The Impact of Consumer Confidence on Store Satisfaction and Share of Wallet Formation

• We study how consumer confidence affects satisfaction and share of wallet formation.
• We identify three main store attribute factors: service, price and convenience.
• We find that the effect of service on satisfaction is stronger when confidence is low.
• Consumer confidence does not moderate the effect of price on customer satisfaction.

For retailer managers, it is crucial to understand the relationships between customers’ store attribute evaluations, satisfaction, and share of wallet as well as how these relationships change over time depending on the business cycle. This study investigates this complex relationship using an extensive dataset for all grocery chains in the Netherlands over the period 2009–2012. Our findings indicate that retailers should not overemphasize the importance of a favorable price image in times of low consumer confidence. Instead, our study shows that the relationship between service attributes and customer satisfaction is stronger in periods with low consumer confidence.

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