Discounters versus Supermarkets and Hypermarkets: what drives store-switching?

The paper aims to study in depth the impact of three pull drivers, namely price, assortment and promotion, on store-switching from Hypermarkets and Supermarkets towards Discounters. Through panel data analysis of IRI-sourced real consumer sales data from the grocery retailing market in Italy, the paper shows that Discounters’ market share increases to the detriment of the two competing store formats when price gap becomes wider and assortment gap narrower. Conversely, an increase in Discounters’ promotion intensity does not seem particularly effective in driving the same store-switching effect. The intensity of sales share trade-off is higher when coming from Supermarkets rather than Hypermarkets. This suggests that competition between Discounters and Supermarkets is intratype, and so fierce that they become direct substitutes for each other. On the contrary, competition between Discounters and Hypermarket is intertype, so that they complement one another as integrated shopping touchpoints.