Naveed Anwar

Reg# 2015-ag-2243

Thesis
Abstract

The retail landscape in Pakistan is experiencing a transformation from traditional to modern

retail formats. The presence of modern retailers is gradually increasing because they offer
customers a wide stock of products and services. Local shops are still surviving, although with
difficulty, and they continue to provide a choice of shopping venue. The present study elaborated
the consumers shopping behaviour: Malls versus Local shops” The purpose of this research was to
study the consumer purchase pattern and to investigate factors that determine consumers‟
shopping behaviour from both the modern and traditional retailers, so that appropriate measures
can be suggested for upgrading of Pakistan’s retail Industry. A structured questionnaire was used
to gather information regarding shopping preferences from randomly selected 200 respondents
from Faisalabad city of Pakistan. Descriptive statistics, factor analysis, and binary logit model
were used to analyze the data. Results showed that socio-economic variables such as age, family
income, gender, marital status had insignificant as well as education and transportation had
significant influences in the retail format choice. Moreover, results also indicated, family income,
age, education and transportation had positively affected the consumer behaviour for Shopping
Malls, while gender and marital status had negative relation to consumer choice the retail
format(FS), location convenience were found to lead consumer behaviour for Local shops. .
Almost one half of the consumers preferred Local shops (43%) while (57%) respondent
preferred Shopping malls. The study recommended that shopping should be made more
adventurous by continuously upgrading the product portfolio, by changing the layout and by
providing the touch and feel experience.

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Chapter 1
INTRODUCTION
This chapter introduces the research topic, and provides the background of the research, in the
first section it gives an overview about retailing followed by evolution of Shopping Malls in
developing countries and also in Pakistan, in the second section, problem statement was discussed,
research objectives were given in the third section. The fourth section will determine the
significance of research.
1.1 Background to the Research
Modern day retailing involves all activities and function involved in selling of goods and
services to the consumers both for personal and business usages (Kotler and Armstrong, 2010;
Levy and Weitz, 2004). Retailing plays an important role in economic growth and in economic
development (Kaynak and Issa Hudanah, 1987). Numerous demographic and economic factors
have contribution in the development of retail sectors (Swar, 2007), increased in per capita
income (Gulati and Reardon, 2007), economic liberalization, urbanization, improved infrastructure
(Aggarwal, 2008), young population (Mokhlis et al., 2003), changing consumers life style and
taste preferences are the major contributors in arising the retail industry (Kamau, 2008). These
changes have brought a radical shifting of the modern retailing and gives opportunity to new
business to emerge (Singh, 2007).

Retail has been categories into three groups, specialty goods, convenience goods and shopping
goods (Guy, 1980). Retail business has divided depending on its size, small scale retailing and
large scale retailing (Goldman and Hino, 2005). The small scale business also known as
unorganized and traditional retailing owned by a proprietor or it’s a family run business who sell
few product categories (Pataskar, 2014). These stores are near to the residential area where
people purchased products on the basis of their daily needs (Tiwari, 2009) As is common in
subcontinent, such retailers include local shops, chemists, general stores, apparel shops, footwear
shops, pan and body shops, pavement vendors, etc. (Riungu, 2011).

From small retail outlets to the large scale retailing there is an immense development happened
in retail industry. Nowadays, every retail firm is trying to satisfying the customer demands by

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providing a range of products and services to sustain the advantage in the industry (Leszczyc et
al., 2000). In modern day retailing, all activities are well-organized and performed usually by
licensed businesses who are registered as well for taxation purposes (Rathore, 2012). Here
maximum products of different brands come under one roof (Mathew et al., 2008). For the
performance of various activities such as product procurement, assortment, display and selling,
often trained staff is hired. These retailing make the shopping easier and friendly by providing
different promotional activities and after sale service.
Based on the number of products and services offered, these modern retailers operated in several
formats, among which hypermarket, supermarket, modern stores, superstores and chain stores
are prominent (Levy and Weitz, 2004,Misra, 2011).

Table 1.1 Characteristics of retail format

Shopping Shopping malls or Supermarkets are large with 20,000 plus

malls/Supermarkets square feet in area, having low, margin but high volume low
cost of products and have self services to deal with customer
needs for food and products.

Local shops Local shops open for long hours, seven days in a week those
are located near to the residential area serving the nearby
customers, having a limited number of products variety.

Source: Levy and Weitz, 2004, Pataskar, 2014.

1.1.1 Evolution of Shopping Malls

Barter system remained in operation for a long time. As long as world’s population was limited, the
desires were not diversified, and the goods were produced on small scale the economic activities
were carried under barter system. But with the passage of time the world’s population expanded, the
narrower and self sufficient life of village broke, education spread the era of invention and
innovations started, and above all people experienced diversification in their desires. In such
phenomenon Barter system failed to respond efficiently and was transformed into market system.
This system was replaced by modern market norms. People have no time to purchase different good
from different shops, So that their behavior change, and want to purchase all things from one place.

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Purchasing power of people increases due it people want sophisticated life style which increase
demand for luxuries of life. The shopping malls came into being in the beginning of the 20 th century
and they were built in the big cities of the world. In 1922, the Country Club Plaza, the first
shopping mall, was established by J.C Nichols Company, near Kansas City Missouri. The largest
mall ever is South China Mall in Dongguan, China, with a gross floor area of 892,000 m 2. The
world’s second-largest shopping mall is Golden Resources Mall in Beijing, China, with gross floor
area of 680,000 square meters. The SM City North EDSA in the Philippines, is the world’s third
largest at 460,000 m2 of gross floor area, millions of people visit towards in these shopping mall
daily (Kumar, 2015). Shopping in Pakistan has witness revolution with change in consumer
behavior and whole trend of shopping has also changed. Buying behavior of the consumer is
varying by change in income and time. These days, consumers have many shopping choices
available like, local shops, shopping mall, and online shopping or e-shopping (on a very limited
scale). Example of some big and famous shopping malls in Pakistan are Centaurus Mall, Safa Gold
Mall, Mall of Lahore, Dolmen Mall, Park towers, Ocean Mall, Fortress Square, Gulberg Galleria,
and Metro Mall S.B Departmental store. Some consumers prefer shopping from malls, some from
local shops and other from both. Social exclusion problem occurred when private malls were
established and people started to spend more time in shopping at the malls and gave less time in
local street shops (Erkip, 2003). Shopping malls contributes to economy more significantly than
local shops which showed as simple combination of supply and demand (Rajagopal, 2009).
Shopping malls catch the attention of both buyers and sellers. They also encourage buyers
providing sufficient time to make choices as well as an entertainment. There is a difference between
mall and local shops; these are fulfilling consumers shopping needs. A local shop is a retail business
establishment that satisfying the needs of consumers when it comes to their personal and residential
goods. Mall contains verity of merchandise at one place. In current years shopping malls are getting
more liked by rich and educated people in urban areas. In some manners shopping malls are alike to
traditional shops, but people generally prefer shopping malls for reasons like their contemporary
environment, product varieties and well-located. A mall is exactly constructed in a fix locality
which may contain many services such as safe car parking, quality of products, offers, multi storey,
and fun or restaurant etc. In local shops retailers try hard to keep their customers by offering quality
of products, prices difference and good will. Costumer find good quality product at malls other than
local shops. Quality of goods, sales promotion, expediency, and different brands of products

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influenced consumers toward shopping malls (Bansal and Singh, 2008). In a mall consumer spend
many hours without being bored, if he/she wants a particular product there is a lot of choices to buy.
If he/she gets tired from shopping they can either take rest in restaurant or make fun. Consumer’s
motivation to visit malls both entertainment and shopping too. Malls with multiplexes such as
cinema, cafe point, and play land for children are becoming the centre for family outings
(Srivastava, 2008). The customer also can take their car to the shopping mall there would be always
reliable car parking. All products are available under one roof, different kinds of offers and
advertisements are made for sale promotion. Trend of shopping also change in Pakistan, but mostly
people are purchasing from local street shops. I will identify what are the reasons behind of this
phenomenon. Consumer preference changing and they are moving from local shops to Shopping
malls.
The supermarkets or shopping malls emerged in three recognized waves, and proceeds within the
fourth emerging wave. The first wave countries dealt with in supermarket industry took off in the
early to mid of 1990s. The countries observed the diffusion in a single decade that came into some
five decades within the United States, and also in the United Kingdom. The second wave countries
were Southeast Asia, Mexico and also with Central America, and south central Europe. The
supermarket takeoff happening within the mid-to-late 1990s · In the third-wave countries, the
supermarket emerging trend began in late 1990s or even early in 2000s in eastern, Southern Africa,
South and Central America and also, “transition” East Asia (China and Vietnam), India as well
as Russia. The fourth wave currently appearing in poorer areas, like Bangladesh, Cambodia, and a
few parts of West Africa.
Globalization and progress in retail business has also impacted the structure of market in
developing countries (Reardon and Hopkins, 2006). The global retail sales in US$ trillion has been
given in table 1.2.

Table 1.2 Global retail sales (US$trillion)

Region 2011 2012 2013 2014 2015 2016 2017 2018

Asia and Australia 6.0 6.3 6.4 6.8 7.6 8.4 9.3 10.3
Latin America 1.3 1.4 1.4 1.4 1.5 1.6 1.6 1.7
Middle East and Africa 0.5 0.5 0.5 0.6 .6 0.7 0.7 0.8
North America 3.7 3.8 4.0 4.1 4.3 4.6 4.8 5.0
Transition Economies 1.1 1.1 1.1 1.2 1.2 1.3 1.5 1.6

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 Western Europe 3.2 3.0 3.1 .2 .1 3.2 3.3 3.3
World 15.8 16.2 16.6 17.3 18.4 19.7 21.2 22.8
Source: (Yu, 2015)

Note: Figures after 2014 are forecasted, others are actual or estimated

1.1.2 Retailing in Pakistan

Pakistan is growing economy, irrespective of immense challenges specifically poor law and
order, and energy crises, natural disasters and obstacles that seized back investment growth in the
country. The share of retail and wholesale sector in GDP accounts for 33 per cent in service
sector and about 18 per cent in overall GDP (PBIT, 2011). After agriculture and manufacturing,
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retail is the 3 largest sector in Pakistan that provide employment to the 16% of total labor force.
Pakistan’s retail potential is estimated $42 billion (PBIT, 2011). Pakistan’s retail sector mainly
dominated by unorganized independent stores known as “Local shops” consists of about 95% food
retail with expected annual sales of $3 billion (Carroll, 2011, and Raja, 2011). Most of the owner
and retailer of the neighbourhood stores lack the education about retailing in Pakistan. According to
the World Bank there are more than 2.4 million retail stores in the country from which 99% stores
are traditional managed by one or two people (FIAS, 2005). Modern retailers including
supermarkets and retail stores just consists of 1% stores (Broadbridge and Sengupta, 2008).
Pakistan’s retail industry faces the slow movement towards the modernization. According to
Planet Retail country’s grocery retail sales is about 8.4% generated by modern retail industry and it
would continue to grow only 9% by 2020 (Deloitte, 2013).
Although traditional retailers such as local shops and small grocery stores currently dominate the
Pakistan’s retail industry, a substantial decline in their share in overall retail sale is expected in the
coming years which would be taken over by modern retailers (Moazzam and Badar, 2006).
Table 1.3 Retail in Pakistan

Pakistan 2000 2005 2010 2015 2020

Grocery Retail Sales, Modern (%) 7.72 7.92 8.20 8.59 8.98
Grocery Retail Sales, Traditional (%) 92.28 92.08 91.80 91.41 91.02
Source: (Deloitte, 2013)

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The changing scenario of retail industry in Pakistan encouraged the retailers to upgrade their
practices. Several new stores have been opened. However, this is just limited to the large and
well developed cities of Pakistan such as Karachi having 23.7 million population, Lahore
consists of 9.4 million and Faisalabad has 7.3 million (Government of Punjab, 2015). These
stores are self-service with multiple checkout counters, having foods, household goods and
personal care products in form of packaged and branded items.

