ARTICLE IN PRESS

Journal of Retailing and Consumer Services 13 (2006) 221230

www.elsevier.com/locate/jretconser

The inuence of retailer reputation on store patronage

Wei-Ming Oua, Russell Abrattb,, Paul Dionc
a

Department of Industrial and Business Management, Far East College, 49 Chung-Hua Road, Hsin-Shih, Tainan County744, Taiwan, ROC
H. Wayne Huizenga School of Business and, Entrepreneurship, Nova Southeastern University, 3301 College Road, Fort Lauderdale, FL 33314, USA
c
Susquehanna University

Abstract
Retailer reputation is an important factor that inuences consumers store patronage. A survey was conducted among 356 grocery
store shoppers to study the effects of retailer reputation on their store choice patterns. A Structural Equation Modeling approach
was used. Results show that retailer reputation has an effect on purchase frequency, travel time and expenditure levels only when its
inuence was moderated by demographic variables. This suggests that the mode of inuence on the dependent variables is more
complex than the literature suggests. Retailers must think of their reputation within specic target markets, as the payoff in terms of
shopping expenditure differs per target group. We discuss implications for retailing research and practice.
r 2005 Elsevier Ltd. All rights reserved.
Keywords: Reputation; Store patronage; Retailing

1. Introduction
Both scholars and practitioners suggest that favorable
corporate reputation results in business survival and
protability (Balmer, 2001; Gray and Balmer, 1998;
Roberts and Dowling, 2002; Van Riel and Balmer,
1997). It is an effective mechanism to maintain or
accomplish competitive advantage (Fombrun et al.,
2000; Fombrun and Shanley, 1990; Van Riel and
Balmer, 1997). Moreover, with the growing media
attention and increasing critique of private business
corporations by various interest groups, marketing
researchers and practitioners have begun to understand
the value of corporate reputation (Christensen and
Askegaard, 2001). Retailers with good reputations are,
among other things, ethical, offer customers good value,
communicate honestly, and are well managed.
There has been some confusion as to the terminology
of corporate image, corporate reputation, and retailer
reputation. Corporate image stands for the current and
Corresponding author. Tel.: +954 262 5123.

E-mail addresses: weiming@cc.fec.edu.tw (W.-M. Ou),

abratt@huizenga.nova.edu (R. Abratt), dion@susqu.edu (P. Dion).
0969-6989/$ - see front matter r 2005 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jretconser.2005.08.014

immediate reection that the publics have toward a

corporation (Bick et al., 2003; Gray and Balmer, 1998;
Harris and De Chernatony, 2001), while corporate
reputation represents constituents cumulative judgments of rms over time (Fombrun and Shanley, 1990;
Gotsi and Wilson, 2001). Therefore, the comprehensible
distinction between corporate image and corporate
reputation is its overall development over a long time
period. Corporate reputation, representing a relatively
consistent store of goodwill, is more stable and durable
than corporate image as a consequence of the chronic
process of development (Markwick and Fill, 1997).
Retailer reputation excludes the tangible attributes of
the store, such as location and layout, which are
included in store image measures. Since physical
facilities, locations, and atmospheres of every store are
different, images of each store in a retail chain or
franchise may vary. However the reputation of the retail
chain remains constant, even though individual outlets
may have different images. For a good analysis of the
differences see the study by Nguyen and Leblanc (2001).
The primary objective of this study was to conduct an
analysis that illustrates the effects of retailer reputation
on consumers store patronage patterns in shops with

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similar products. The consumer store choice behaviors

studied are shopping expenditure, travel time to the
store, and patronage frequency. The secondary objective
is to determine whether demographic segments, such as
age, gender, income, and education, mediate the effect
of retailer reputation on consumer behavior.

