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Customer satisfaction is crucial in today's competitive retail environment if one wants to position themselves successfully. Through their study on the elements of service quality that influence customer satisfaction, researchers have made a significant contribution to the literature in this area. The micro and macro environmental elements constantly evolve; therefore, it is important to identify context- and country-specific metrics that different customers use to rate the quality of services.
Due to the COVID-19 pandemic, worldwide retail sales decreased by 2.9 percent in 2020; fortunately, it recovered and increased by 9.7 percent in 2021. By 2022, it was predicted that global retail sales would exceed 27.3 trillion dollars, up from roughly 23.7 trillion dollars in 2020 (Sabanoglu, 2022). The size of the global food and grocery retail industry was estimated at USD 11,324.4 billion in 2021, and it is projected to increase at a 3.0% CAGR from 2022 to 2030. The rise in growth may be mostly attributed to consumer polarisation, higher grocery expenditure induced by COVID-19 lockout, and increasing online grocery sales volume. Despite the growing popularity of online businesses in grocery retail, people still prefer to buy groceries on a regular basis in large quantities from shops directly, where they can physically verify the quality and other attributes of the products before making the purchase (Park and Thangam, 2019; Robert, Xu, Mettos,2003). Unlike other food segments, the organized retailing in Fruits and Vegetables sector has been a slow mover as approx. 94% of Indian markets are captured by conventional vendors, hawkers, peddlers (Negi and Anand, 2016). Even though, the growth of retail sector is attributed to both regional and international players in various sectors of retail, grocery retail sector is dominated majorly by local players in almost all the countries. This is because of more instances of failure of overseas ventures than their success in case of grocery retail (Marcel and Rajiv, 2012).
The limited existing literature provides contradictory and inconclusive evidence which is concerning for a number of reasons. Firstly, it is widely accepted that national culture influences many aspects of consumer behaviour (De Mooij, 2017). Therefore, it is important for retailers continuing or planning their international expansion efforts to be mindful of cultural differences between markets (Pederzoli and Kuppelwieser, 2015). Secondly, many retailers, including the world's largest retailer Walmart, have struggled in international markets, with the lack of cultural understanding being identified as a key reason (Hunt et al., 2018).
By coordinating their marketing initiatives regionally and culturally, only a few big retailers, such Wal-Mart, Tesco, Carrefour, etc., have been successful in creating their worldwide presence in a number of countries. Along with several other emerging businesses, such major international players also want to expand their network internationally. As a result, these multinational powerhouses need to understand consumer behaviour as well as their needs and perspectives on diverse cultures that exist in different countries.
The food and grocery sector accounted for over 65% ($525 billion) of the retail business in India in FY 2019, followed by clothes and footwear (9.8%) and consumer durables and IT (9.2%). The penetration of organised retail in the food and grocery industry, however, was just 3.6% in 2019, highlighting the importance of unorganised traders, who hold an estimated share of almost 61% (Gutgutia, 2019).
Traditional mom-and-pop businesses continue to control a large share of the food retail industry in India, with organised grocery retail making up just approximately 2% of the country's overall retail sector. (Retail Industry of India, 2015). In 2021, there were more than 8,000 contemporary grocery retail establishments, but this is still a very small number when compared to conventional food merchants (kirana stores and corner shops), with a total of over 12.8 million stores (GAIN Report, 2021).