A few multinational chains have stepped in Pakistan, prominent among these are Metro and
Hyperstar. German based Metro inaugurated its first cash and carry store metro in Pakistan in
2007, than merged with Makro-Habib in 2012. Currently metro operating in nine different
locations in Punjab, whereas it is operating in more than 700 stores in twenty nine countries,
including America, Asia and Africa having more than 100,000 employees. French based Carrefour
Hyper star in Pakistan, shelving up to different products upto 30,000, is operating in Lahore,
Karachi and recently in Islamabad and also with more expansion plan in other cities (Aman and
Hopkinson, 2010). A shift from local shops to shopping malls organized retail sector is gradually
taking place in Pakistan.
It was recognized that there is need to understand the transformation in consumption, demand
drivers, habits and preferences that have increase the growth. The major concerned of this research
was to illustrate the consumption pattern and attributes that influence the consumer behaviour for
local shop and shopping malls retailing in Pakistan.
1.1.3 Consumer behaviour and Emerging Retail Format
Consumer behaviour plays an important role in the retail format choice. There was a traditional
view about shopping that people came with the set of fixed and exogenous alternatives.
However, changing consumer behaviour towards modern markets that give a serious threat to the
traditional stores (Farhangmehr et al., 2000).
Emerging retail formats have a wide range of variety to consumers by offering an ideal shopping
experience, entertainment and service, under one roof. Due to this transformation of retail
industry in the form of emergence of modern retailing such as one stop shopping, supermarkets,
specialty stores and department stores in Pakistan, has a gradual shift in consumer preferences
can be observed.

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Demographic factors such as age, occupation, income and education influence the consumer buying
behaviors. Young consumers earning, growing middle class and increase in spending, provides
opportunities for the expansion of modern retailing (Kiran and Jhamb, 2011). Shopping behavior
change with varying age. Young consumers seeking towards entertainment, while older consumers
preference the leisure and convenience (Myers and Lumbers, 2008). Various retail attributes
supported the behaviors of consumer to choose among the various retail format like assortment,
sales promotion, in store service and ambience (Dalwadi et al., 2010, Thang and Tan, 2003).
Modern retail stores have given the choice to the consumers of Pakistan to experience the retail
formats of developed countries. This also has created the competition in the retail sector to attract
the customers with their unique services.

1.2 Problem Statement

Pakistan has vast investment opportunities for business. Changing retail format landscape and
consumer’s life styles offer investment opportunities in the retail sector. Rapid urbanization, rising
consumer spending power is challenging the local retail industry in Pakistan to cope up with the
latest consumer needs. Although traditional shops dominate the retail industry. The entrance of
Malls retail stores such as Metro, Makro and Hyper star is a threat to the existing local brands
and local stores.
In order to gain success the retailer must be informed and aware to manipulate these market
activities in their favour. Although contribution of modern retailing to economic growth is widely
acknowledged, the role of local retailers in serving the needs of consumers in developing countries
cannot be overlooked. Since consumer behaviour is changing, there is a need, not only for
promoting modern retailers, but also upgrading local retailers so that consumer needs of all sections
of the society are adequately addressed. To this end, an in-depth understanding of consumer’s
behaviour in the retail format choice between l o c a l and modern retailers is essential. That’s
why current research is aimed to identify what are the factors that influence consumer’s to
purchase their needs from different retail format.

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 1.3 Objectives of the study
The specific research objective of the study was as follows
1. To identify Socio- Economic characteristics of people shopping from Malls and Local
shops.
2. To identify the shopping pattern of people shopping from Mall/ Local shops.
3. Reasons of buying from the particular places.
4. To suggest policy recmmendatations.

1.4 Significance of the Study

The present study depicts the broad spectrum of consumers behaviour towards the modern retail
and traditional retail format such as shopping malls and local shops in major city of Pakistan i.e.
Faisalabad. This research will help the local as well as international retailers in framing the
economic strategies; needed to attract the customers for retail industry and public sector.

1.5 Organization of Thesis

The thesis is organized into five chapters. Chapter one introduced the background of the research.
It highlights the traditional and modern retailing in Pakistan. The research problem, objectives of
study and significance of the study were also discussed.
In chapter two, review of literature has been discussed about the evolution of retailing, modern and
traditional trends and also the store attributes. It helps in identifying the gap in previous studies to
eliminate the duplication of work.

Chapter three discussed about the research methodology and identifying the appropriate
methodology is to fulfil the objectives. Description of the sample and measurement tool has also
been discussed in this chapter.

In chapter four, different statistical tools were applied to analyze the data. Descriptive statistic,
validity, reliability test and binary logistic regression applied to the collected data.

The final chapter elaborated the summary of the major findings and conclusion. The study also
recommended new area of research and also the limitation and direction for the future research.

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Chapter 2
REVIEW OF LITERATURE
In this chapter, the literature has reviewed in four sections. The first section, described overviews
of the retailing. In the second section, traditional and modern retail stores have been
described, followed by store attributes in the third section. In the last section summary of the
research and the research gaps have been identified.

2.1 Overview of Retailing

The modern retail market emerged in throughout South America and now has spread across
Asia, Middle East, and Eastern Europe. Modern retail formats such as supermarkets and
hypermarkets provided the consumers more convenience, a variety of products and different
packaging. However, traditional stores still dominated in these region (Chakravarty and Chua,
2012). Retailing has been undergoing an immense transition over the last few decades in developing
countries. Many studies had been conducted on the early transformation of the retailing. In the
literature a number of factors were stated as contributing to growth of modern retailers.
According to Reardon et al. (2005) and Roe and Diao (2004). Two major set of demand side
influenced the modern retailing in these countries. Firstly, urbanization with the increased women
work force enhanced the opportunity cost of women’s time by providing shopping convenience.
Secondly, raised in per capita income growth during, 1980s and 1990s in many countries demanded
the processed food with the emerging of the middle class. It encouraged the entry of supermarket
that offered variety of products at lower cost due to the economies of scale. According to them,
supply side factors which influenced modern retailing included liberalization of direct inflow of
investment, modern trends of logistics and procurement system and globalization of economies.

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2.1.1 Modern Retail over Regions and Countries
The modern day retailing taken place in three recognized waves and continues within a fourth
evolving wave (Dakora, 2012). The first-wave countries dealt with supermarket industry take off in
the early to mid of the 1990s. In this group much of East Asia and also South America (beyond
China and Japan, the north-central Europe, Baltic nations and South Africa. In these countries, the
average share was associated with supermarkets in retail store moved from approximately (10-
20%) in 1990s to (50-60%) normally through beginning 2000s. Examples included Brazil having
(75% share) (Farina et al., 2005), Argentina have (60%), in 2003, Tiwan had (55%) (Chang,
2005) and (55%) share had Czech Republic share (Dries et al., 2004).
The second wave countries were Central America, Mexico and much with Southeast Asia, and also
south- central Europe. Within these zones, the share moved from 5-10 per cent in 1990, then 30-50
per cent through the start of 2000s. Examples included Colombia (47% share) (Hernandez et al.,
2007), Mexico with (47%) share, and Indonesia covering (30%).

In the third wave countries, the evolution of supermarket emerged in the late 1990s or even start of
the 2000s, reaching about (5-20%) associated with retail these days. These areas consist of parts of
Southern Africa and eastern (David et al., 2006), some nations in Central and also South America
(Balsevich et al., 2006), “transition” East Asia, Russia, as well as India (Dries et al., 2004). The
fourth wave currently appearing in less developed countries such as, like Bangladesh, Cambodia,
and a few parts of West Africa (Codron et al., 2004).

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Table 2.1 Modern retail over regions and countries

Growth in supermarket
Waves Period Countries/ Region
share of retail sales

From about 10 percent

Much of South America, East
Started in the early around 1990 to about 50-
First Asia (outside China) and South
1990s 60 percent by the mid-
Africa
2000s.
From 5-10 percent in
S started in the mid to Mexico, Central America, and
Second 1990 to 30-50 percent by
late 1990s South Africa
the mid-2000s.

Reached about 2-20

Started in the late percent by mid-2000s;

Third 1990s and early China, India and Vietnam supermarket sales
2000s growing at 30-50 percent
per year.
Fourth Started in early to Bangladesh, Cambodia, and No estimates yet. Still
(Emerging) mid 2000s. West Africa. Sporadic

Source: (Reardon and Gulati, 2008a)

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2.1.2 Role of choice in retail setting
Rigopoulou et al. (2008) stated the decision regarding retailing is particular the most critical one.
Consumer had an abundant of choice and decision making in product choice, retail-chain choice,
retail store choice, brand choice, and retail service choice in routine retail purchasing. These
aspects drive in decision making. They stated that consumer behaviors towards the choice criteria
were influenced by social, psychological and personal factors.

For the last few decades consumer choice had been became the major research area. Pan and
Zinkhan (2006) analyzed through meta-analysis by segregating the store features into three
segments: the market relevant, personal attributes and product relevant which had been seen in
criteria of store choice. These attributes reflected store choice criteria.

Rigopoulou et al. (2008) pointed out regarding store choice criteria were, product, pricing and
advertising measure as situational variables, on the other hand consumer related features such as
past behavior and psychographic were dealt as individual’s constructs. These attributes reflected
the criteria for choosing the shops. However, researchers still tried to find out the exact influencing
attributes that helps in choice decision.
Bloch et al., (1994) studied consumer relationship with malls on the basis of consumption. The
basic purpose of this study was to find out the difference in malls habits which were related to
shopping orientation. Primary data were collected with the help of questionnaire. Data was
collected from 600 randomly selected respondents, involved in shopping in three different malls.
Five point likert-like scale was use to convert qualitative data into quantitative form. The malls
become a central part of modern lifestyle. The result of the study showed that small retailer was
also affected by mall orientation.

Wakefield and Baker (1998) examined the association among three factors (tenant variety, shopping
centers environment, and shopping participation) on buyer’s enthusiasm and aspiration to stay at
malls. The primary data were used by survey from mall customers. Data were collected from 517
respondents for analysis. The sample indicated 63% response from female and had middle
household income between $20,000 and $29,000. The Tucker-Lewis Index and Normed Fit Index
models provided relatively unbiased estimation in this study. As confirmatory factor analysis with

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exception used the Chi-square statistic. It showed the excitement had a significant positive effect on
desire stay at malls.

Dennis et al., (2002) explored the use of retail attractiveness quantify in defining the position in
status and surroundings boundaries for shopping centers of UK. Consumer choice of shopping
destination reflected by many qualities like, quality and quantity of product, price of products,
hygiene, car parking, and security of shopping centers. This study was based on questionnaire
survey of 287 respondents at six UK shopping centers. For data analysis SPSS was used to drive
linear regression equation. The result showed that most attractive shopping center lead to attract
most prosperous and famous retailer. Shopping center developers had the ability to attract their
customers towards increase in shopping. This would increase their sales as well as their profits.
Predication about the facilities would be made more confidently.

Dennis et al., (2010) examined the response of customers to digital advertisement. This type of
advertisement changed the consumer conception and their feelings of encouragement and
happiness. The self-survey method was used to collect primary data by questionnaire. The design
utilized five point likert-like scales. The questionnaire was grouped variable into conception,
happiness, and general demographics. In this paper for theoretical framework the Limited Capacity
Model (LCM) and Elaboration Likelihood Model (ELM) were used. Structural Equation Model
(SEM) on SPSS AMOS was used for analyzed data. The result of the study showed high level of
positive effect of digital advertisement on costumer decision making process. The consumer
perception had positive effect on the environment of the shopping mall.

Borgers and Vosters (2011) the purposed of this study was to extract consumers’ preferences
regarding shopping mall. When consumer find a product similar to his satisfaction then he transfer
local market to shopping malls. The factors that influence to customer regarding their choice and
evaluation, (e.g., quality of products, brands, service, and shopping environment). The data were
collected by online questionnaires from 300 respondents. It estimated by random choice model and
Chi-Square for data analyzed. All characteristics showed the significant impact on consumer’s
preferences regarding shopping malls.