2. Literature review
2.1. Corporate reputation and retailer reputation
Corporate reputation is a relatively stable, long-term,
collective judgment by outsiders of an organizations
actions, and achievements. It implies a long lasting,
cumulative assessment rendered over a long time period
(Gioia et al., 2000). Saxton (1998) denes corporate
reputation as the reection of an organization over time
as seen through the eyes of its stakeholders and
expressed through their thoughts and words. Alessandri
(2001) afrms that the corporate reputation is formed
over time by repeated impressions of the corporate
image. Other researchers agree with this view (Fombrun
and Shanley, 1990; Gray and Balmer, 1998; Yoon et al.,
1993). Reputation can be diffused through two routes:
by communication between marketers and customers,
and by word-of-mouth between customers (Caruana,
1997; Yoon et al., 1993). Numerous researchers have
recognized the important role of corporate reputation as
a valuable asset that allows a rm to achieve persistent
protability, or sustained superior nancial performance (Balmer, 1995; Balmer, 2001; Nguyen and
Leblanc, 2001; Roberts and Dowling, 2002; Yoon
et al., 1993).
Retailers put great emphasis upon developing and
sustaining their reputation (Burt and Carralero-Encinas,
2000). Retail customers were inclined to use the
products and services of organizations with favorable
reputations (Balmer and Wilson, 1998), and are more
loyal to those retailers who they perceived having
favorable reputations (Nguyen and Leblanc, 2001).
Retailer reputation is not dened in the literature, as
the term corporate reputation is used when describing
retailers as well as other organizations. We thus dene
retailer reputation as a consumers and other stakeholders perceptions of a retail chain organization over
time. Studies have reported that the positive reputation
associated with the store is one of the important
antecedents of consumers purchase intentions (Dodds
et al., 1991; Grewal et al., 1998).
A comparable concept of retailer reputation is store
image. Burt and Carralero-Encinas (2000) characterized
store image as the mixture of tangible and intangible
dimensions, and the complex of meanings and relationships attributed to retailers by customers. Previous
studies have examined the effects of store image on

shoppers store choice behavior, and discovered that

favorable store image has a positive impact on store
choice, frequency of patronage at a particular store,
store satisfaction, store loyalty, and is a critical
determinant of successful retailing strategy (e.g. Bloemer
and De Ruyter, 1998; Chowdhury et al., 1998; Darley
and Lim, 1999; Grewal et al., 1998; Jones, 1978; Joyce
and Lambert, 1996; Nevin and Houston, 1980; Reardon
et al., 1995). Different dimensions of store image have
been suggested by scholars. Jones (1978) concluded that
there are six dimensions. Mazursky and Jacoby (1986)
identied seven, and Lindquist (1974) identied nine
attributes. Among these attributes, merchandise, service
and location appear to be the key image functions.
2.2. Determinants of store choice behavior
One of the critical decisions confronting the consumer
in interacting with retail stores concerns where to shop
(Nevin and Houston, 1980). A number of approaches
have been used to determine consumer store choice
behavior. Belk (1975) suggests that there are ve
environmental factors that may inuence shopping
behavior; physical surroundings, social surroundings,
temporal perspectives, task denition, and antecedent
states such as temporary moods. Koppelman and
Hauser (1978) described ve constructs of shopping
destination attractiveness; variety, quality, satisfaction,
value and parking. According to Hackett et al. (1993),
the principal determinants of shopping behavior are;
general evaluation, including safety and quality of
merchandise, physical environment, efciency, including
travel distance from home, accessibility, and the social
environment, including store atmosphere.
Bell et al. (1998) developed a store choice behavior
model whose fundamental principle was that each
consumer is more likely to patronize the store with the
lowest total shopping cost. Baker et al. (2002) suggested
a store choice model that includes three types of store
environment cues as exogenous constructs, and various
store choice criteria and store patronage intentions as
the endogenous construct. From observing actual
consumer shopping behavior, the determinants of
shopping destination choice behavior could be classied
into ve main categories: characteristics of price,
characteristics of accessibility, characteristics of atmosphere, demographic characteristics of the consumers,
and the retailers reputation (e.g. Dawar and Parker
1994; Tang et al., 2001; Turley and Milliman, 2000).
2.3. Conceptual development of research model
The logical assumption about shopping behavior is
that consumers will buy in larger quantities from a store
that has a good reputation, but the effect of this is
shopping in that particular store less frequently.

