The influence of consumer confidence on inter-format competition: An analysis based on the French Consumer Confidence Index

Abstract

The multiple store formats (Drive, hypermarkets, hard discount stores, convenience stores) tend to strengthen inter-format competition in addition to the intra-format competition. Thus, when he or she has to shop, the consumer is now facing several solutions. Research in marketing was much interested in determining the choice of store formats using variables such as the composition of the assortment, price, and sales promotions. More recently, analysts have raised the issue of whether the economic context could affect households’ preferences for store formats without providing a convincing answer. To contribute to this debate, which is now important at a time when many economies are in crisis, this research examines the influence of consumer confidence on households’ spending per trip. An analysis of panel data during the 2004–2013 period and four store formats shows that the changes (increase, decrease) in consumer confidence have asymmetric and nonlinear effects on households’ spending per trip across the different store formats and this also depends on the economic cycle (expansion, contraction).