Customer loyalty towards kiranas in competitive environment; A case study

Retailing in India is emerging as a one of the largest industries estimated to account for more than 10 per cent of the country's GDP and around 8 per cent of the employment thereby having the distinction of being the country's largest source of employment after agriculture. Estimates of retail volume in India; both for organized and unorganized sectors have been assessed by different authorities. India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018, at a compound annual growth rate (CAGR) of 10% Despite the emergence of domestic organized retail activity Kirana shops at street corners still account for more than 90 percent of $590 billion retail trade in the country with distinct least possibility of any significant replacement. Due to intensive competition there is a focus on retaining customers as well as finding new customers. Designing strategies in this direction require a deep understanding of various product and store attributes which direct customer satisfaction followed by revisit of customers for repurchase leading to customer loyalty.

An attempt has been made in this paper to study various attributes of product and retail store that lead to customer loyalty. The primary data was collected through a well structured questionnaire. The questionnaire covered the questions regarding demographic factors of the consumers, product attributes and retail store attributes leading to customer satisfaction. A simple random sampling method was used to elicit the necessary information from customers visiting store outlets. In this study, customer loyalty is considered as repeated purchasing behavior of consumer towards a store. The results suggest that except product price, other store attributes and product attributes have positive effects on customer loyalty.