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Previous studies suggest that there is a positive relationship between a favorable store name and a customers
willingness to buy (Dodds et al., 1991; Grewal et al.,
1998). Therefore, it may be hypothesized that as the
consumers perceived reputation of the retailer becomes
more favorable, the larger amount of shopping expenditure is made, and the consumer will then patronize
that store less frequently. The customer may derive some
added value from store reputation (Grewal et al., 1998).
If there is indeed an added value from store reputation
on shopping frequency, travel time and expenditure,
then the amount of variance accounted for in the
expenditure per trip should exceed that accounted for by
shopping frequency and travel time. Otherwise travel
time, and shopping frequency could be thought to vary
independently of store reputation. Customer satisfaction
appears higher in purchases from retailers with superior
reputations compared to items purchased from retailers
with lower reputations. The added satisfaction may
cause shoppers to be willing to increase their travel time
to the store (Darley and Lim, 1999; Kahn and
Schmittlein, 1992). Hence, one expects the positive link
between retailer reputation and travel time.
In addition, consumers demographic characteristics,
such as age, gender, income, and education, may
inuence the effect that retailer reputation has on
consumer behavior (Kim and Park, 1997; Popkowski
Leszczyc et al., 2000). Our conceptual model is shown
in Fig. 1.
The nal model depicted in Fig. 1 shows interaction
effects between reputation and age, education and
income as predictors of the dependent variables. The
use of SEM allows the authors to estimate these effects

Shopping
Expenditure

223

simultaneously and is thus more true to the simultaneous nature of the impact of these variables in the
research model. It also allows for convenient estimation
of the effects of individual predictors.
This model is constructed on the assumptions that: (1)
as the consumers perceived reputation of the retailer
becomes more favorable, the greater the amount spent
per shopping trip will be; (2) as the consumers perceived
reputation of the retailer becomes more favorable, the
more time the consumer will be willing to spend
traveling to that store; (3) as the consumers perceived
reputation of the retailer changes, the frequency of store
patronage to a particular store will change; and (4) the
effect of consumers perceived reputation of the retailer
on patronage behavior is moderated by age, gender,
income and education of the consumer.
2.4. Retailer reputation effects on shopping expenditure
Positive reputation associated with the store is the
antecedent of consumers purchase intentions (Dodds et
al., 1991; Grewal et al., 1998). Baker et al. (2002)
indicate that store patronage intentions are a function of
merchandise quality and value. In addition, consumers
tend to use retailers reputation as one of the most
important signals of product quality, especially in the
brand absent circumstance (Bell, 1999; Dawar and
Parker, 1994). This is often the case in grocery shopping
conditions, because many types of merchandise such as
vegetables, meat, fruit and deli, are brand absent in
grocery stores. As the consumers perceived reputation
of the retailer becomes more favorable, the higher
product quality and value will be perceived and hence
consumers will exhibit higher purchase intentions at
stores with a positive reputation. Since the shoppers
purchase intentions increases, their shopping expenditure consequently rises. Therefore, we hypothesize:
H1. As the consumers perceived reputation of the
retailer becomes more favorable, the larger amount of
shopping expenditure per shopping trip will be.

H1 (+)

H2 (+)
Retailer
Reputation

Total Travel
Time
H3 (+)

H4

Patronage
Frequency

Consumer
Characteristics
Fig. 1. Conceptual framework of retailer reputation and consumer
behavior.

2.5. Retailer reputation effects on travel time

Shopping destination choice is conventionally viewed
as the outcome of a trade-off between total costs of
travel and trip end benets derived from the attractiveness of the destination (Jones, 1978; Koppelman and
Hauser, 1978; Koppelman, 1980; Ou, 1999). The travel
time to a store is assumed to measure the effort, both
physical and psychological, to reach a retail outlet
(Darley and Lim, 1999). When a potential consumer is
selecting shopping destination alternatives, if all the
other inuential factors are equal, the purchases will
be made by spending the minimum travel time to the
nearest shop that stocks the desired product (Hackett

