December 21, 2018

Though a decade has passed, the recession of 2008-09 offers perennial lessons to retailers. No one is immune to shopping for groceries and basic household items but shoppers have choice. SMU Cox Marketing Professor Chaoqun Chen analyzes how consumers shop around various retail formats and how their behavior changed during the Great Recession. Her findings uncover truths about how consumers from different income levels adjusted to a new normal in their weekly treks.

Grocery stores have been the dominant retail format for food and related items for decades, Chen’s narrative begins. Households form their impressions about retail attributes of a retail format over a long period, and their impressions are unlikely to change quickly. Their impressions are slightly sticky. In general, retail formats are competing for expenditure shares, a distinguishing factor in her research — not for consumers.

From 2004 to 2007, discount stores such as Target and Walmart grew their market share substantially, the research notes. However, in 2008, the beginning of the Great Recession, discounters lost share to other competing formats like Costco warehouse clubs. Chen observes that in the midst of the Great Recession there was little adjustment to retailers’ pricing policies, despite the changes in market share.

Read more at SMU Cox.