When patronizing stores, consumers may exhibit loyalty not only to a
retail chain but also to a specific outlet. This distinction is
important in a dynamic retail environment: if a store changes ownership,
chain loyalty makes customers inclined to seek out another outlet of
the former chain, whereas outlet loyalty enhances their stay rate after
the takeover. This article distinguishes the two forms of loyalty
conceptually and discusses how both can be identified empirically in a
model of consumers' reactions to store acquisitions. The authors
estimate their model on unique scanner panel data covering ±200 local
markets and takeovers. The results confirm that after an acquisition,
consumers exhibit outlet loyalty, regardless of changes in chain and
marketing mix. Counterfactual simulations point to important managerial
implications. Acquiring outlets with a clientele in place leads to
higher store traffic levels than the new owner could otherwise reach.
Notably, these benefits cannot be reaped if the acquiring chain is a
hard discounter, in which case customers' previous store knowledge is
less relevant, and incentives to seek out new outlets are greater.
[ABSTRACT FROM AUTHOR]