The Effect of Culture on Private Label Purchasing Behaviour (A Comparative Studv of Supermarket Shoppers in the UK and China)

In the light of both increasing competition and internationalization in retailing, consumer behavior has become an important determinant of the performance and development of international retailing. The use of private labels has increased significantly during the last decade and particularly during the most recent global economic recession. However, while the role and impact of private labels has been studied in a considerable depth in Western countries, particularly in the United Kingdom, it remains largely unexplored in other parts of the world, including China, a major economic and political force, culturally distinct from the rest of the world and where supermarkets are still in the early stages of development, in number, location, what they sell and how they sell.

The aim of this thesis is to investigate the impact of culture on the propensity of supermarket shoppers to purchase private label products, using a perceived risk framework from a cross-cultural perspective. A comparative study is undertaken of shoppers in Tesco, the world’s third largest grocery retailer, in the UK and China.

Structural equation modelling is used to test a conceptual model based on the theory of perceived risk and the core elements of Hofstede’s cultural dimensions.

The results show both similarities and differences in the two countries in the propensity of shoppers to purchase private label products, with cultural factors having a significant impact on their perceived risk.