El Hedhli et al., (2011) studied how shopping at mall effects consumers’ quality of life and how it
had contributes to a common sense of well-being. Also indicated the factors that influence shopping

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wellbeing such as, functionality, feasibility, safety, leisure, atmospherics, and self-identification.
Primary data were collected by consumer’s survey. A shopping mall contributed significantly to
consumer well-being by providing consumers with a variety of stores that carry much needed good
and services. The PLS statistical findings related to measure the model, all factor loading
significant. It predicated that shopping well-being positively influenced mall loyalty and positive
verbal evidence.

Khare (2011) identified the consumer behavior at shopping centre in small towns of India. The data
were collected by questionnaire, and random sampling technique was used. ANOVA test was used
for data analysis. Total sample included of 276 responders. The main objective of the study was to
recognize the shopping behavior at shopping centre. And which factors were related to different
consumer groups particularly in terms of sex and age. The finding of ANOVA on consumer mall
shopping behavior characteristic displayed that male and female differ in their sensitivity toward
malls on the issue of social relations. The result showed that consumer’s age and gender have a vital
significant role in determining towards malls.

Rabbanee et al., (2012) examined the relationship between mall and store loyalty. The paper
analyzed store loyalty influences shopping mall loyalty under certain conditions and it influenced
by the geographic distance between consumer and shopping centre. The data were collected by
survey questionnaire from 470 consumers. Five Point Likert-like scales were used to analysis data.
Assist, the review found that separation had a direct impact on the relationship between shopping
mall and store loyalty, yet not on the association between relationship responsibility and store
loyalty. This study further showed that distance in shopping mall and consumer had a sensible
effect on the relationship between perceived store value and store faithfulness.

Singh et al., (2012) determined the comparative analysis of consumer buying behavior and brand
perception toward shopping mall in Bhopal District of India. The main determines of the study is
consumer buying behavior in DB city Mall, what types of consumer? What is their opinion,
purpose, motivations, attitude, and brand perception? Both Primary and secondary data methods
used to collect data from 200 consumers. For primary data Consumer survey method was used to
collect data by questionnaire from market. Other hand magazines, newspapers, KPMG and reports
were used for secondary data. Non probability Convenience Sampling method was used. Different
age groups are taken to check consumer behavior below 20 year, 20-25, 25-35 and above 35 years.
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It concluded that majority 42% consumers are coming for fun and entertainment belongs to below
20 years age group, 36% consumers are coming for food items from age group of 20-25, and 8%
consumers are coming to mall grocery and household products from age group of 25-35 year. And
above 35% years consumers are coming for clothes in shopping malls.

Maraz et al., (2015) examined to assess the popularity and factors of compulsive buying in
shopping mall. The cross-sectional data and a revised version of the Edwards compulsive buying
scale were used to assess current consumer buying disorder. From 1441 visitors they observed
shopping habit and many physiological characteristics in shopping mall. At result they discovered
progressive support of customer purchasing issue in shopping center. Customer with strong marker
supporting mental authority of the develop. First the behavior includes irresponsible and regular
qualities with equivalent heartiness. Second the buyer purchasing issue was connected with
diversion of shopping movement as opposed to real purchasing behavior.

Know et al., (2015) investigated the gap in mall composing by exploring the relationship between
store reliability and strip mall endurance. The data were collected by online survey. Chi-Square
method was used for data analysis. The paper similarly breaks down the effects of seen store regard
and store relationship requirement on store stability while in transit to constancy towards the strip
mall encouraging the stores. The appraisal exhibits that store dependability influences mall
inflexibility under particular conditions and that such an influence is coordinated by the geographic
indifference between the shopper and the mall.

Erkip and Ozuduru (2015) evaluated the impact of utilization of urban land for shopping malls to
traditional market in Turkey. They analyzed two decades, when more outward-looking and more
moderate economic policies appeared in Turkey. The first period retail development in Turkey
occurred in the era 1990-2000, during this period shopping malls emerged as an existence of large
cities. In second period (2000-2010) they developed the quality and quantity and consumers create
huge demand for shopping malls. The problem of social separation appeared when private space
used for shopping malls, and people were spend more time in shopping malls and less in traditional
markets. They predicted that shopping mall would be evolved more restricted in their choices of
location and householder, where of them become more willing to invite domestic brand, and
increasing competition, economic instability and changing demand structure.

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Anselmsson (2016) analyzed the relationship between shopping centers improvement, growth in
sales and visitors rates. The data on improvement of center was based on questionnaire survey
(primary data), while visitor rates and sale growth of malls was based on secondary data from 96
shopping centers of Sweden in 2008 to 2014. The main objective of the study was to find
improvement of shopping centre and consumer visit rates towards shopping mall. The result
showed that it had significant positive relationship between shopping malls improvement and
promotions of sales and consumer visit rates.

El-Adly and Eid (2016) examined the relationship between customer satisfactions and mall
environment. The main objective of the study was to investigate customer value and customer
reliability regarding to malls in United Arab Emirates. The primary data were collected by
questionnaires survey from three main cities of UAE. The study was investigated by structural
equation modeling and Chi- Square used to analysis data. It showed that the shoppers’ mall value
(MALLVAL) had positive and significant impact on both customer reliability and customer
satisfactions.

Elangovan and Sangeetha (2016) focused which factor influencing the consumer preferences
towards malls in Coimbatore. Primary data were obtained by using questionnaire from 100
respondents and random sample technique. The SPSS 17 used to analysis the data. This research
examined the impact of increasing tendency of shopping mall and shopping behavior in urban
areas. The factors that influence to customer toward shopping malls like(comfort, fashion, food,
entertainment, brand, fun, quality, and luxury) in Coimbatore, India. Out of 100 respondents 31%
customers go to malls because of offers, 23% attract by aid, 21% are visiting because of all
products are available in one shopping mall. It concludes that the customers are satisfied in
Coimbatore whit quality, environment of shopping mall, stores, sales promotions, and economic
gains attract increasing customer in malls.

Kesari and Atulkar (2016) examined the relationship between consumer satisfaction and shopping
value. The primary data were used by questionnaire interview survey from two shopping mall of
central India. The data were analyzed with the help of structural equation modeling (SEM). To
analyzed multicollinearity effects on the result, variance inflation factor and tolerance values had
been examined. IBM SPSS 20 software was used for multicollinearity effect. The result showed
relationship between consumer satisfactions and consumer value had significant positive influence
17
on customer satisfaction.

2.1.3 Store Choice

Sinha and Banerjee (2004) elaborated that store choice was a mental process, that the shoppers
visited to one store rather than other. According to them store was chosen on the basis of trust that
the shopper had on a particular store, that they received in the form of quality of product and
service.
Babin et al. (1994) found that consumer said to be trade-off the value while choosing the
alternatives, when they go for shopping. The value of shopping was a multi-dimensional construct
that described as hedonic value. Hedonic values were correlated with the expectations of the
customer’s need that related to perceived shopping enjoyment. Some researcher suggested that
hedonic value were experienced with atmospheric constructs together with store design, interior and
exterior layout, decoration, personnel variables and point of purchase. The expectations also
determined the store choice. Researchers found that disappointment to meet expectations leads
towards the inverse impact on repeat purchase intensions whereas; positive impression effect may
enhance the expectations.
Gupta (2004) and Lather and Kaur (2006) uncovered the main six elements, sales, quality of
product, price, assortment of merchandize, convenience service and advertising service that
helped the retailer to choose the retail format in order to meet the demand of the customers.
According to the researchers ambience, layout, value added services, technology based operations,
display, self-service and many modern layouts would help the customer to determine their retail
format.

Gorton et al. (2011) stated that the store characteristics were the most important factors for the
consumer who decided whether to choose for traditional store or the modern store. Dawson
(2013) retail innovation such as supermarkets influenced the expectations of the consumers
regarding the store characteristics that impacted on to choose the retail format.

18
2.2 Traditional and Modern Stores
Raja (2011) described that traditional stores were managed and caretaker was done by owner. These
stores include a small neighborhood stores, mom and pop shops, street hawkers etc. They had no
planned infrastructure, accounting, and technical management system. The supply chain of
material and the sourcing were also done by individual in order to cope up with local needs.
According to Mukherjee and Patel (2005) traditional stores mainly comprised of two types of
stores, small business retail stores and wet markets. These two stores channel existed as a leading
player in the marketplace and played an important role for local consumer. Wet market generally an
open aired market that located near to the residential area for selling goods on daily bases usage.
Jaliawala (2014) stated that traditional stores provided the one to one service benefit and they were
easily accessible in nearby locations. These stores were in great value for those who did regular and
small amount of purchase on daily basis and want purchases on credit terms and also social
interaction. Small family owned stores usually had an average area of sale about 15 to 18 meters
square. The owner usually had a familiar customers belongs to nearby residential area.

Raja (2011) Modern retail stores were professionally managed, although it’s a family run
business. These included large stores such as hypermarkets and supermarkets with one roof
shopping experience. Modern stores had the features of accounting transparency in management
information system and had their accounting standards. They also had efficient supply chain system
and sourcing mechanisms.
McDonald et al. (2000) stated, the fast emerging modern retail stores were developed
enormously in term of the number of stores and their impact in total retail sales. Concerning the
foreign retailers, Metro and hyper star. These chains had advantages over the traditional retailing in
term of price, product assortment and variety they offered. But these stores, discovered at a quite
distance from the crowded area. Here the consumer cannot shop on a daily basis due to at far
distance.
Hernandez (2003) argued that modern retail systems were negatively impacting traditional retailers
in term of their declining sales, profits and market share. They stated that the entrance of the
supermarket and the modernized retail stores was gradually eliminating the traditional stores by
reducing their share in the market, sales and profitability. According to them, traditional retailers
were trying hard to survive and face the competition of emerging market and satisfy the customer.

19
 2.2.1 Consumer behavior and retail format choice

Many studies have been conducted on the issues of consumer preferences towards retail format
choice. By researcher using multinomial and logit models examined the retail format choice on
basis of sore attributes and consumer characteristics. However, Neven et al. (2006) analyzed the
consumer preferences for retail format on the basis of consumer’s socio-economic factors without
considering store attributes. Few researches had laid emphasis on both demographic and store
attributes.
Maruyama and Trung (2007) in Vietnam about wet market or modern market using probit
model, having a sample of 413 respondents from Hanoi. The research found that the element of
freshness for fresh food, people were more likely to pay attention to purchase from unorganized
retailing, on the other hand more income and safety of fresh food more likely to purchase from
the Shopping malls.

Thang and Tan (2003) stated that choice of modern retailing over traditional retailing was
influenced by different elements such as sales, assortment, promotion schemes, ambiences and in
store services. The concept of under one roof shopping facilitated the consumer in term of time
saving and to meet the satisfaction level.
2.2.2 Modern Retailers’ Penetration and Traditional Retailers
There was an immense impact on traditional retailer due to penetration of modern retailing, and this
debate had been continued for two decades. Goldman et al. (1999) that the format of food market in
East Asia was still captured by traditional retailers and they dealt with different segment and
income group with multiple product categories.
Goldman and Hino (2005) explained that traditional retailers overlapped the modern retail
market because there were continuous hurdles in expansion of modern retail, these hurdles
included government policies strict laws and regulation for operation in a specific market that
inhibited the expansion of organized retailing and support to the traditional retailers. These
results were supported by researchers when they studied the retail trend in South Korea, Tiwan and
in Hong Kong. According to him the existence of supermarket there, had been revealed for a long
time, but share of these modern retail format were still less than 50% of total retail sector.
They concluded in their study that traditional markets in Asia still gained the competitive advantage
20
there, due to modest government regulation for them.
2.2.3 Demographics
Demographic impact on retail format had not been studied extensively. Shopping behavior and level
of involvement in shopping differs with the place of shopping and act of shopping (Berman and
Evans, 2005)
Goyal and Aggarwal (2009) stated that there were emerging and increasing dual family income
group with high disposable income that encouraged the success of the modern retailing.
Shoppers had the alternative to choose among the shopkeeper or to the hypermarket, super store, or
departmental store to gain the quality products to satisfy their needs.
According to the Hughes (2004), the people were well informed and due to dual income, there
increase in demand of convenient, more nutritive and quality food. This demand profile showed
new taste food, consciousness regarding quality of food and shifting of demographic style. They
also determined that increase in disposable income and also due to the dual income people
were more demanding and conscious about the convenience.
According to the Gonzalez-Benito et al. (2007), supermarket were more visited by the people who
were advanced in their family life, had professional life styles and well qualified, whereas discount
stores were more preferred by those who were less qualified and whose professional activities were
according to their qualification. The modern retailing was adopted by young household with small
family and well educated and good professional activities.

