Regional product assortment and merchandising in grocery stores: Strategies and target customer segments

Abstract : This research examines consumers’ in-store reactions to regional products. A field study has been conducted in two stores which adopt different types of visual and shelf merchandising strategies (i.e., regional products are located within their product categories with POS ads (n = 307) versus in a dedicated space with theatrical visual merchandising (n = 404)). This research shows that consumers’ perceptions of regional products assortment and merchandising (for the store where regional products are located within their product categories) have a direct impact on retailer's local image and their loyalty toward these products and an indirect impact, through these two variables, on their loyalty toward the store. This research thus points out the superior performance of the strategy of merchandising regional products within their product categories, using POS ads to identify them. This research also highlights the existence of the two groups of consumers (i.e., the “regionals” and the “moderates”) who are the most receptive to the regional products offered by grocery stores and on which retailers should concentrate their sales promotion efforts.