Are Loyal Store Brand Users Less Store Loyal?

Do store brands help differentiate a store to attract store loyal consumers? Or do they attract price sensitive cherry pickers who are not store loyal? To answer these questions empirically, the authors construct appropriate metrics of store brand loyalty and store loyalty, that do not impose mathematical relationships between the two variables—a problem with recent works in this area. Using data from multiple sources, multiple retailers, and controlling for potential spurious correlations due to differences in levels of grocery spending and householdstore spatial configurations, the authors demonstrate a strong and robust positive monotonic relationship between loyalty to store brands and store loyalty, providing support for the store differentiation rationale for store brands. Further, they demonstrate a link between store brand quality and store loyalty-premium store brand patrons are more loyal than regular store brand patrons—an incentive for retailers to invest in store brand quality. Finally, loyalty to store brands in high perceived risk, staple and non‐hedonic categories leads to greater store loyalty relative to low risk, non‐staple and hedonic categories.