The effect of price as a marketplace cue on retail patronage

Purpose – The purpose of the study is to examine the effect of consumer price attitudes, which operate as marketplace cues, on retail format choice across a variety of store types in the USA. Design/methodology/approach – A cross‐section of US consumers ( n =365) constitutes the sample for the study. The apparel category was selected as the study's context due to the variety of formats it offers to consumers. A telephone survey was used to investigate price perceptions and format choice across seven different retail formats. Respondents were grouped into high and low groups for each of the price cue factors. The groups were compared using analysis of variance (ANOVA) for each price construct at each level of the dependent variable for format choice. Findings – Findings suggest that price cues affect consumer format choice. Price consciousness and sale proneness tend to positively impact patronage of retail formats that implement low cost strategies, while prestige sensitivity and price/quality schema tend to positively impact patronage of retail formats that implement higher price strategies. Originality/value – As US retail markets continue to move toward saturation and consumers take advantage of price competition, understanding the role of price as a driver of retail choice is important for strategic planning. This is particularly important when communicating store pricing policy to the target consumer. The research extends previous price cue research, which focuses on products and brands, to the retail store level.