Retail Agglomeration Formats in Thai Grocery Market

Proceedings of The 5th International Conference on Opportunities and Challenges in Management, Economics and Accounting

Year: 2019


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Retail Agglomeration Formats in Thai Grocery Market

Sutthipong Meeyai



Thai consumers have been shifting from traditional retail formats to modern retail formats and frequently do ‘outshopping’. This has led to the decline of rural retailers. To improve this situation, the concept of developing retailers in market towns has been adopted. However, it is unclear what form (i.e. store format) this takes and on which factors (store image attributes and customer characteristics) the role depends. This study examines the effect of store image attributes and customer characteristics on retail agglomeration format choice for a regular grocery shopping trip. The conceptual framework is constructed following the stimulus- organism-response (S-O-R) model. The choice model is applied using the mixed logit approach. The choice set includes a traditional agglomeration retail format (TAF), a modern agglomeration retail format (MAF) and a non-agglomeration retail format (NAF). The results reveal that increases in store image attributes affecting the probability to shop at TAF and MAF with the same degree, while they have less effect on the probability to shop at NAF. The product quality, customer service level, and price are the most three important attributes affecting the retail agglomeration format choice. Furthermore, this study proposes the taxonomy of retail agglomeration formats. It indicates how retailers are planned and constructed, to what extent they are managed and marketed, and what their management styles are. This classification system can categorize existing retail formats, e.g. weekend markets, periodic markets, night markets, tourist attraction retail sites, and exhibition retail outlets which cannot be classified by the previous studies.

Keywords: retail agglomeration; store format choice; grocery market; outshopping; Thailand.