International Journal of Hospitality Management 77 (2019) 169–177

Contents lists available at ScienceDirect

International Journal of Hospitality Management

journal homepage: www.elsevier.com/locate/ijhm

Experience, brand prestige, perceived value (functional, hedonic, social, and T

financial), and loyalty among GROCERANT customers
⁎
Seoyoung Kima, Sunny Hama, Hyeyoung Moona, Bee-Lia Chuab, Heesup Hanc,
a
Department of Food & Nutrition, Institute of Symbiotic Life-TECH (Techonology, Ecology, Culture, Human), Research Center for Food, Nutrition and Foodservice
Management, College of Human Ecology, Yonsei University, 50 Yonsei-ro, Seodaemun-gu, Seoul, 03722, South Korea
b
Department of Food Service and Management, Faculty of Food Science and Technology, Universiti Putra Malaysia, 43400, Serdang, Selangor, Malaysia
c
College of Hospitality and Tourism Management, Sejong University, 98 Gunja-Dong, Gwanjin-Gu, Seoul, 143-747, South Korea

A R T I C LE I N FO A B S T R A C T

Keywords: The food service industry has already observed that a merely good quality of products/services cannot make a
Grocerants business successful and has emphasized the importance of delivering unique and memorable experiences.
Experience Grocerants meet customer demand by filling the roles of grocery stores and restaurants, while offering novel and
Brand prestige special experiences to customers. This study explores the unique experiences staged in grocerants by applying
Value
the experience economy and associates such experiences to brand prestige, customer perceived value, and
Loyalty
Restaurants
loyalty. Data was collected at grocerants in Korea, using a mall-intercept survey. Our results identify the positive
effects of entertainment and escapist experiences on brand prestige which significantly triggers functional, he-
donic, social, and financial values. The three values (functional, hedonic, and financial) also affect loyalty.
Overall, the proposed theoretical framework sufficiently accounts for customer loyalty. This study was the first
attempt to investigate grocerant patrons’ behaviors and thus includes a high degree of originality.

1. Introduction visits (Charlebois, 2017).

“Customer experience is the last source of sustainable differentia-
tion and the new competitive battleground” (Afshar, 2017, p. 1). With
more and more choices available in the market, the McKinsey report
(2016) stressed the importance of the customer-experience business. In
addition to the food and services that restaurants have traditionally
sold, establishments are now required to meet customer expectations by
providing environments that deliver consistently engaging and mem-
orable experiences to customers at every touch point of the operation
(Deloitte, 2017). Grocerants have emerged as a new food service seg-
ment that differentiates itself from the others by offering unique food
service experiences to customers (Topper, 2016). While grocerants have
emerged as “the blurring of the line between restaurants and grocery
stores” (Celentano, 2017), they have transformed groceries into desti-
nations with fun food and shopping experiences (Dixon, 2017). Forbes
magazine stated that “neither restaurants nor grocery stores are the
future of food shopping. Instead, what could dominate is a hybrid of the
two, ‘grocerants’” (McGrath, 2016, p. 1). According to a report from the
National Purchase Diary Panel Incorporation, grocerants in the US, in
2016, amounted to US $10 billion in sales, generating 2.4 billion new
A grocerant, a term blending groceries and restaurants, is a new
concept that reflects the changing perspectives of customers who feel
that supermarkets are not mundane places to just shop for food, but are
experiential food destinations (Dixon, 2017). Grocerants offer a for-
malized dining experience with a fast-casual and ambient atmosphere,
as well as restaurant-quality, fresh, chef-driven food (Allen, 2016). For
instance, Mariano in Chicago offers a new class of fun and engaging
experiences, including live pianists, grill outs, wine tastings, gelato
shops, and more (Dixon, 2017).
Grocerants can range from upscale (e.g., Eataly and Wholefoods) to
seemingly conventional grocers (e.g., H-E-B and Hy-Vee) (McLynn,
2016), while more and more grocerants are targeting upscale segments.
Eataly, starting in Italy in 2004, entered the US with a first store in New
York City. Currently, it has imported its stores to ten countries in the
continents of North America, South America, Western Europe, and Asia,
and it plans to launch stores in Hong Kong, Las Vegas, London, Brussels,
Sydney, and more (Skrovan, 2017). It features a retail-restaurant
combination that sells signature meals according to different locations,
in addition to imported and rare items (Skrovan, 2017). Eataly is fa-
mous for Fico Eataly World, the world’s largest agri-food theme park