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W.-M. Ou et al. / Journal of Retailing and Consumer Services 13 (2006) 221230

et al., 1993). Travel time has negative effects on the

utility and choice of ones shopping destination.
However, the negative impact of travel time can be
compensated for by enhanced store attractiveness
(Darley and Lim, 1999). Therefore, as store attractiveness enhances, buyers may be more willing to spend
more time traveling to the destination with a favorable
reputation. Thus, one can predict that there is a positive
relationship between retailer reputation and a consumers travel time. Therefore, we hypothesize:
H2. As the consumers perceived reputation of the
retailer becomes more favorable, the travel time to the
store will increase.
2.6. Retailer reputation effects on frequencies of store
patronage
Previous research shows that the probability that
consumers will shop at a given store increases as the
perception of the store becomes more positive (Darley
and Lim, 1999). Since retailer reputation serves as the
signal of attractiveness, as the consumers perceived
reputation of the retailer becomes more favorable, the
frequencies of store patronage may decline. This is
because if the purchase amount per shopping trip rises
and total expenditure remains constant, shopping
frequency must decline. Therefore, we hypothesize:
H3. There is a signicant positive relationship between
consumers perceived reputation of the retailer and store
patronage frequency.
2.7. Consumers demographic characteristics effects on
retailer reputation
Age is hardly ever employed as an independent
variable in corporate reputation studies. However, age
may serve as a proxy for many factors including life
experience and the socialization process, and it is usually
strongly related to consumption patterns and preferences in store choice (Gonzalez-Benito et al., 2000;
Hoyer and MacInnis, 2001; Joyce and Lambert, 1996).
Age may have effects on the perceived reputation of the
retailer. Given that older consumers are expected to
exhibit patterns of shopping behavior that differ from
those of younger consumers, the consumers perceived
reputation of the retailer may be examined as a function
of age-related perceptions (Bhat et al., 1998; Burt and
Gabbott, 1995; Gonzalez-Benito et al., 2000; Joyce and
Lambert, 1996; Shiu and Dawson, 2001). Hence, we
hypothesize:
H4a. The effect of consumers perceived reputation of
the retailer on consumers shopping expenditure, travel
time, and patronage frequency, is moderated with the
age of the consumer.

Previous research has identied gender differences in

shopping behavior, travel time sensitivity, retail format
choice, and household shopping responsibility (Bhat et
al., 1998; Burt and Gabbott, 1995; Dholakia, 1999;
Otnes and McGrath, 2001; Shiu and Dawson, 2001;
Zeithaml, 1985). Since men and woman have different
shopping behavior and different reactions to the retail
marketing mix, it is likely that they have different
perceptions of retailer reputation, and shop differently
in terms of amount spent, travel time and patronage
frequency (Bailey, 2005). Therefore, it is assumed that
the effect of consumers perceived reputation of a
retailer on shopping expenditure, travel time, and
patronage frequency is moderated by the gender of the
consumer.
We thus hypothesize:
H4b. The effect of consumers perceived reputation of a
retailer on consumers shopping expenditure, travel
time, and patronage frequency varies with the gender
of the consumer.
Income is a variable strongly associated with some
psychological variables. Previous studies report that the
travel time sensitivity and store choice behavior of highincome shoppers differs from that of low-income
shoppers (Alwitt and Donley, 1996; Bhat et al., 1998;
Gonzalez-Benito et al., 2000; Hoch et al., 1995;
Zeithaml, 1985). Given that high-income consumers
tend to demonstrate patterns of store choice behavior
that differ from those of low-income consumers, the
effect of consumers perceived reputation of the retailer
on consumer behavior may be investigated as a function
of an income-related variable. Hence, we hypothesize:
H4c. The effect of consumers perceived reputation of
the retailer on consumers shopping expenditure, travel
time, and patronage frequency, is moderated by the
income of the consumer.
Studies have shown that more educated consumers
have a higher opportunity cost; therefore they are less
price sensitive in supermarket store choice (Hoch et al.,
1995). However, the relationship between consumers
perceived reputation of the retailer and their level of
education remains largely untested. To test this, we
hypothesize:
H4d. The effect of consumers perceived reputation of
the retailer on consumers shopping expenditure, travel
time, and patronage frequency is moderated with the
education of the consumer.
To summarize, it is hypothesized that:
H4e. The effect of consumers perceived reputation of
the retailer on consumer behavior varies with the age,
gender, income and education of the consumer.