Rodriguez et al. (2002) studied the consumer preferences in Argentina, according to them the
consumer of red meat, fresh vegetables, fruits and bread less visited the supermarket rather they
moved towards the traditional store, however the upcoming class with well qualification,
income, durable assets and having credit cards more likely to go to the supermarkets.
Ghosh et al. (2010) analyzed the customer expectancy towards the modern retail attributes.
According to them younger and enthusiastic customer visited modern retail as compared to the
older ones however, they determined that the shoppers who spent at least two hours considered that
the shopping was fun for them and also the part of the stress releasing factor. The main products and
merchandise that the shopper purchased from the retail stores were garments, household appliances
and other grocery products.
Ali et al. (2010) analyzed the consumer purchased pattern in accordance to the food and grocery

21
items. The purpose of the study was to develop the market strategies for the modern food and
grocery market under consideration the preferences of the consumers. The result revealed that
increase income and better education level influenced the consumers to take decision on different
market and product attributes while gender and age did not show any significant impact. The
preferences of consumers show that they demanded quality, price, variety, different packaging
sizes, convenience, services, entertainment and fun for the children.
2.3 Store Attributes
Attributes are those elements that a consumer considered important while purchasing of product and
services (Koo, 2003).
Adopting selective retail format is common by consumers in many countries. Previous studies
showed that retail format choice is characterized by different store attributes that affected the
consumer selection of store format, including assortment, environment, service, convenience
(Tessier et al., 2010).
2.3.1 Store Atmosphere
Store atmosphere enhanced the shopping experience of consumers and in shopping value and
encouraged the intension of consumers.
Hussain and Ali (2015) concluded that store atmosphere phenomena like layout, music
lightening, was an important and attractive element of the store image, these factors were
attracted by the youth of Pakistan to shop at supermarkets. They stated that cleanliness was an
important factor in store atmosphere, most of the food shoppers had keenly concerned for store
cleanliness, quality and food safety while purchasing products from the retail store.
Dennis et al. (2007) explained store atmosphere in term of sanitation and cleanliness. Because these
impact positively on consumer purchase pattern. Zameer and Mukherjee (2011) pointed out that
modern retails had advantage over the traditional stores due to proper lightening, ease of mobility
for consumer. Favorable in store atmosphere assumed positive impact on choosing a retail format.
The researchers said that good store atmosphere increased the shopping experience and adding the
shopping value. Food shoppers had concern regarding cleanliness, quality and food safety, for
those shopper’s cleanliness and store atmosphere matters a lot.

22
2.3.2 Location
Cherukuri and Ankisetti (2011) pointed out that location was very important variable while
selecting the retail format choice. They defined the location convenience as, distance, accessibility
and closeness of the store, they reported that closeness played a significant role in choosing retail
format because it measured the effort both in psychological and physical to reach the destiny. But it
had been seen the distance covered could be varied according to the nature of the product, because
consumer willing to travel for the purchased of the complex product far a distance.
Zameer and Mukherjee (2011) suggested that location convenience referred as a difference of
residence place and the retail store that enormously effects on format choice they said that
unorganized stores were located about half kilometer near the residential area but modern stores
located far a distance mostly located in metropolitan areas. Consumers preferred to the
traditional stores due to its close proximity to the residential area.
Many scholars differentiated the different store attributes. According to the researcher explained
nine key store attributes: services, convenience, physical facilities, clientele, store ambiance,
institutional factor satisfaction, merchandise, value and promotion. However, (Koo,2003)
presented the seven attributes: location, convenience facilities, after sale services, store atmosphere,
merchandising, value and employee services. On the basis of Koo and Lindqvist work, they reported
the four components: merchandise, employee service, facilities and after sale service. The studied
Jackson et al. (2011) explained that customer’s criteria of choice for stores can be accessed in
terms of convenience and accessibility, whereas in store choice measured through quality, value
and price. The researcher gave a conceptual picture on various dimensions of the store attributes.
Some of the attribute were explained in the following section in detail.
Sinha et al., (2002) examined using factor analysis and multinominal logit regression technique for
data analysis that consumer preferred different factors when they were going to select store for
purchase in India. this study was important for storekeepers in India so they might be able to fulfill
the preference of customer to attract customer towards their store. They were various factors which
affected consumer decision process which could be classified as primary and image based, and these
factors were affected by the product customer wanted to purchase. They also found some other
factors important when consumers were going to purchase. They also found some other factors
important when consumers were going to purchase such as their age, gender, distance of the store
and type of the store from where they had to purchase because in India store were recognized by the
23
type of product in which they were dealing, these factors were also important when consumer had to
select stores for purchase.

Koo (2003) conducted research in Korea and collected data from 517 respondents. He found that
store characteristics had an impact on consumer behavior and consumer felt delighted and satisfied
from the good store characteristics. They took different factors of stores which were affecting the
behavior of the consumer such as environment was also good factors which influenced consumer
behavior. These all factors were store attitude or characteristics of the store and according to the
research it was found that store characteristics had a very strong impact on loyalty and it also
influenced customer satisfaction with the store. Location of the store, retailing and dealing skill and
after sale services affects the store loyalty positively. He found that customer satisfaction in their
case was not the point which made consumer to retain with the store, if the customer felt delighted or
satisfied it was not necessary that they would revisit the store.

Zielke and Dobbelstein (2007) collected data from 990 respondents to examine factors which were
influencing customer willingness to purchase. They worked on the relationship between customer
purchasing behavior, customer willingness to purchase and store brand perception. Their research
proved that customer willingness to buy from new store depended on product category they were
going to purchase. Those products which were having high social risk in it customer were less
willing to buy from any new stores. When the product was having high social risk in it customer
were showing less price sensitive behavior and customer willingness to purchase a product was
influenced when they were purchasing from a specific store. When they were purchasing from any
specific store or specific brands their attitudes was affected by product group. They concluded that
price was not the only factor which influences the purchase behavior of customer there were many
other factors which had an effect on purchasing behavior.

Chavosh et al., (2011) examined the relationship between different customer characteristics and
impulse buying behavior. They studied customer characteristics such as age, shopping tendency,
mood of customer while shopping, gender and shopping enjoyment. A significant relationship was
found between the impulse buying behavior of the customer and product characteristics.
Insignificant relationship was found between materialism and impulse buying behavior of customer
an analysis was made in Singapore were selected for data collection, chi-square testing technique

24
was employed to make data analysis. The simple random sampling technique was used to collect
data.

2.4 Product availability

Product availability can be defined as the probability of having product in stock when the customer
demands (Chopra and Meindl, 2007) when the customer demand did not fill out, they showed the
behavior of switching the store, or dropping the purchase from that particular store Kucuk, 2004)
According to researchers, if the product not available, then customer switch the store, substitute the
same brand, delay brand and did not purchase.

Kucuk 2004. Conducted the research on the situation when the stock is out of the order in retail
stores, the store attractiveness as well as in store merchandising had greater impact on brand and
store’s loyalty. For this purpose product is an essential factor in maintaining the overall image of the
store.

Ali et al. 2010) the preferences of consumer were on the basis of number of factors such as
cleanliness, quality, price, atmosphere, packaging and availability of products. Mishra 2008) found,
mall space, foreign direct investment, changing lifestyle, rising young population, availability of
brands and rising retail finance were the major reasons for the dominance of modern retail model.

2.4.1 Pricing
Pricing is an important factor both for customer and retailer. Bell and Lattin (1998) explained
that setting accurate pricing strategy is one of the most important priorities in retail management,
and managers of supermarket actively participate in formulating pricing strategy in order to
attract their customers. However, they reported two types in formulating pricing strategy, one is
everyday low pricing strategy against a variety of products and the other one is a temporary
discount on some product categories that was most commonly used in supermarkets. Consumer
would prefer everyday low pricing when they have to purchase in bulk, but for small purchasing
they would prefer temporary discounts. This result was also supported by Singh et al. (2004)
who described that consumers with large basket choose everyday low pricing.
Pricing is a salient feature for consumers in purchase decision. The researcher had investigated
about the perception of consumers regarding different pricing strategies. According to them,

25
people perception played a vital role in spending money, if consumer’s perceived the money in a
positive aspect such as status, premium price; a symbol of prestige or excellence quality. But people
who took price perception in negative manner they would more likely to pay attention to sales
promotion and low prices, whatever the quality they purchased against the price (Moore and
Carpenter, 2008).
Bhatnagar and Ratchford (2004) explained that prices had a strong relationship in store format
selection. Shopper who were more sensitive towards pricing they selected the supermarket and
discount stores for shopping.

2.5 Product quality

Gupta 2004. Viewed hat consumer preferred new retail format due to its important attributes such as
quality of products, merchandising assortment, pricing and convenience service played an important
role in choosing the particular retail format. They indicated number of retail image attributes that
were essential in retail store selection. Some of the retail image attributes that were essential in retail
store selection. Some of the retail image attributes were more important as compared to the other
attributes, included product assortment, quality of the product, prices, place of the store and prices.

Bell (1999) found positive associations between range of product, quality, stores and consumers
intent to choose a specific retail center. Perceived product quality, assortment range, customer
service, convenient location, price, were the most important and attractive dimensions of the retail
format. He concluded other than price, product quality and its assortment were the most important
retail element in choosing a specific format.

Sinha and Banerjee (2004). Explained that shoppers not only demanded the good service but also the
quality and variety of the product from their perspective retailer. While studying the Chinese
consumer behavior to observed that shopper were conscious about product assortment, quality,
variety and low price to shop. He concluded that the most important factors to help in the decision
were food safety, enough stocking, reliable label of green products, rich variety and perceived value
for money. Shoppers also strongly emphasis on product quality.

26
2.5.1 Product Variety
Relating to previous literature review, product variety in the food retail is an important factor for
both retail forms. Almost all customers perceived that modern retail outlets have growing influenced
compared to traditional store formats. Numerous brands were available under one roof.
Huddleston et al. (2004) and Dennis et al. (2007) analyzed, variety of product had an impact on
store loyalty and selection of the particular format. According to these studies customers directed
towards those stores who had a vast variety of products. Zameer and Mukherjee (2011)
examined variety of products in contrast to traditional and modern retail format choice. They
discovered, due to the range of the variety of products in modern stores, customer desired to shop
from there. This aspect of retailing prominent in the selection of modern retail format, contrast to
the traditional store in order to reduce the effort of the consumer to search the variety from different
stores..
Hoch et al. (1999) revealed that shopper‟s foremost concern was variety of products that fulfilled
their purchasing needs and demands. Variety of products helped in shopping choice. In different
situation consumers switch their preferences when they got new stimuli. So, different alternatives
satisfying their needs.
Gaps in the literature

Literature review reveals retailing had remained a favorable topic for the researchers who covered its
various aspects such as segments of retailing, grocery, food, apparel sector, emerging retail formats
that influenced the retail attributes on the consumer behaviors. But in Pakistan context, there is
scarcity of literature on this aspect. There is a need to research in this area, as modern retailing in
Pakistan is relatively a new phenomenon. At the individual level, there were many attributes of
retailing that influenced the consumer preferences for two types of retail formats, i.e. shopping mall
and local shops.

