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Abstract
We study the state of food retail system serving an ethnic minority community. This group, Israeli Arabs, enjoys a relatively high
standard of living but continues to make many food purchases in a variety of small, specialized retail food formats. In contrast, the
surrounding Jewish population is mostly shopping in supermarkets.
Data from a survey of consumer shopping behavior across formats of different product lines are used to identify the barriers to
the advancement of the supermarket format in this minority sector. Our study shows that socioeconomic factors, found in earlier
supermarket diffusion studies to be the main barrier, have no impact in this case. We identify the tendency to purchase perishable
food items in traditional outlets and the geographical diffusion barrier (distance of supermarket formats) to be the main limitation
on supermarkets market share growth. Further, we nd that both these factors are inuenced by underlying cultural and ethnic
factors characterizing the study population.
r 2004 Elsevier Ltd. All rights reserved.
Keywords: Retail modernization; Supermarkets; Retail formats; Cross format shopping; Marketing to ethnic minority community; The role of
ethniccultural factors; Food shopping patterns; Israel; Israeli Arabs
1. Introduction
The replacement of small family owned, traditional
food stores with supermarkets is a universal phenomenon. This process of retail modernization has been the
subject of a large number of studies. Many have focused
on less developed countries (LDCs) (Goldman, 1981;
Kaynak and Cavusgil, 1982; Slater and Henley, 1969),
others, on emerging economies (Findlay et al., 1990;
Kaynak, 1985; Samiee, 1993). Typically, these studies
describe the weaknesses of the traditional retail system,
and analyze the limitations on the supermarket formats
acceptance.
Traditional food retail systems are not only typical to
LDCs and to emerging economies. They exist also in
Corresponding author. Tel.: +972 2 651 1981; fax: +972 2 654
0152.
E-mail addresses: msgold@mscc.huji.ac.il (A. Goldman),
hayiel@mscc.huji.ac.il (H. Hino).
0969-6989/$ - see front matter r 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jretconser.2004.10.002
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2. Theoretical framework
The process of food retail modernization involves an
increase in the market share of supermarkets. The rich
literature on supermarket diffusion emphasizes the role
played by geographic and socioeconomic factors. To
increase supermarket market share retailers must
penetrate new segments and increase supermarket
accessibility. Studies (Appel, 1972; Findlay et al., 1990;
Goldman, 1981; Kaynak and Cavusgil, 1982; Kumcu
and Kumcu, 1987) show higher socioeconomic status
consumers to be more likely to switch to modern
supermarkets. The reason: a higher opportunity cost of
time is making multi-stop shopping in many small stores
more costly than the one-stop shopping associated with
the supermarket (Betancourt and Gautschi, 1986, 1990).
In addition, these households have access to better
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7. Hypotheses tests
Following Goldman et al. (2002), we specify format
choice as a binomial logit model across all product
categories. Format choice for each product for each
household was treated as an individual observation, Yi
taking the value 1 if a household purchased a product
mainly at a supermarket, and 0 if mainly at a traditional
format. We estimated the contribution of each of the
explanatory variables discussed above to the overall
goodness of t of the binomial logit model. Thus, y is
modeled directly as the dependent variable in a model
incorporating the logistic function specication of the
form:
PYi 1
1
1 exphbxii
6. Descriptive statistics
8. Measures
Respondents average age was 42.3 years. A household had an average 5.47 persons with an average of 1.4
fully employed members (65% one member employed,
25% two and 10% three or more). A households
average monthly income was 1195$ and 44% of the
respondents had high-school education and 8% a
college one. The average number of cars owned by a
household was 0.69 (37% had no car, 58% owned 1 car
and 5% owned 2 cars). In addition, over 10% of the
sample enjoyed the use of an employers car. Most
interviewees owned their house/apartment. The average
home size was 3.84 rooms with an average density of
1.53 persons per room.
The average number of weekly shopping trips by a
household to all food stores was 12.2. Of these 6.3 were
to neighborhood groceries, 0.97 to supermarkets, 1.1 to
fruit and vegetables stores, 0.7 to butchers, 1.8 to sh
stores and 1.4 to open markets (mostly for fruit and
vegetables and for fresh bakery products).
The average distance to the nearest supermarket was
14.7 min (21.4 min to the nearest Jewish chain supermarket and 11.7 min to an Arab owned one) and 7.6 min
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9. Findings
We estimated the effect of the different variables in a
nested fashion. We rst included travel time, then
socioeconomic variables, next the perishability variable,
then the perceptions of store attributes and nally added
the meal preparation variables. The hypotheses were
evaluated in the general model. Also, the sign and
signicance level of the coefcients in all six types of
variables and the differences in goodness of t, as each
variable set is incrementally added, indicate the relative
contribution of each to the overall explanatory power of
the model. We also included a constant to capture the
residual preference for supermarkets after controlling
for all six variable groups. Estimates for the six models
and for the base model appear in Table 1.
2
We also collected information about perceptions of price levels. We
found that while supermarkets were perceived as somewhat less
expensive than traditional formats, these differences were not
signicant. Consequently, this variable was not included in the
analysis.