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225

3. Methodology

3.1. Pilot study

To test the conceptual model, a survey to collect data

from consumers as they were leaving grocery stores was
conducted. The study population consists of shoppers
of major grocery chain stores in Florida, namely
Albertsons, Publix and Winn-Dixie. Ten stores were
chosen as sites for data collection, two Albertson stores,
and four stores each from Publix and Winn-Dixie,
respectively. At Publix, 160 consumers were sampled,
80 at Albertsons, and at Winn-Dixie 160. Potential
respondents were approached and asked to participate
in a short interview. They were told that the research
was being conducted by a local university and the
individual results were to be kept strictly condential.
The large sample size was used partly to mitigate the
effect of different patterns of stores for different
responses. For example, some respondents might
have a high reputation store close by, while others
did not. In a large enough sample these variations
could be thought to average out. Mapping each
customers geographical prole of stores was not
attempted.
The instrument utilized for this study was the 20-item
reputation questionnaire that was developed by
Fombrun et al. (2000). The 20 items were grouped
into six categories: emotional appeal, products and
services, vision and leadership, workplace environment,
social and environmental responsibility, and nancial
performance. According to Fombrun et al. (2000),
Cronbachs alpha for the instrument exceeded 0.84,
which indicates that it is reliable. They concluded
that the reputation instrument is valid, reliable and a
robust measure of corporate reputation (Fombrun
et al., 2000). Several academics have applied the
instrument to organizations in different industries
and report it to be valid and reliable (e.g. Groenland,
2002; Walsh and Wiedmann,2004). The patronage
frequency, shopping expenditure, travel time, and
consumer demographic characteristics were added to
the questionnaire.

In order to assure the integrity of the questionnaire,

pre-testing of the instrument was conducted by administering the questionnaire to a group of academic experts
and 50 shoppers who reviewed the physical appearance
and content. The results of the pre-testing were
satisfactory. A conrmatory factor analysis was undertaken, and all of the multi-item scales yielded one-factor
solutions. For each scale, the individual scale items
exceeded the recommended minimum standards in terms
of construct reliability (Bagozzi and Yi, 1988).
3.2. Data analysis methods
To test the research model, structural equation
modeling (SEM) was applied to the data using the
AMOS graphics program (AMOS, 1999). To test the
interaction effects, the independent variables were
multiplied together and the product treated as an
independent variable. In cases of missing data, the
missing entry was excluded from the data analysis.

4. Results
Data were collected by means of exit interviews at
grocery stores in Florida. A total of 356 qualied
observations were employed in this study. The factor
analysis and reliability results for the research sample
are shown in Table 1.
The demographics of the sample are shown in
Table 2.
The respondents average shopping expenditure per
trip was $64.28 (in 2004 US dollars). Of the sample,
77.8% of shopping trips were shorter than 10 min, while
about 90% of shopping trips were no longer than
15 min. Thirty-one percent of shoppers visit their
preferred grocery store once a week. The average
frequency of store patronage per person per month
was 5.45.

Table 1
Factor analysis and reliability results for research sample
Factor

Statement

Rotated factor loading

Cronbachs a

Company reputation

I admire and respect the company.

I trust the company.
Develops innovative products and services.
Offers high quality products and services.
Has a clear vision for its future.
Is well managed.
Looks like a good company to work for.

0.83
0.67
0.69
0.70
0.75
0.72
0.76

0.86

Performance perceptions

Tends to outperform its competitors.

Looks like a company with strong prospects for future growth.

0.87
0.78

0.79

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226

Table 2
The demographics of the sample
Number

Shopping
Frequency
Percent

Cumulative percent

Distribution of average shopping expenditure (USD)

$0$20
35
9.8
9.8
$21$40
96
26.7
36.8
$41$60
85
23.9
60.7
$61$80
53
14.9
75.6
$81$100
39
11.0
86.5
$101$150
42
11.8
98.3
Over 150
6
1.7
100.0
Total
356
100.0
100.0
Distribution of travel time (min)
Under 5
157
610
120
1115
45
16 and over
34
Total
356

6
102
101
82
40
25
356

Store 0.33
Reputation
0.54

0.27
44.1
33.7
12.6
9.6
100.0

44.1
77.8
90.4
100.0
100.0

Distribution of patronage frequency (every 4 weeks)

1
8
2.2
2.2
2
23
6.5
8.7
3
18
5.1
13.8
4
111
31.2
44.9
5
44
12.4
57.3
6
59
16.6
73.9
7
7
2.0
75.8
8
61
17.1
93.0
9
3
0.8
93.8
10
8
2.2
96.1
12 and over
14
3.9
100.0
Total
356
100.0
100.0
Distribution of age
Under 20
2130
3140
4150
5160
Over 60
Total