27
Chapter 3
Research Methodology
This chapter introduces overall research design of the study, which includes the methodology
adopted for carrying out the research study and various phases of this research. This chapter
presents the overall research design, data sampling and data collection methods used in the
current study. Furthermore, the statistical methods, descriptive statistics used to find the percentages
of consumers’ purchasing pattern from Local shops and Shopping Malls and demographics, factor
analysis used to measure the attributes that influencing consumer behavior and binary logit
regression analysis, to study the relationship between the variables.

3.1 Study Area

The present research was conducted in the major city of Pakistan. The total population of Pakistan
is 179 million people, with sixth populous country in the whole world. The population of Pakistan
about 64% located in rural areas while other 36% consists of urban population. Faisalabad is
the major urban city of Pakistan with population. Faisalabad has 7.3 million (Government of
Punjab, 2015). The reason of selecting these cities because this was major cities of Punjab as
Faisalabad is the Manchester and also the industrial hub; there have been seen tremendous shifting
of consumer purchase patterns due to urbanization, awareness, entry of women work force and
change of demographic and social status of people.

3.2 Research Method

In economics researches, both quantitative and qualitative methods were most popular methods.
Quantitative method is used to explain, predict phenomenon with measurable variables (Leedy and
Ormrod, 2001). It also involves data collection that is typically numeric and the researcher tends to
use mathematical models to analyze data. Creswell (2013) stated, quantitative research “employ
strategies of inquiry such as experimental and surveys, and collect data on predetermined
instruments that yield statistical data”.

On the other hand, qualitative research emphasizes on words instead of large quantification and
focuses on the individuals‟ interpretations of their social world. This approach also requires high
involvement of participants´ observations from actual experiences (Creswell, 2013).
28
The study adopted quantitative research, the aimed of the study was to identify various elements
and measure level of consumer behavior.
3.3 Data Sources
In order to accomplish the research objective primary data were mainly used. Primary data
referred to the new, specified and original data, which was collected by a researcher for a
particular research problem or investigation. The study was based on the primary data collected
from consumers and households.
3.4 Sample selection
In present study, the sample comprised of 200 respondents, from Faisalabad city area. The
respondents in the study sample were selected through random sampling. One of the main
advantages of random sampling method is that, it greatly helps the researchers to gather the
required data from a sizable number of respondents in a relatively short span of time (Hair et
al.,2006).

3.5 Data Collection Method

The researchers used questionnaire as a tool for data collection because this method assists to
increase response rate (Saunders et al., 2009). Since potential respondents were scattered over a
geographic area, the use of questionnaire and web survey was likely become most suitable and
economical choice of collecting data as they were time-saving, quicker collection and fewer efforts,
(Saunders et al., 2009). It consisted of structured questions (close ended) and limited unstructured
questions (open ended). The apparent advantage of closed ended questions was that the response
rate is increased, time-saving for respondents and decreasing waiting cost for the surveyor.
Obviously, respondents usually feel reluctant to take part in the interview if they were required to
answer many open questions due to time limitation and inconvenience.

In the first section contained questions regarding the demographic background. For the sake of
confidentiality, respondents were not asked to reveal their personal information except for age
and gender under personal information heading. The second section of the questionnaire, there
were general questions regarding the consumer purchase pattern from Shopping Malls and local
retail format. In the third section, the core question emphasized, which constitute consumers
satisfaction related to Shopping malls retail format context. At last overall factors mentions that
influence to consumers these questions, respondents were asked to rate the importance of these
29
elements in accordance with their satisfaction level by application of Likert scale. The scale is
from 1 to 5 (5 = E x t e r m e l y I m p o r t a n t , to 1= Not at all important). Likert scales provide
information for each number in the scale so consumers know exactly what they are selecting
(Schiffman et al., 2008).
Efforts were made that respondents clearly understand the questionnaire. In order to eliminate
the response error the instrument was first pre tested. Pre-testing techniques aim to identify non-
sampling errors and to suggest ways to improve or minimize the occurrence of these errors.
Therefore, pre testing was done with 20 respondents. After pre-testing, the final version of the
questionnaire was developed and data were first collected in Faisalabad city from different areas,
such as Gulfashan Colony, Sheikh Colony, Shadab Colony and Saifabad. On average, one interview
with the respondent took 20 to 25 minutes. The questions were asked both in Urdu and Punjabi
languages considering the ease of respondents for getting the required information as
comprehensive as possible.
3.6 Data Preparation Procedures
The data preparation process included accuracy and checking prior to data analysis. First, to ensure
the accuracy of conversion from raw data form to reduced and classified forms more appropriate to
statistical analysis, editing, coding, and data entry were performed (Cooper and Schindler, 2006).
This was followed by cleaning, screening data, examining and exploring the nature of
relationships among the variables to verify and check for any violations of assumptions.

3.6.1 Editing
The raw data was edited to ensure accuracy and consistency with the intent of the question,
uniformity of entry, and simplification of the coding and tabulation (Cooper and Schindler,
2006). Returned questionnaire data was checked for legibility, consistency and completeness.

3.6.2 Coding and data entry

Structured questions were pre-coded. This was particularly useful in self-administered surveys
because it made the intermediate step of completing a data entry coding sheet unnecessary. After
receiving the returned questionnaires, all unstructured questions were post-coded and the data was
keyed into the statistical package SPSS version 20.0. The data entry step was done to convert
information into computer files (Cooper and Schindler,2006).

30
3.7 Data Analysis
Data analysis was used to assist in answering the research objectives and accomplished the aims of
the study. Preliminary analyses of data were tested using descriptive statistics frequencies, cross
tabulations and regression (Fritsche et al., 2008). Additionally, the factor influencing consumer
behavior was tested through the factor analysis and the logistic regression
3.7.1 Descriptive statistics
Descriptive statistical analysis is used to identify statistical facts and patterns in data. This was
applied collected data from the consumer’s survey and aimed to explore the basic facts and
patterns related to sample characteristics and consumer preferences. The data were analyzed using
statistics tools such as frequency distribution, percentages, and cross-tabulation and descriptive
statistical techniques that included mean and standard deviation. The descriptive analysis was done
with the likert statement to analyze by comparing and ranking the values of mean and standard
deviation.

Mean Attribute Score

Mean Attribute Score are calculated by following formula:

MAS= ∑xi / N
MAS = Mean Attribute Score

N = Number of Respondents

∑xi = Sum of score given by all respondents to specific attributes

31
3.3.1.2 Percentages

A percentage is a number of ratios expressed as a fraction of 100. Percentage was calculated by

using the following formula:
P = F / N * 100
F = Frequency of Class
N=Number of Respondents
3.3.1.3 Standard Deviation

The standard deviation is a measure that is used to quantify the amount of variation or dispersion
of a set of data values. The low standard deviation indicates that the data points are close to the
mean while high standard deviation shows that the data points spread out over a wide range of
values.

s= 1 n
n - 1�( xi - x ) 2
i =1

Where:

S = Standard Deviation

N = Total Number of Observations

Xi = Each of the values of data

X = Mean of the Xi

3.8 Reliability

Reliability refers to the transparency and consistency of the research process and its output
(Saunders et al., 2009). Only reliable results are meaningful and capable of being generalized to
refer to related populations (Bryman and Bell, 2007). In this study, attention was paid to the

32
reliability issue. Reliability of questionnaires can be verified from Cronbach alpha, presented for
various statements in the questionnaires, which suggests higher degree of inter correlation among
the test items. Generally, as a rule of thumb, Cronbach alpha ≥ 0.70 is considered as an
acceptable reliability coefficient and others above 0.8. The classification system in table 3.1 has
been previously offered for classifying the quality of
Cronbach’s alpha values:
Table 3.1 Rules for Cronbach’s

Alpha Value Interpretation

Alpha Value Rule of thumb

<.5 Unacceptable

>.5 Poor

>.6 Questionable

>.7 Acceptable

>.8 Good

>.9 Excellent

Source: (George, 2003)

Before factor analysis, a reliability analysis was performed to calculate Cronbach’s alpha value
of the 33 variables of consumer preferences the attributes that were used in the survey
questionnaire. The alpha value of the 33 attributes was 0.926, suggesting that the scale used was
internally reliable (Hair et al., 2006).

3.9 Validity Test

The validity test is carried out to ensure that the instrument is tapping the right concept (Cavana
et al., 2001). In other words, it is to confirm that the questions in the questionnaire are measuring
the intended concept and not something else. However, in this study, factor analysis is used to
avoid any inter-correlations among the variables as the items in each of the variable are adopted

33
from numerous sources. A principal components factor analysis was performed on the total set of
17 items.

34
3.9.1 Factor Analysis

Factor analysis is a statistical technique used to is to reduce “the dimensionality of the original
space and to give an interpretation of the new space, spanned by a reduced number of
new dimensions which are supposed to underlie the old ones, or to explain the variance in the
observed variables in terms of underlying latent factors. Thus, factor analysis offers not only
the possibility of gaining a clear view of the data, but also the possibility of using the output in
subsequent analyses. It also provides the structure of the inter relationships among large
numbers of variables into one common variable or factor (Field, 2013).

3.9.2 The Five-Step Exploratory Factor Analysis Protocol

The following Five step exploratory factor analysis protocol suggested by (Williams et al., 2012)
provides researchers with starting reference point in developing clear decision pathways (see Figure
3.3). Each of these steps is explained below in more detail.
The following Five-step exploratory factor analysis protocol was used for the extraction of
important factors.

35
Figure 3.1 The 5-step Exploratory Factor Analysis Protocol (Williams et al., 2012)

a) Suitability of data

The first step entails assessing the data to determine its suitability for factor analysis. A key
determinant of suitability is the sample size. Small data sets do not yield factors that generalize well
(Pallant and Manual, 2010). Larger samples are usually more desirable. Recommended sample size
for factor analysis varies considerably. They concede that in marketing research, it is often the case
that sample sizes may be reasonably small. The study sample of 200 was therefore adequate for
analysis.

36
The other key determinant of suitability of factor analysis is the strength of the item. One of the
first things is a correlation matrix of items within the construct of interest. It is suggested that if
few correlations between items are over .3, that factor analysis is relevant. This is essentially
because principal component analysis is looking to determine latent variables with the greatest
intra-item correlations, with different latent variables showing little correlation.

Regarding correlation matrix it is important that the variables should be intercorrelated, but they
should not been to highly correlated (extreme multicollinearity and singularity) as this could
cause problems in defining the distinctive role of the variables in a factor (Field, 2000). The
correlation matrix of this study it demonstrated the relationship between the variables and also
determined which variable had to drop.

Suitability of data for PCA can be explained through another test included Bartlett’s test of
sphericity and KMO (Kaiser-Meyer-Olkin) that measure the sample adequacy. It explained
whether the given responses of sample were adequate or not, because it measures the fitness
of the model (Malhotra, 2008).

According to Tabachnick and Fidell (1996) KMO and Bartlett‟s test should be significant at
(p<.05), however for a good factor analysis the minimum value for KMO should be 0.6 (Kaiser,
1970). It is considered that if the value of KMO is between 0.5 to 0.7 it is taken as moderate, values
ranged between 0.7 to 0.8 considered as good, but if the range is 0.8 to 0.9 it considered as
excellent. However, values above 0.9 considered as superb for factor analysis. On the other hand,
values below 0.5 to 0 showed that factor analysis should not be appropriate and it required more
data for accurate findings (Field, 2009).

Bartlett’s test explained the relationship and strength among the variables. This test checked the
null hypothesis, the correlation matrix is the an identity matrix in which value of all the diagonal
elements are 1 and all the off diagonal are closed to 0. The sphericity based on the chi - square
transformation of determinants. Greater the value support the rejection of null hypothesis,
otherwise fitness of model will be questioned mark.

