people living in Tehran and suburban areas constituting the sample of this study. The attribute in question was the extent to which consumers buy at stores with modern retail formats including hypermarket, supermarket, supermarket, mini-market, and tradition retailers (e.g. stalls and small stores, fresh markets, peddlers).Overall, 210 questionnaires were completed and they constituted the sample of this study, using Cochran formula. 

 

Results and Discussion

Based on the results of Multivariate regression Model and using Likelihood Ratio Test, the null hypothesis is rejected. Therefore, the model is confirmed. Moreover, the null hypothesis which states that the coefficients of non-diagonal elements of error terms covariance matrix are zero in retail formats is also rejected. Therefore, the use of Multivariate Probit Model is justified given the correlation between the simultaneous selections of formats by people. In other words, the family’s selection of a retail format influences the selections of other format as well. All correlation coefficients are positive in this study, indicating that traditional formats and modern formats complement each other, and they are not in competition. Consequently, consumer considers both traditional formats and modern formats simultaneously when it comes to buying food products.

 

Conclusion and Suggestions

Given the results of the current study which show no competition between traditional formats and modern formats in Iran, it is suggested that the features of target market be considered when it comes to geographically locating modern formats and traditional formats.

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Iranian Journal of Agricultural Economics and Development Research
Volume 55, Issue 3
October 2024
Pages 571-589

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