3
The average distance difference between neighborhood grocery
stores (non-perishables) and supermarkets is 10 min vs. an average
distance difference of only 4 min between supermarkets and the
perishable stores (vegetable, butcher, sh stores) and 7 min to open
markets.
Table 1
Maximum likelihood estimates of logit models of format choice (all product lines)a
Independent variables
Expected
coefcient sign
Distance variable
Travel time difference
Model 3
Model 4
Model 5
Model 6
Model 7
Base model
Model 1+travel
time distance
Model 2+consumer
socioeconomic
characteristics
Model
3+perishability
Model 4+store
attributes
Model
5+freshness
Model 6+food
preparation
0.56
(o.0001)b
0.17
(o.0001)b
0.07
(o.0001)
0.55
(0.0002)b
0.07
(o.0001)b
0.04
(0.82)
0.08
(o.0.0001)b
1.21
(o.0001)b
0.06
(o.0001)b
0.88
(o.0001)b
0.05
(o.0001)b
4.54
(o.0001)b
0.04
(o.0001)b
0.07
(0.09)c
0.35
(o.0001)b
0.07
(0.13)c
0.27
(0.0001)b
0.06
(0.17)
0.4
(o.0001)b
0.11
(0.03)d
0.36
(0.0001)b
3.33
(o.0001)b
0.01
(0.83)
0.3
(0.0002)b
0.13
(0.014)d
0.27
(0.0001)b
3.57
(o.0001)b
0.1
(0.08)b
0.3
(0.0005)b
0.15
(0.0009)d
0.26
(o.0001)d
4.12
(o.0001)b
0.05
(0.35)
0.17
(0.07)c
0.07
(0.3)
0.19
(0.007)b
4.33
(o.0001)b
1.56
(o.0001)b
1.18
(o.0001)b
1.1
(o.0001)b
Socioeconomic
characteristics
Income per person
Mobility
+
+
Living density
Education
Perishability
Store attributese
Assortment freshnessf
Food preparation
Meals prepared at
home
0.7
(o.0001)b
0.19
(0.006)b
1.15
(o.0001)b
0.17
(0.001)b
Fresh ingredients in
cooking
2 log-likelihood
r2 (AIC adjusted)g
Hit rate (% correct
predictions)
7167
63.6
6578
0.08
68.1
6287
0.12
68.2
5111
0.29
77.2
4644
0.35
79.3
3985
0.44
82.5
3615
0.494
85
(pr4chi-square in parenthesis).
po0.01.
c
po0.10.
d
po0.05
e
Store attribute variable is an average of consumers perceptions of the difference in three store characteristics (quality of products, assortment variety, in store cleanliness), between modern formats
and traditional groceries.
f
Assortment freshness calculated as the average difference in consumers perceptions between modern formats and traditional perishable food formats.
g
Calculated relative to the base model: r2=1 [(LL (model) number of additional parameters)/LL (base model)].
b
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Constant
Model 1
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Table 2
Maximum likelihood estimates of logit models of format choice: (only non-perishable food lines)a
Independent variables
Expected
coefcient sign
Constant
Distance variable
Travel time difference
Socioeconomic characteristics
Income per person
Mobility
+
+
Living density
Education
Store attributese
2 log-likelihood
r2 (AIC adjusted)f
Hit rate (% correct
predictions)
Model 1
Model 2
Model 3
Model 4
Base model
Model 2+consumer
socioeconomic
characteristics
Model 3+store
attributes
0.14
(o.0001)b
0.85
(o.0001)b
0.09
(o.0001)b
0.02
(o.0001)b
0.09
(o.0001)b
1.35
(o.0001)b
0.07
(o.0001)b
0.05
(0.32)
0.41
(o.0001)b
0.09
(0.068)c
0.38
(0.0001)b
0.04
(0.43)
0.30
(0.0002)b
0.13
(0.013)d
0.3
(o.0001)b
4769
0.16
70.4
1.7
(o.0001)b
4269
0.25
74.1
5712
53.6
5025
0.12
70.2
(pr4chi-square in parenthesis).
po0.01.
c
po0.10.
d
po0.05.
e
Store attribute variable is an average of consumers perceptions of the difference in three store characteristics (quality of products, assortment
variety, in store cleanliness), between modern formats and traditional groceries.
f
Calculated relative to the base model: r2 1 [(LL (model) number of additional parameters)/LL (base model)].
b
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11. Conclusions
A number of earlier studies documented the tendency
of consumers belonging to ethniccultural minority
groups to display food shopping patterns that differ
from those of mainstream consumers (e.g. Lavin, 1996;
Herche and Balasubramanian, 1994; Kaufman and
Hernandez, 1991; Jamal and Chapman, 2000; Jamal,
2003). They shop frequently, or exclusively, in traditional food retail stores rather than in the mainstream
supermarkets. The researchers conducting these studies
were mostly interested in acculturation, cultural diversity, the role of marketers and implications for marketers and retailers (e.g. Ackerman and Tellis, 2001; Jamal,
2003, 2005; Lavin, 1996; Wallendorf and Reilly, 1983).