37
b) Extraction of factors
Factor analysis is categorized into two approaches, confirmatory and exploratory factor analysis.
Confirmatory factor analysis is a more complex set of techniques used to confirm the structure
ofconstructs using structural equation modeling.Exploratory factor analysis mostly used in
examining how much items are interrelated, providing a suitable way to group the number of items
into fewer variables. Principal component analysis is useful when the objective is to reduce the
data providing „an empirical summary of the whole data set (Stevens, 2012). In present study
principal component analysis (PCA) was employed in order to identify dimensions and
dimensional composition.

c) Criteria for determining factors

The combination of techniques in principal component analysis was considered to gain the optimal
number of factors. Williams et al. (2012) suggested the eigenvalue and scree plot to analyze the
components in third step.

The eigenvalue suggested that only components with an eigenvalue (which relates to the extent
of variance explained) of 1 or above to be kept. Eigenvalues explained the factors, and the variance
in each factor. The percentage of variance can be calculated by dividing the Eigenvalues
with the total number of variables and multiply by 100. It is suggested that the cumulative
percentage of variance of factors should exceed 60% of total variance (Malhotra,2008).

The scree test is a visual aid to interpreting the variance of each component explained, by
plotting the eigenvalues for each factor. The graph is against the eigenvalues and the component
numbers. This graph helps in defining the appropriate factors that should be included in study for
analysis. This plot seems like a side of the mountain, the scree refers to the fallen debris at the base
of the mountain. The numbers of factors were appropriated till the graph sudden fall. We only kept
those factors in the study whose eigenvalue greater than 1.

38
d) Selection of rotational method
Factor rotation includes the factors having non zero or significant loading only for some of the
variables. Rotation does not affect the communality and the percentage of the total variance
explained. The variance explained by the individual factors is redistributed by the rotation. To
determine the rotation, the varimax rotation method was applied. This method of rotation
minimizes the number of variables with high loadings on the factor, thereby enhancing the
interpretability of factors. Factor loadings are the simple correlated between the variables and the
factors. A factor matrix contains the factor loadings of all the variables on all the factors
explained.

e) Interpretation and labeling of the factors

The final step, once the appropriate number of factors was determined, is to run the final PCA
and interpret it. This is described by researchers as Factor rotation and interpretation‟. At this
step, interpretations are done by identifying the variables that have large loadings on the same
factor. Those factors are then interpreted in terms of variables that load high on it. They note the
meaningfulness of latent factors is ultimately dependent on the researcher definition” It is
important that these labels or constructs reflect the theoretical and conceptual intent.

39
3.9.3 Logistic Regression
Logistic regression, analyzes the relationship between multiple independent variables and a
categorical dependent variable, and estimates the probability of occurrence of an event by fitting
data to a logistic curve. Binary logistic regression is typically used when the dependent variable is
dichotomous and the independent variables are either continuous or categorical. Since logistic
regression calculates the probability of an event occurring over the probability of an event not
occurring, the impact of independent variables is usually explained (Park, 2013).

In present study, a binary logistic regression analysis is performed in order to find out the consumer
behavior, the choice of retail format either Shopping malls and Local shops. The regressand
variable for this study was recognized as, retail format which had two categories termed as
“p r e f e r to shop at local shops” denoted as 0 and “p r e f e r to shop at S h o p p i n g m a l l s”
denoted as 1, whereas predictor variable or independent variable identified

Were included as factor loading scores. There were few control variable in this study (i.e. age,
gender, income, marital status, education, and transportation facility) and being accompanied
by children during the shopping also included.

Consumers were asked their preferences between traditional and modern stores through a structured
questionnaire. The Likert scale of 1 to 5 was used to indicate the responses either agree or
disagree with the statements that were related to their shopping preferences. The binary logistic
model, factor loading scores that extracted in factor analysis was utilized in shopping preferences.
The result of the table showed the logistic coefficient (B), Wald Statistics and also the degree of
freedom and Exponent (B) value of each of the independent and control variable.

The logistic coefficient (B) reflects the changes in Logit. The sign (- or +) indicate the
relationship of predictor and dependent variable. In logit a value of 0 means a probability of
50%. Therefore a positive value indicates an increase in probability of event 1 (SPSS divides the
dependent variable into 0 and 1). In SPSS exponentiated coefficient (exp(B)) reflect the changes in
Odds. Odd does not have negative values; therefore exp (B) will not have positive or negative
values. Instead, value 1 is used as benchmark for analysis. In Odds a value of 1 means a probability

40
of 50%. So exp(B) value of 1 also indicates a relationship with no direction (Hair, 2010)
When exp (B) value of 1 is taken as benchmark any value above 1 means a positive relationship
and any value below 1 means a negative relationship.

41
3.9.4 Logistic Model

The equation of this logit model is shown as follows: Logit (Y) = natural log (odds) = ln(π/1 − π) =
α + βx;
Where

Y is the place consumers prefer to shop; either at Local shops=0 or Shopping malls; =1

X1 is the consumer’s age; 0 = above 30 years old, 1 = below 30 years old,

X2 is the consumer’s education; 0 = below intermediate, 1 = above intermediate,

X3 is the consumer’s gender; 1 = male, 0= female,

X4 is the consumer’s marital status 0 = s i n g l e , 1 = married,

X5 is the consumer’s income; 1 = above 60,000, 0 = below 60,000

X6 is the consumer’s has own transportation; 1= Yes, 0= No

42
Table 3.2: Summary of types of analysis used for questionnaire

Type of
Type of Statistics Section of Questionnaire Objective of Analysis
Analysis

Section A: Consumer To understand the profile

purchase pattern from of the respondents and
Frequency Analysis,
shopping mall and local their shopping pattern
Cross Tabulation,
Descriptive shops
Pie
chart and Bar charts Section C: Demographics of
the respondents

Section B: Attributes that To ensure that all the

influencing consumer variables are not
Validity Test Factor analysis behavior for shopping malls correlated to one another.
and local shops

Section B: Attributes that To ensure the scale of the

influencing consumer measurement are reliable
Reliability Test Cronbach„s alpha behavior for shopping malls
and local shops
Section B: Attributes that To understand the
influencing consumer relationship between
behavior for shopping malls attributes of stores,
Logistic Binary Logistic
and local shops according to the consumer
Analysis Model
profile.
Section C: Demographics of
the respondents

43
Chapter 4
RESULTS AND DISCUSSION
This chapter explained the statistical analysis of consumer preferences in retail format choice in
Pakistan. Analysis of consumer behavior had been segregated into various sections. Section one
included the demographic profile of the consumers, section two discussed about the
purchase pattern and frequency of consumers. Section three lightened the preferred type of retail
format and purpose to visit the retail format by the consumers. Section four discussed the retail
store resolves the consumer’s concerns. Section five discussed the factor influencing the
consumer purchase pattern. Section six explained the relationship between the variable by
employing logistic regression. Section seven covers the problems and suggestion in order to
strengthen the Pakistan’s retail industry.
4.1 Socio-economic Characteristics of consumer
Socio-economic and demographic variables are important in social science research because these are
used as basis for segmenting the respondents and the important demographic variables are gender,
age, marital status, education, family size, household income, earning hands and household
expenditures which are given below:

Table 4.1 Gender of respondents

Shopping Malls Local Shops

Category

Frequency Percentage Frequency Percentage

Male 71 71% 65 86.67%

Female 29 29% 10 13.34%

Total 100 100 75 100

The gender is important variable table 4.1 explained most of 71per cent people were male and
29 percent were female from shopping mall, other hand 86 percent were male and 14 percent were
female from Local shops.

44
Table 4.2 Age of respondents (Years)

Shopping Malls Local Shops

Category

Frequency Percentage Frequency Percentage

Below 20 2 2% 2 2.67%

21-30 47 47% 26 34.67%

31-40 23 23% 18 24%

41-50 21 21% 17 22.67%

51-60 6 6% 11 14.67%

Above 60 1 1% 1 1.33%

Total 100 100% 75 100%

For better understanding of human behavior in any field of study, age is an important background
variable. The finding of study indicate that, there were only 1 percent respondents who were, most of
the respondents 47 percent belonged to the age group og 21-30, 23% belongs to 31 to 40 and lowest
percentage of age group was below 20 years and 1% was above 60 years in shopping mall. Other
hand in local shops mostly 34.67% respondents belongs to 21-30 age group and 24% was from 31 to
40 age group. And the lowest respondents belong to below 20 years 2% and 1% from age group
above 60 respectively.

45
Table 4.3 Marital Status of consumers

Shopping Malls Local Shops

Category
Frequency Percentage Frequency Percentage
Single 33 33% 17 22.67%

Married 67 67% 58 77.33%

Total 100 100% 75 100%

The table 4.3 present Most of the respondents 67 percent were married, 33% were single from
shopping mall. Other hand in local shops mostly 77.33% respondents belongs to married group and
22.67% was single. And the lowest respondents belong to below 20 years 2% and 1% from age
group above 60 respectively.

Table 4.4 Education level (Years)

Shopping Malls Local Shops

Category
Frequency Percentage Frequency Percentage

0 2 2% 9 12%

5 6 6% 12 16%

8 3 3% 6 8%

10 13 13% 15 20%

12 21 21% 11 14.67%

14 33 33% 16 21.33%

16 18 18% 6 8%

18 4 4% 0 0%

Total 100 100% 75 100%

46
Education level is very important socioeconomic character because it determines behavior of
respondents and has direct relationship with income. Among respondents education level was 33
percent belonged to the group of 14 years education, 18% belongs to 16 years education and lowest
percentage of education group was 0 year or illiterate and 3% were 8 years education in shopping
mall. Other hand in local shops mostly 21.33% respondents belongs to 14 years education group and
14% were from 12 years education. And the lowest respondents belong to 18 years education 0% and
8% from 16 years respectively. And 12 percent respondents were illiterate.

Table 4.5 Distribution of respondent’s Family size

Shopping Malls Local Shops

Category

Frequency Percentage Frequency Percentage

Below 3 2 3% 4 5.33%

4-6 69 69% 45 60%

7-9 28 28% 24 32%

Above 10 1 1% 2 2.67

Total 100 100% 75 100%

Considering the strong and direct impact of family size on income and consumption level of
household, family size in an important indicator. The table 4.5 elaborated that 69 percent respondents
belonged to 4-6 group of family size, 28% belongs to 7-9 family members and lowest percentage of
family size was below 3 and 1% was above 10 member in shopping mall. Other hand in local shops
mostly 60% respondents belongs to 4-6 family group and 32% were from 7-9 family size group. And
the lowest respondents 2.67 % belongs to family size above members.

47
Table 4.6 Distribution of respondents according to Occupation

Shopping Malls Local Shops

Category

Frequency Percentage Frequency Percentage

Business 36 36% 23 30.67%

Professional 23 23% 14 18.67%

Services 5 5% 3 4%

Home maker 18 18% 24 32%

Student 18 18% 11 14.67%

Total 100 100% 75 100%

The occupation is a socioeconomic character that always considered most important one. It
determines their income, living style and probable growth rate. In table 4.6 there was almost 36
percent respondent’s source of income is business, 23 percent are professional and 18 percent are
students in shopping malls. Other hand in local shops 30.67 percent respondent occupation is
businessman, 4 percent services and 32 percent are home makers.

48
Table 4.7 Distribution of respondents according to average household income (Rs)

Shopping Malls Local Shops

Category

Frequency Percentage Frequency Percentage

Up to 20000 0 0% 5 6.67%

21000-40000 28 28% 31 41.33%

41000-60000 29 29% 21 28%

61000-80000 20 20% 10 13.33%

81000-100000 7 7% 2 2.67%

More than 100000 16 16% 6 8%

Total 100 100% 75 100%

House hold Income

Another socioeconomic variable chosen was household income. It is very important character
because it directly affects aspiration level. Among all most of the respondents 29 percent earned to
the income group of 41000-60000, 28% belongs to 21000 to 40000 and lowest percentage of income
group was below 20000 and 7% was 81000-100000 in shopping mall. Other hand in local shops
mostly 41.37% respondents belongs to 21000 to 40000 income group and 28% were from 41000 to
60000 income group. And the lowest respondents belong to 81000-100000 2.67% and 6% from
below 20000 income group respectively.

