Price and Quality Value Influences on Retail Customer Satisfaction and Loyalty

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Discount retailing represents a substantial proportion of the U.S. retail sector; however, it is increasingly challenged by both online and other new retail entrant forms. This changing discount retail market makes it increasingly important to understand how customer value is created and how this in turn influences satisfaction and loyalty. Because of the unique nature of discount retailing the extant research on these topics may not apply to this retail sector. Based on this need, this paper reports research on how customer perceived price and quality value obtained in the discount retailing shopping experience influence store and service satisfaction and subsequent customer loyalty. The research is based on a sample of 308 Wal-Mart and Target customers. Partial least squares structural equation models were used to test the hypotheses and were also used to assess the role that gender and store brand play as moderators in the research framework. The research provides discount retail managers with important evidence on the specific dimensions of value and satisfaction that influence customer loyalty that runs contrary to the general literature not specific to discount retailing. Interestingly, price value was not found to be related to store or service satisfaction suggesting that discount retail customers may anticipate low prices and therefore they do not serve as a driver of satisfaction. Another finding that was contrary to the literature was that service satisfaction did not influence customer loyalty as an elevated level of customer service may not be a requirement for discount retail shoppers.


Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior

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Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior