SHELF LABELING OF ORGANIC FOODS: EFFECTS ON CUSTOMER PERCEPTIONS AND SALES

Marla Reicks, Patricia Splett and Amy Fishman

No 14307, Working Papers from University of Minnesota, The Food Industry Center

Abstract: The organic food industry is undergoing tremendous expansion. Retail grocers and organic food suppliers are interested in promoting organic foods to customers in mainstream grocery stores. The purpose of this study was to determine if point of purchase (POP) signage in retail grocery stores affects customer perceptions of organic foods and organic food purchasing behavior (sales). An experimental study was designed in which control and two levels of POP signage were tested in two grocery store environments in the Twin Cities metropolitan area. Ten stores were involved; six from an upscale chain and four from a discount/warehouse chain. A customer intercept interview method was used to determine the perceptions of approximately 400 customers in each store; and sales data were tracked for 14 selected organic food items. Results revealed that customers in upscale stores were more likely than discount/warehouse store customers to recognize signs designating organic foods. Younger people, women and those having larger household sizes recognized organic signage most often. In both chains, signage increased the proportion of customers who reported ever buying and planning to buy organic foods. Sales data suggest a positive effect of POP signage on volume of sales for some, but not all tracked foods. Signage significantly increased the sales of skim milk, butter, eggs, deli bread, fresh carrots, spaghetti and flaked cereal in the discount/warehouse stores. In the upscale stores, significant effects of POP signage were found for skim milk, spaghetti, peach nectar and fresh carrots when the sales figures were adjusted for the store's weekly sales volume. The mixed sales results underscore the dynamic interplay between the store environment, its customers, and POP technology.

Keywords: Food Consumption/Nutrition/Food Safety; Institutional and Behavioral Economics; Marketing (search for similar items in EconPapers)
Pages: 78
Date: 1997
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:umrfwp:14307

DOI: 10.22004/ag.econ.14307

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