49
Table 4.8 Earning hands

Shopping Malls Local Shops

Category

Frequency Percentage Frequency Percentage

1 79 79% 52 69.33%

2 17 17% 20 26.67%

3 3 3% 2 2.67%

4 1 1% 1 1.33%

Total 100 100% 75 100%

Number of earners is important character to study because family status and income varies directly
with it. More earners and few dependents depict a sustainable family. But among respondent it was
observed that a large proportion had only 1 earner as 79 percent, 17 percent had 2 earners and only 1
percent had 4 earners (100 respondents of sample population) in shopping malls. In local shop 69
percent had only one earner, 26.7 percent had 2 earners from 75 respondents of sample size.

Table 4.9 Distribution of respondents according to household Expenditures (Rs)

50
 Shopping Malls Local Shops
Category

Frequency Percentage Frequency Percentage

Up to 15000 2 2% 6 8%

15001-30000 35 35% 42 56%

30001-45000 31 31% 14 18.67%

45001-60000 17 17% 8 10.67%

60001-75000 4 4% 3 4%

More than 75000 11 11% 2 2.67%

Total 100 100% 75 100%

House hold consumption also shows variability among respondents. In shopping malls a large
proportion of households i.e. 35 percent had consumption between 15001-30000 rupees, and only 2
percent had consumption up to 15000 rupees. Other side most of 56 percent respondents had
consumption between 15001-30000 rupees, only 2 percent had consumption more than 75000 rupees
in local shops.

Table 4.10 Distribution of respondents according to average spending per visit (Rs)

51
 Shopping Malls Local Shops
Category

Frequency Percentage Frequency Percentage

Up to 3000 5 5% 15 20%

3001-6000 56 56% 32 42.67%

6001-9000 15 15% 10 13.33%

9001-12000 17 17% 11 14.67%

12001-15000 3 3% 3 4%

Above 15000 4 4% 4 5.33%

Total 100 100% 75 100%

Table 4.10 present the respondents spend per visit on shopping mall and local shops. Mostly 56
percent respondents spent per visit between 3001-6000 rupees, 15 percent spend per visit between
6001-9000 and4 percent spend above 15000 rupees per visit at shopping malls. Other hand 42 percent
respondents spend per visit between 3001-6000 rupees, and only 4 percent respondents spend per
visit between 12001-15000 rupees.

Table 4.11 Distribution of respondents according to average of travelling cost of consumers.

52
 Shopping Malls Local Shops
Category

Frequency Percentage Frequency Percentage

Up to 100 19 19% 41 54.67%

101-400 36 36% 26 34.67%

401-700 24 24% 4 5.33%

701-1000 15 15% 4 5.33%

More than 1000 6 6% 0 0%

Total 100 100% 75 100%

The table 4.11 illustrates the travelling cost of consumers for different retail format as shopping malls
and local shops. Mostly 36 percent of respondents travelling cost were between 101-400 rupees and 6
percent respondents travelling cost were more than 1000 rupees for shopping malls. In local shops the
respondents travelling cost were up to 100 rupees and 34 percent travelling cost were 101-400 rupees.

Table 4.12 Transportation

Shopping Malls Local Shops

Category

Frequency Percentage Frequency Percentage

Yes 97 97% 57 76%

No 3 3% 18 24%

Total 100 100% 75 100%

Transportation is important socio-economic variable, 97 percent respondents had means of transport

and 3 percent had not any transportation in shopping malls data. Other side in local shops data 76
percent respondents had transportation, while 24 percent respondent had not any transportation
facility.

Table 4.13 the shopping pattern of people shopping from Mall/ Local shops.

53
 Shopping Malls Local Shops
Category
Total
Frequency Percentage Frequency Percentage
Grocery 71 71% 29 29% 100
(Food items)
Grocery 86 86% 14 14% 100
(Non-food
items)
Apparel 48 48% 52 52% 100

Computer/ 58 58% 42 42% 100

Electronics/
Software

Health and Beauty 69 69% 31 31% 100

services

Pharmaceuticals 53 53% 47 47% 100

Book and Gifts 46 46% 54 54% 100

Fruits and 72 72% 28 28% 100

Vegetables

The table 4.13 presents the shopping pattern of grocery of food and nonfood item. The table
demonstrated that 71 percent and 29 percent consumer shop from the shopping malls and local shops
for grocery of food items respectively. However 86 percent shop from the shopping malls for the non
food items. From the local shops about 14 percent respondents purchased grocery of non food items
respectively.

This table enlightened that 48 percent respondents shop apparel and 58 percent electronics from
shopping malls. However, they least purchased apparel and electronics from local shops, 52 percent
and 42 percent respectively. The relation to the frequency of purchase of product form different
shopping place, this table shows that 69 percent, 53 percent and 46 percent consumers did shopping
from the shopping mall for cosmetics, pharmaceuticals and books and gift respectively. Other hand
31 percent, 47 percent and 54 percent respondents did shop from local shop for cosmetics,
pharmaceuticals and books and gift respectively.

54
The 72 percent respondents shopped fruit and vegetables, mostly through the shopping malls,
whereas, 28 percent consumer shopped from the Local shops.

Table 4.14 Consumer satisfactions related to shopping malls.

55
 Yes No
Category

Percentage Percentage Total

Pattern of the selling products at shopping malls 98% 2% 100

Any types of difference between Shopping mall and Local 94% 6% 100
shops
Purchasing products at the offer time only 71% 29% 100

Satisfied with shopping malls facilities 94% 6% 100

Satisfied with the employee behavior in shopping mall 87% 13% 100

Face any problem at the payment counter 42% 58% 100

Possibility of exchange of good after purchasing 77% 23% 100

Satisfied with their safe parking facilities 87% 13% 100

Finding shopping mall which is located at the good 79% 21% 100
location
Purchase every daily use products from shopping malls 61% 39% 100
only
The problem about pocket picker in shopping malls 31% 69% 100

56
Figure 4.1 Consumer satisfactions related to shopping malls

57
Table 4.15 Choose of shopping mall or local shops

Shopping Malls Local Shops

Category

Frequency Percentage Frequency Percentage

Recommendation of 48 47.5% 31 41.3
family/friends
Advertisement 22 21.8% 8 10.7

Information from search 7 6.9% 2 4

engine
Past experience 18 17.8% 27 36

Others 5 5% 6 8

Total 100 100% 75 100%

Table 4.15 present the respondents choose of shopping mall or local shops. in shopping malls 48
percent respondent go for the recommendation of family or friends, 18 percent respondents choose
shopping mall by past experience. While 41 percent respondent choose to go in local shops for the
recommendation of family or friends, and 8 percent people go to local shop by past experience.

58
Table 4.16 The reasons for visiting shopping malls or local shops

Shopping Malls Local Shops

Category

Frequency Percentage Frequency Percentage

Shopping 59.4% 39 52
60
Facilities 21 20.8% 10 13.3

Environment 8 7.9% 7 9.3

Entertainment/ leisure 10 9.9% 11 14.7

Eating 1 1% 8 10.7

Total 100 100% 75 100%

The table 4.16 described the 59 percent respondents visit to shopping malls for shopping, and 20
percent respondents visit for the reason of availability of facilities on shopping malls. Other side 52
percent respondents visit to local shops for the reason of shopping, and only 13.3 percent visit to local
shop for the reason of facilities.

Table 4.17 Intention for purchase of respondents

59
 Shopping Malls Local Shops
Category

Frequency Percentage Frequency Percentage

Shopping as regular 19 18.8% 9 12
activity
Recommendation of 3 3% 5 6.7
others
Special occasions 15 14.9% 13 17.3

Necessity 63 62.4% 48 64

Total 100 100% 75 100%

This table explained the intention for purchase of respondent, 62.4 percent respondents go to
shopping mall for necessity purchasing, 15 percent purchasing for special occasions. In the local
shops 64 percent consumer purchasing for necessity and 17.3 percent respondents purchasing for
special occasions.

4.5.1 Factor analysis

Factor analysis is an analytical technique for finding a way to reduce the data into fewer factors.
Hair et al. (2009) suggested that it was essential to conduct the factor analysis technique, as it
assisted the researcher to summarize the useful information into a useful set of data. However,
before proceeding the explanatory factor analysis, Kaiser-Meyer-Olkin (KMO) and Baretlett’s test
of Sphericity should be applied to checked the factorability of data (Pallant, 2007).
The table 4.18 shows that the value of Kaiser-Meyer-Olkin for the study was 0.800, which is greater
than 0.6 as recommended by (Kaiser, 1970), for running the factor analysis. The Bartlett’s
test the value was significant at 5% confidence level, with the approximate chi-square is 460.914
with 136 degrees of freedom determined the estimated factor analysis is accurate, indicating that
both test were under acceptable range to run the explanatory factor analysis.

Table 4.18 KMO and Bartletts

Test

60
 Kaiser-Meyer-Olkin
Measures of Sampling Adequacy 0.800

Bartletts Test of Approx. Chi-Square 460.914

Sphericity Df 136
Sig. .000

17 items had been derived after running factor analysis. All of these items were considered
significant, as they had loaded value greater than 0.50. Hair et al. (2009) suggested that any
loaded value greater than 0.50 considered practically significant.

The derived five components successfully attained the eigenvalues greater than one, as
suggested by (Pallant, 2007). Table 4.19 presents the total variance explained. Factor 1 had the
highest eigenvalue 2.953 with 17.369 % of total variance. The eigenvalue of factor 2 had a value
of 2.078 as compared to factor 1, contributing the 12.221 % of total variance with 29.59

61
cumulative percentages. Other factors also contribute in variance and percentage of cumulative
variance till the factor 5, where eigenvalue is 1.196 with the percentage of variance 7.036
contributing 59.231 percentage of cumulative variance that provided the essential information for
the interpretation of results.

Table 4.19 Total Variance Explained

62
 Total Variance Explained

Extraction Sums of
Initial Eigenvalues Squared Loadings Rotation Sums of Squared Loadings

% of Cumulative % of Cumulative Cumulative

Component Total Variance % Total Variance % Total % of Variance %

1 5.093 29.961 29.961 5.093 29.961 29.961 2.953 17.369 17.369

2 1.577 9.275 39.236 1.577 9.275 39.236 2.078 12.221 29.590

3 1.241 7.297 46.533 1.241 7.297 46.533 1.982 11.661 41.252

4 1.122 6.597 53.130 1.122 6.597 53.130 1.860 10.944 52.196

5 1.037 6.101 59.231 1.037 6.101 59.231 1.196 7.036 59.231

6 .950 5.591 64.822

7 .915 5.383 70.205

8 .794 4.672 74.877

9 .685 4.028 78.904

10 .624 3.673 82.577

11 .581 3.419 85.996

12 .524 3.082 89.079

13 .448 2.637 91.716

14 .417 2.451 94.166

15 .379 2.227 96.393

16 .338 1.988 98.381

17 .275 1.619 100.000

Extraction Method: Principal Component Analysis.

The figure show below explained that there were five factors whose value greater than 1, providing
the information regarding variances.

63
 Figure 4.2 Scree Plot

4.6 Determinant of Shopping Preference

64
Consumer’s purchase products from the shopping malls and local shops. In a structured
questionnaire, consumers were asked about their preference from these stores. Almost one half
of the consumers preferred Local shops (43%) while (57%) respondent preferred Shopping
malls.
The binary logistic model applied in order to calculate the magnitude of the variables that
influenced the relationship between binary response variable, i.e. the shopping malls and local
shops dimension of shopping behaviors and demographic variables.
Table 4.20 Model summary of the binary logistic model analysis for From shopping

Model R R Squre Adjusted R Std. Error of the

Squre Estimate
1 .440 .194 .165 .454

In the table 4.20 summary of the binary logistic model analysis point out a picture of correlation
coefficient association among the dependent variable and independent variables. The adjusted R 2
=.194 tell the number of observation are adequate for the analysis and standard error.454 value
representing standard deviation of the observation around the regression line. The coefficient of
determination R2 =.194 show that 19.4 percent variation dependent variable explained by
predictor.