-0.41

1.7
28.7
28.4
23.0
11.2
7.0
100.0

1.7
30.3
58.7
81.7
93.0
100.0
100.0

Distribution of household income (USD)

Less than $20,000
22
6.2
$20,000$40,000
105
29.5
$40,000$60,000
121
34.0
$60,000$80,000
56
15.7
$80,000$100,000
33
9.3
$100,000 and over
19
5.3
Total
356
100.0

6.2
35.7
69.7
85.4
94.7
100.0
100.0

Distribution of education
High school
98
Vocational school
39
University
180
Graduate school
39
Total
356

27.5
38.5
89.0
100.0
100.0

27.5
11.0
50.6
11.0
100.0

The majority of the respondents in this study were

between 20 and 50 years old (80%). Gender plays an
important role in the shopping trips since they were
dominated by females (Prevedouros and Schofer, 1991;
Kim et al., 1994). Females performed about 70% of the
shopping trips in this research, which is consistent with

0.17
Income
x
Reputation
0.15 0.40
0.29
Age
x
Reputation

0.34

0.30
Expenditure
per
Trip

0.12
-0.13
0.29

0.13
0.08
Travel
Time

0.36
Education
x
Reputation

Moderating variables in dotted line box,

Standardized coefficients

Fig. 2. Research Model with signicant paths and coefcients shown.

previous studies. The average household income of the

sample is $51,882 per year (in 2004 US dollars). The
majority of the respondents have earned at least a
bachelor degree, which implies a fairly educated sample.
Moreover, the most common household type in the data
is a two-person family (30.3%), but the mean household
size is 3.03 people per household.
4.1. Retailer reputation effects on shopping expenditure
SEM was used to test all hypotheses. The nal model
is shown in Fig. 2.
The w2 value obtained was 6.28 with ve degrees of
freedom and the p-value was. 0.28. The goodness of t
index, the adjusted goodness of t index and the normed
t index were 0.996, 0.968 and 0.998, respectively. This
indicates a good t of the model to the data given that
the usual standard for these indices is 0.90 or above
(Hair et al., 1998). The p-value is quite good given that
the large sample of 356 tends to depress the p-value.
4.2. Retailer reputation effects on frequency of purchase,
travel time and expenditure per shopping trip
The standardized model coefcients that achieved
signicance and the critical ratios (CR) dened as
coefcient size/CR1 are presented in Table 3.
1
The AMOS SEM program computes the ratio of the coefcient to
its standard error for all coefcients. It has an approximately standard
normal distribution and thus can be used to test hypotheses concerning
the coefcients (AMOS 1999, p. 74).

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227

Table 3
Standardized coefcients and critical ratios

Table 4
Summary of hypothesis tests

Coefcient

Hypothesis

Conclusion

For reputation un-moderated effect

H1: Rep.-Expend
H2: Rep.-Travel
H3: Rep.-Freq.

Not supported
Not supported
Not supported

For reputation moderated effect

H4a: Rep.-Travel, moderated by age
H4a: Rep.-Expend, moderated by age
H4a: Rep.-Freq., moderated by age
H4b: Rep.-Expend, moderated by gender
H4b: Rep.-Travel, moderated by gender
H4b: Rep.-Freq., moderated by gender
H4c: Rep.-Travel, moderated by income
H4c: Rep.-Expend, moderated by income
H4c: Rep.-Freq., moderated by income
H4d: Rep.-Travel, moderated by age
H4d: Rep.-Expend, moderated by age
H4d: Rep.-Freq., moderated by age

Supported
Supported
Not supported
Not supported
Not supported
Not supported
Supported
Not supported
Not supported
Supported
Not supported
Not supported

Standardized coefcient Critical ratio

Rep.-Age  Rep.
0.54
Rep-Income  Rep.
0.33
Rep.-Educ.  Rep.
0.27
Age  Rep.-Income  Rep.
0.15
Income  Rep.-Educ.  Rep. 0.40
Age  Rep.-Travel
0.29
Age  Rep.-Expend
0.12
Income  Rep.-Expend
0.34
Educ.  Rep.-Expend

0.13
Freq.-Expend

0.41
Travel-Expend
0.13

12.11*
5.44*
5.80*
2.54*
8.55*
2.54*
2.25*
3.60*

2.31**

8.86*
2.80*

Note: Interaction variables shown as product of two variables.