Our interest in this paper is different. We focus on the
structure of the food retail system serving these
consumers and on its modernization: the move from a
system characterized by small, traditional, retail formats
to one dominated by supermarkets.
We employ here the conceptual framework and
management approach used by Goldman et al. (2002)
in their study of retail modernization in Hong Kong.
While earlier modernization studies emphasized the role
of socioeconomic variables, Goldman et al. (2002) found
that these factors had no effect. They identied
consumers tendency to make their perishables food
purchases in traditional retail formats as the main
barrier to supermarkets market share advance. Our
study nds similar results. However, we advance their
work by explicitly studying the role of cultural factors
which to underlie these shopping patterns.
We nd that the impact of these factors manifests
itself through two shopping behavior patterns: the rst
is the purchase of perishable food items in small,
specialized stores and the second is the tendency of
Israeli Arab woman to conne some non-perishable
shopping trips to neighborhood grocery stores. Underlying the perishables shopping pattern is the daily
practice of preparing a cooked, traditional, family meal
at home. Preparation of these meals often involves the
use of fresh, traditionally dictated, ingredients. Since
consumers view traditional stores as superior to supermarkets in the quality and variety of their perishable
assortment and in the freshness of perishable items they
prefer buying these items there rather than in the
supermarkets. Cultural factors also impact supermarkets market share through the shopping trip. Cultural
norms dictate that women should not venture unaccompanied out of the safe radius around the home.
As a result unaccompanied women buy only in the
neighborhood stores, not in the more distant supermarkets. Supermarket trips often involve husbands
accompanied by their wives. These practices have led
Israeli Arab households to split their non-perishable
food purchases between supermarkets and neighbor-
12. Implications
12.1. Implications for supermarket managers
Both Jewish and Arab supermarket executives interested in increasing market share in the Arab sector
believe that the key to supermarkets market share
growth is further improvements in Arab consumers
socioeconomic status. The present study indicates that
this is not the case. Changes in Arab consumers
socioeconomic status will have no impact on supermarkets position. Locating supermarkets nearer to
consumers and further improvements in assortment,
cleanliness and product quality will have a positive
impact. However, it will mostly be conned to the nonperishable food categories.
The study highlights the role of perishables. Underlying the tendency to buy these products in traditional
outlets are culturally determined food preparation and
consumption patterns. Also, the study nds that an
additional important barrier to supermarkets market
share growth is the culturally determined tendency of
woman to buy non-perishables items in the small
neighborhood grocery stores.
These ndings pose a major strategic challenge for
supermarket executives. They need to develop new
supermarket formats that will cater better than the
present supermarket formats to the particular needs of
these consumers. The design of these formats should be
based on the identication of the relevant attributes of
the specialized traditional formats that make them so
attractive to Arab consumers. The new formats will
need to incorporate these attributes combining them
with those elements that make the supermarkets an
effective retail mechanism. Also, supermarket executives
should rethink their strategy of a focus on large-scale
supermarket formats. An opportunity exists in the Arab
sector for a small scale, neighborhood supermarket
format that will be able to effectively compete with the
traditional neighborhood grocery stores.
12.2. Implications for researchers
Researchers studying the shopping behavior of ethnic
minority consumers residing in developed economies
realized before that these consumers tend to purchase in
both traditional and modern food retail formats.
However, this behavior was not studied before in a
systematic fashion. In this study, we demonstrate the
usefulness of a procedure that can be effectively used to
analyze this type of cross-format shopping behavior.
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Acknowledgments
13. Future research and limitations
13.1. Future research
Researchers should continue to explore the impact of
cultural and ethnic factors on the structure of the food
retail system serving ethnic consumer groups. These
factors inuence retail structure through their effect on
shopping behavior which, in turn, is determined by
variables related to food preparation and consumption
habits, and to the nature of family relationships.
Consequently, researchers should make these variables
an integral part of their research agenda.
An important issue that needs to be studied is the
degree of persistence of these behaviors over time and
the forces working for and against their continued
existence.
The possible existence of subgroups among these
ethnic minorities should also be studied. For example, in
our particular case the Israeli Arab population consists
of Muslim, Christian and Druze Arabs. It is not clear if
the cultural factors we discuss impact all these groups in
the same manner and what are the differences.
The process of retail modernization takes place in a
large number of Arab countries and in countries where
large Arab populations exist. The question that needs to
be studied is whether the shopping patterns we identied in this study and the underlying cultural
factors inuencing them are shared across other Arab
populations.
13.2. Limitations
Many of the early studies of ethnic minority groups
collected observations and employed qualitative, ethnographic, descriptive approaches to interpret the data. In
contrast, the present study uses survey data and
quantitative methods to test a series of hypotheses. We
feel, however, that given the complexity of the phenomenon studied and the state of knowledge in this area, a
purely quantitative research approach is limited in its
effectiveness. Further studies should use a combination
of data collection and analysis approaches. Survey
methods should be supplemented with qualitative
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