65
Table 4.21 analysis of Variance of binary logistic regression

Sum of
Model Squares df Mean Square F Sig.
Regression 8.299 6 1.383 6.724 .000(a)
Residual 34.558 168 .206
Total 42.57 174

a)Predictors: (Constant), Transportation, gender, income, education, age

b) Dependent Variable: - From Shop(FS)

The overall relationship between FS and independent variable is explained in table 4.21. Here sum
of squares divided into three parts regression sum of square, residual sum of square and total sum
of squares.

Total sum of squares = Residual sum of square + Regression sum of square

Total degree of freedom is 174 which areobtaining from N-1, where N is number of respondents
which are 175. In this table the most important thing is that the significant value P= .000, which tell
us that over all model is significant or we can say that independent variables are significant
relationship with preferred for shop (FS).

66
Table4.22: Coefficient of binary logistic regression model variables for FS

Unstandardized Standardized
Coefficients Coefficients
Variables T Sig.
B Std. Error Beta

(Constant) .095 .147 .645 .520

Age .019 .106 .019 .180 .857

Education .245 .083 .245 2.932 .004

Gender -.115 .095 -.115 -1.211 .228

Marital
-.022 .110 -.022 -.199 .843
status
Income .022 .080 .022 .268 .789
Transportati
.518 .111 .518 4.675 .000
on

a )Dependent Variable: Preferred for Shop (FS)

In table 4.22 independent variables are age of respondents (Age), Education (Edu), gender of
respondents (SX), marital status (Mrt), Income of household (dY) and respondents have own
transportation facility (Trns). On the other hand the dependent variable is respondents Shopping
,preferred (FS). These results are on the basis of close ended questionnaire, all values of
independent coefficient have positive sign other than gender of respondents and marital status of
respondents have negative association with respondent shopping preffered (FS) and remaining
variables age, education, income of household and transportation and I have positive association
with FS.

The P values which are shown in last column tell us that age, gender, marital status and income
have insignificant effect on FS. Remaining variables education and transportation have significant
effect on FS.

67
a) Education

The results showed that education had a direct relation while choosing the specific retail
format, it has siginificant and positive relation with FS. This indicated that consumers who are
educated gave higher emphasis purchasing from Shopping malls. It has positive effect on FS.

b) Marital status

The model illustrates the marital status had a insignificant relation to shop from the modern
stores. The result showed that marital status also influenced shopping behavior.

c) Income

The impact of income is the insignificant but positive relation to shopping towards the choice of
retail format. The result showed that income had the influenced on the retail format choice.
These finding also supported by Goyal and Aggarwal (2009) who suggested that economic
variable such as income had impact, to purchase from modern stores.

d) Gender
The impact of gender is the insignificant and negative relation to shopping towards the preferred
to shop.
e) Age
The age of respondent has positive relation to FS. But it is insignificant relation to shopping
towards the choice of retail format of shopping malls or local shops.

f) Transportation
the respondents whom have their own transport facility it had positive relation with consumer
preferred to shop (FS), and it has significant results.

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Chapter 5
SUMMARY
This chapter draws the conclusions from the whole research and also provides the
recommendations for strengthening the retail industry in Pakistan according to the customer
needs and preferences. This chapter is divided into six sections. The first section provided the
summary of the whole research. In the second section conclusion was given and
recommendations are presented in the third section. Limitation of the study and suggestion for
future research have been given in forth and fifth section. Section six explained the contribution
of the study

5.1 Overview of the Study

The retail sector has built up strong lifestyle, brand positioning and customer mind mapping. The
modern consumer is seeking more value in terms of improved availability and quality, pleasant
shopping environment, financing option, trial rooms for clothing products, return and exchange
policies and competitive prices. Changing consumer behavior and taste, leads to a radical
transformation in living style and purchasing pattern provided the business new opportunities.
The consumer has multiple options to choose, ranging from the shopkeeper to the most
sophisticated supermarkets, departmental stores, plazas and malls which provide the latest and
better quality products.

In Pakistan, there is need to understand and point out the winning formats matched with different
segment, according to their taste and behavior of the customers. The present study identified the
consumer shopping behavior for the choice of retail format as shopping malls and local shops
in Pakistan. The Malls retailing transform the purchase pattern because they have more
alternatives to decide on. So it's essential for the retailers, to understand all those factors that
contribute in affecting consumer behavior. Thus, to analyze this, the study was conducted on
different retail format, a combination of the shopping mall and local shop retail format.

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To fulfill the research objectives, the primary data were collected through self-administrated
questionnaire. The sample comprised of 200 respondents living in Faisalabad city. Data were
analyzed through descriptive statistics that determined the percentage of demographics and
consumer purchase pattern from different areas. Factor analysis was applied to understand the
different attributes that influence the consumer behavior for shopping malls and local shops.
Then the logistic regression was applied in order to understand the relationship between the
variables.

In the survey, 136 were male respondents, while the remainder were female and 125
respondents were married. With most prominent age group ranged from 21 to 30 years were 41.0
per cent. They got a higher education respondents had large family size, with different
occupation having family income more than 100,000 Rs.

The study examined 57 per cent of the Pakistani patronage moves towards the shopping malls
for shopping due to easily accessible, variety, quality and for time saving. consumers used
bikes and cars as a travelling mode at shopping malls.

Shopper switch to different retail stores for shopping according to their needs (Woodside and
Trappey, 1992). However, 43 per cent shopping was done through the local shops on a daily
basis. Both weekly and monthly was done through department stores and supermarkets.

Respondents preferred shopping malls for the shopping of grocery of food and non food items.
Apparel, electronics, cosmetics, pharmaceutical and books, mostly purchased from the
specialty and department stores. Whereas, mostly respondent preferred traditional stores for the
purchase of fruits and vegetables.

Most of the respondents faced the problem of unhygienic condition of the store, improper
parking facility, selling of the counterfeit products and unavailability of branded items at local
shops outlet, while inconvenient location, long queue for billing and poor after sale service were
faced by the consumers at shopping malls.

The study also elaborated the most important factor that impacted on the consumer preference
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towards the retail format choice. It has been discovered through the results of the factor analysis
that eight factors product availability, store atmosphere, price, product quality, variety, location,
service were the most important factors that attract the customers to purchase from the particular
stores.

The binary logistic model was applied to analyze the extent to which factors influenced the
relationship between local shops and shopping malls. Binary response variable, dimension of
shopping preference and demographic profile. Regression coefficients for sex variables were
statistically significant, including two variables from the socio-economic characteristics and
demographic variables such as the respondent’s age, gender, marital status, e d u c a t i o n ,
transportation facility and income of household .

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5.2Conclusions
The diffusion of Shopping malls and the globalization of retailing are having a profound impact
on retail structures in developing countries. Pakistan has also experienced rapid retail changes in
the reform era. One of the most visible changes in the urban retail sector has been the emergence
and rapid growth of modern retail formats. The other is the entry and expansion of international
retailers spurred by Pakistan’s opening of the retailing industry to foreign investment.

The study had shown consumer of Pakistan purchased product from s h o p p i n g m a l l s

a n d l o c a l s h o p s according to their behavior. Consumer’s retail choice was determined
by age, income, marital status, whether education and transportation facility determined through
the behavior of shopping dimensions such as store atmosphere, promotion, product quality,
services, location and product availability. The study of Terano et al. (2014) determined, these
factors plays a significant impact in consumers choice of specific retail format. Since the
retail sector in Pakistan has coexisted alongside both local and modern markets, clarifying
influential determinants of consumer shopping behavior for retail format choice can
contribute to both retail formats, thus helping them to attract more customers. With the
number of shopping malls on the rise in Pakistan, residents of urban as well as suburban or rural
areas will soon have full access to shop at both local and modern markets.

To keep the retail sector thriving in both types of markets, this study has tried to figure out the
retail format choice to purchase products among Pakistani consumers. The results have shown
that many challenges still exist in product price setting in modern markets based on consumer
preferences, traditional markets are required to improve the store environment on several fronts
through such means as providing a clean experience, securing greater convenience for their
customers, and providing services to suit shoppers accompanied by children. This would
encourage those shopping at traditional markets to be more satisfied with their overall
experience.
5.3 Recommendations
The consumer behaviour showed that there is a strong relationship between the store format
choice and attributes of the stores. Different consumer perceived the attributes differently, the
store attributes help in choosing the particular retail format of their choice. The study suggested
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that consumers shop from the Shopping Malls because range of products convenientyly avaiable
with competitive price. Whereas, the Local shops were selected due to convenience and their
close location to the residential areas. So the retail stores are prioritixzed according to the need of
the target market.
Retailers will need to offer deep product expertise and a unique prodct education. Additionaly,
retialers must do these things in an environmnent that is increasingly experiential. Retailers must
also make it easy for consumer to engage when and how they want say, from their mobile devices
while they are at home or on the move.
Local shopper should also engage in doing primary market research to understand the needs of
concumers, their buying behaviour and about new brands which they are not aware which will
make them aware of their surroundings and help them to take corretive measures would help in
withstanding competition from the Shopping malls or modern retail formats. Traditional outlets
should undergo a transformation process, bringing in new changes which in turn increase their
competitiveness.
Each and every activity of the stores should lead to the satisfaction of the consumer or customer
delight. There are factors that define satisfactions such as, low level prices, high quality, high
ethical standards and environmentally friendly products, skillful and professional salesmen, safe
mode of payment, better layout of the store, honest dealing by the consumers, promote service,
early opening of the stores and least billing errors. Retailers should consider all these factors to
increase the level of satisfaction among the consumers.
Good ambiance provided by the retailer helps customers linger around the store for more time.
The physical environment has a major influence on the customers buying behavior. Therefore,
retailers must take utmost care to create a dynamic shopping experience in their stores. This can
be done through air conditioning of the store, free parking, proper lighting, good security, neat
and clean environment.
Promotional activities by the retailer attract customers to a large extent. Promotional activities are
undertaken during special occasions, off seasons, festival or on a particular day. The major
promotional tools used by the stores are discounts and coupons, exchange offers, low priced
products and other attractive schemes. Promotional factors do play a major role in choosing a
store format.

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5.4 Suggestion for Further Research
There are many areas on which further research can be conducted to gain a better understanding
of consumer preferences in retail format choice in Pakistan. First, as this study is limited in
location and sample size, subsequent research should consider a larger and more diverse sample
drawn from every part of the country. This is because a geographically and demographically
diverse sample is important for the purpose of clear generalizability.

Future researchers should consider in collecting larger samples to avoid sampling error.

This study has not explored the critical factors affecting consumers cross-shopping (multiple
store patronage) and store-switching behavior. Though it is a common phenomenon to patronage
multiple stores in an evolving retail market, yet it needs to be investigated.

The study covered shopping only in the context of physical retail formats, thus the findings
mig4ht not apply to non-store retailing (e.g. online retailing).

5.5 Limitation of the Study

This study was limited to, consumers in Faisalabad area only, which may not be truly
representative of the total market. This is because, traditional grocery stores are losing their
market share in large cities, but they are still strong in rural areas.

The study only focused on eight factors (product variety, quality, availability, store atmosphere,
price, promotion, location and services), to examine predict consumer behavior for Local shops and
Shopping malls. There are still many other factors that can be taken into consideration, such as
pychographic, geographic and cultural points of view.

The findings of this research were interpreted within a sample size of 200 which is considered
small. A larger sample might produce different results and different implications. A large and
diverse sample is able to produce more generalized results.

The sample selection was random and convenience based and this might not be perfectly
representative of the retail scenario.

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