*Signicance at the 0.05 level.**Signicance at the 0.01 level.

Tables 3 and 4 depict that retailer reputation was

shown to have an effect on purchase frequency, travel
time and expenditure levels only when its inuence was
moderated by demographic variables. This suggests that
the mode of inuence on the dependent variables is more
complex than the literature review suggests. What the
results mean is that reputation only has more of an
effect when it inuences certain demographic groups.
Reputation impacted expenditure in the higher income
groups (CR 3.60, po0:01). Lower income buyers might
stick to a budget in their shopping trips whereas
wealthier patrons would have the discretion to add to
their purchases, which might explain this. It was also
shown that older shoppers were more inuenced by
retailer reputation in their expenditure levels (CR 2.25,
po0:01) This might be explained by older consumers
having formed shopping habits from positive and
negative experiences with retailers. They have had the
opportunity to form denite preferences for retailers
they have come to know. Retailer reputation was
negatively moderated by shopper education. More
educated buyers are less inuenced in the purchase
amount by retailer reputation CR
2.31, po0:01).
More educated buyers may have the ability to use other
cues than reputation to assess product value. The
coefcient may be negative because higher retailer
reputation may lead to higher prices that are resisted
by shoppers buying on utilitarian criteria. A total of
30% of the variance in expenditure was accounted for
by the model variables as shown in Fig. 2. Because the
amount of variance in expenditure per trip (R2 0.30),
was more than was explained by travel time and
shopping frequency alone, it was concluded that the
reputation variables had an independent effect.
4.3. Travel time
Retailer reputation was only an inuence on the travel
time when moderated by age (CR 2.54, po0:01). As in

the case of expenditure, retailer reputation appears to

have more inuence on travel time with older shoppers.
A possible explanation is that older shoppers, who are
perhaps retired, would have the time to travel to a high
reputation store whereas younger ones would not have
the time. Neither income nor education served as a
moderating variable for retailer reputation on travel
time. Thus, there is no tendency for reputation to
enhance travel time whether moderated by education or
income or not. It could be argued that the time factor
dominates, and that only the older age group has this
time available. The model variables accounted for only
8% of the variance in travel time as shown in Fig. 2.
4.4. Frequency of shopping
Fig. 2 shows that the frequency variable is not
impacted by retailer reputation or any other variable.
However, it has a large negative effect on expenditure
(CR
8.86, po0:01) and the coefcient was the largest
in the model (
0.41). Thus, frequency on shopping has a
strong depressing effect on the expenditure per trip. This
is understandable if expenditure per unit time is
considered to be relatively xed and is divided over
more trips in the case of higher frequency. The model
shows shopping frequency to be an exogenous variable.
The frequency decision appears to be immune from
retailer reputation either moderated by demographics or
not. It may be that shoppers have a regular routine, or
number of shopping trips performed per week, or month
and that this is the starting point for shopping decisions.
The expenditure per trip would be dependent on the
frequency decision unless the shopper decided to
increase the total purchase amount.

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A summary of the results of the hypothesis tests is

presented in Table 4.
As noted before the hypothesized un-moderated
relationships between retailer reputation and shopping
frequency, expenditure and travel time were not
signicant. The use of moderating variables, as operationalized by the products of buyer behavior and
demographic variables produced a lot of productvariables to be tested. This meant that only a portion
of the research hypotheses were supported. This occurs
when many variables in a SEM model compete for
variance to explain, because each path coefcient is
computed holding other relationships constant.

