The Short-Term Effect of Store-Level Promotions on Store Choice and the Moderating Role of Individual Variables

The short-term effect of store-level promotions (weekly flyers, radio and outdoor advertising) on grocery store choice is investigated. We estimate household-level multinomial logit (MNL) models of store choice on panel data, using promotional variables, loyalty, and moderating variables. The research shows that the short-term effect of store-level promotions on store choice is significant but weak: store choice is mainly driven by loyalty. While we fail to demonstrate the moderating role of individual variables (involvement toward shopping, attitude toward the purchase of products on promotion, search for promotional information), however, the quasi-moderating role of loyalty is clearly validated. From a managerial point of view, adapting store-level promotions to individual characteristics does not seem to be relevant. Nevertheless, further research should be conducted in order to take into account the potential interactive effects of individual variables in a more systematic way, for example though a latent class analysis.