Retail spending and store location during a recession: an analysis of changing consumer behaviour and interaction patterns

Since falling into recession in June 2008, the British economy has been in a state of sustained instability. During this period, Great Britain (GB) has experienced high rates of inflation, increasing unemployment and widespread consumer uncertainty. It has become clear that new shopper ground rules have emerged, as consumers have begun to break from their established routines, seeking both quality and value for money. This has been no more evident than in the British grocery market, the lead sector of the retail industry, as consumers have been forced to evaluate all aspects of the household budget, including essential items such as food. In addition to the macro-economic pressures, the grocery sector is also being shaped by long-term structural trends that continue to drive the retail industry as a whole. Those of noticeable importance are the changing nature of the British high street, online retailing, growth in convenience shopping, market saturation and increasing internationalisation. Consequently, to understand change in grocery retailing, geographers need to move away from a one-dimensional account of the recession and consider the conflicting perspectives of governments, regulators, retailers and consumers that are also at work.

This thesis contributes to ongoing research aimed at quantifying the impact of the recent recession on the British grocery market. The research benefits from a collaboration with Acxiom Ltd, through the use of a large-scale household survey aimed at recording local patterns in consumer behaviour across GB. To provide a holistic approach, insights into supply-side trends (changing retail formats, market saturation, e-commerce and internationalisation) are explored in conjunction with issues of demand (changes in household expenditure and customer patronage) – making it possible to separate recessionary trends from those deemed more longstanding. The complexities underpinning grocery retailing are then integrated through the construction of a disaggregated Spatial Interaction Model (SIM) to facilitate opportunities for growth in the grocery market. The disaggregation of the SIM by consumer type affords tremendous potential for the model to incorporate flows between different households and retail brands – recognising that some households are more willing or able to travel further to shop at their retailer of choice. The thesis demonstrates how the SIM is utilised to investigate growth opportunities in the discount market, highlighting the potential for expansion in both already saturated (Yorkshire and the Humber) and previously untapped markets (London) respectively.