5. Discussion
Contrary to the expected ndings retailer reputation
did not inuence shopping frequency, expenditure per
trip or travel time in an un-moderated fashion.
Frequency of shopping was found to be an exogenous
variable with no predictors. This nding is intuitively
appealing if one supposes that shoppers have a regular
shopping trip planned perhaps on a weekly basis. If this
is the case, it would be hard to imagine that store
reputation would have an effect on what may well be the
initial decision in the shopping decision sequence.
The next most inuential factors in determining
expenditure were reputation moderated by income,
reputation moderated by education and reputation
moderated by age in that order. The most signicant
implication of this is that retailer reputation may
have a signicant inuence only on certain demographic groups rather than in a uniform manner. This
is a more complicated method of inuence than the
present models of reputation inuence propose. If
expenditure per trip is the criterion variable for retail
management, this nding would suggest changes in
present broad-brush approaches to retail brand equity
development.
Travel time was inuenced by retailer reputation only
when older shoppers were involved. Older shoppers may
be the only segment capable of being inuenced by
reputation because extra travel time would not impose
on their living schedule the way it might upon a younger
employed shopper. It was also found that travel time did
have some inuence on shopping expenditure. An
interpretation of this might be that older shoppers
would be inclined to rationalize the xed cost of travel
time by purchasing a larger amount. One question that
remains unanswered in this research is whether the
assortment of goods purchased is inuenced by retailer
reputation.
Gender had no inuence on any of the dependent
variables. Nor did one gender or the other show more
responsiveness to retailer reputation.

Overall reputation does not appear to have a large

broad based inuence on shopping behavior at least in
the grocery sample used here. It appears to be inuential
only when the demographic characteristics of shoppers
were not in conict with the possible inuence of retailer
reputation. Retailer reputation can be thought to be
subordinated to everyday shopper domestic routines.

6. Managerial implications
The ndings of this research suggest that retailers
think more in terms of their reputation with specic
target groups where the inuence of reputation would
have the best payoff in terms of shopping expenditure.
They should also realize that frequency of shopping is
probably given that cannot be treated as a manageable
consumer response behavior. Gains are to be made
though in targeting groups susceptible to retailer
inuence namely; older, high income, lower educated
consumers. Travel time is also not a manageable
variable for most groups. This group appears to be
willing to travel farther and spend more money in
response to retailer reputation but their frequency of
shopping appears xed. A possible position might be,
Worth the trouble to those who want to shop right.
An important caveat the reader should keep in mind is
that the process of shopping for groceries, often dened
as a convenience good, may be very different from the
situation with a shopping or specialty good where
retailer reputation would be expected to be much more
inuential. An example would be jewelry or clothing.

7. Research limitations
Given the limitations imposed by the method of data
collection, consumer behavior for single-stop shopping
trips is investigated in this paper. However, in reality,
shoppers may reduce their travel cost by shopping trip
chains. In other words, shoppers may make chainshopping trips together or combine store visits with
other trip purposes. Consumer behavior of multiplestop shopping trips, namely, shopping trip chains, may
have different behaviors of patronage frequencies and
travel time from single-stop shopping trips. Shopping
trip chains were not included in this research. The model
also did not incorporate individual customer store
geography.

8. Recommendations for future research

Future research may investigate whether the relationships between corporate reputation and consumer
behavior vary across different retailers (for example,

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convenient stores, discount outlets, and fast food

restaurants) and different types of merchandise (for
example, clothes, food, and luxury products). The
nature of the inuence of corporate reputation in
different purchasing contexts remains an essential issue
for future retailing reputation studies.
The relationships between retailer reputation and
general price expectations may be another interesting
topic for further research. Previous research reports that
as customers perceptions of store design cues become
more favorable, customers will perceive monetary prices
to be higher (Baker et al., 2002). However, few, if any,
empirical studies pertaining to the possible links
between retailer reputation and consumers general
price-level expectations are available. The question as
to whether demographic variables moderate these effects
could also be investigated.
Although this research focuses on the relationship
between retailer reputation and consumer behavior for
traditional stores, one can extend the implications of this
research to online retailers as well. The reputation of
Internet brands is difcult to build, because the lack of
physical presence and human interaction makes online
retailers less certain to customers than traditional
businesses (Porter, 2001). Retailer reputation seems to
be even more essential for electronic commerce than for
traditional business since positive reputation can ease
buyers uncertainty toward virtual businesses. Moreover, reputation can be extended to mitigate uncertainties about the product, to cut the cost of introduction,
and to facilitate faster market penetration (Caruana,1997; Robertson and Gatignon, 1986), for both
traditional businesses and electronic commerce. The
possible links between retailer reputation and online
shopping expenditure, patronage frequency, and number of site visitors could be examined in future research
for better understanding of the connection between
retailer reputation and the electronic commerce.

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