⁎
Corresponding author.
E-mail addresses: lovelyeven@yonsei.ac.kr (S. Kim), sham2@yonsei.ac.kr (S. Ham), hye-moon@hanmail.net (H. Moon), beelia.chua@gmail.com (B.-L. Chua),
heesup.han@gmail.com (H. Han).

https://doi.org/10.1016/j.ijhm.2018.06.026
Received 2 March 2018; Received in revised form 13 June 2018; Accepted 27 June 2018
Available online 14 July 2018
0278-4319/ © 2018 Elsevier Ltd. All rights reserved.
S. Kim et al.
located in Bologna, which offers a unique experience in two hectares of
open-air fields. The Fico Eataly World offers experiences in and out of
the building, such as farms and factories where you can attend 30
events and 50 classes per day, while theaters and learning facilities also
play a role in offering holistic food and agricultural experiences
(Ginsberg, 2017).
Wholefoods is another prime example of upscale grocerants.
Founded in the US in 1980 as promoting organic and healthy food and
furnished with eco-friendly wood, Wholefoods expanded to Canada in
2002 and the United Kingdom in 2004. As of January 2017, Wholefoods
operates 467 stores, of which 446 are in the United States, nine in the
United Kingdom, and twelve in Canada. Wholefoods transformed food
shopping into a showtime place, appealing to customers with a sensory,
emotional, and experiential experience. It offers fun experiences like
Candy Island, where customers enjoy chocolate-dipping fresh straw-
berries in a fountain and smell scorching nuts; Lamar Street Greens,
where customers can shop for organic produce, salads, and wines; and
Street Seafoods, where customers can enjoy 150 kinds of fresh seafood
in one spot (Matson, 2018 n.d.).
As people’s lives become more hectic, time-starved consumers look
for the convenience of not shopping merely for prepared foods but also
experiencing a full-service or semi-service type of restaurant, which
looks like a fast-casual restaurant space (Dixon, 2017). To take in more
food revenue, grocery stores are increasingly developing restaurant-
style services, and they have spawned the new hybrid of grocerants
(Crepeau, 2015). By now, the new segment of grocerants has caught the
eyes of those with higher income in urban areas and those who are
more stressed for time than money (McLynn, 2016). Millennials show
interest in the unique benefits and experiential offerings that grocerants
deliver (McGrath, 2016). Millennials are sophisticated consumers who
are motivated by the variety of prepared meals, healthy options, and
freshness that grocerants offer (McLynn, 2016). The grocerant concept
also appeals to both young and old. Seniors visit grocerants, because
they can buy small portions of prepared food for one- or two-person
households and obtain both groceries and food services, which offers
convenience by saving time and labor, which otherwise would be spent
preparing food at home (McGrath, 2016).
While customers look for special experiences, such experiences are
meaningful to companies both financially and non-financially.
McKinsey (2016) reported that well-performed customer-experience
businesses improved revenues by 5–10% while achieving a cost re-
duction of 15–25% in two or three years, which ultimately gained
customer loyalty. A survey by Deloitte (2017) reported that, among
customers having positive experiences, 60% would visit the restaurant
again more frequently.
While experience may come from many elements, it shapes or
changes customer perception of a brand (Morgan, 2017). For every
company, customer satisfaction is a prime achievement. Meyer and
Schwager (2007) indicated that every point of the customer experience
adds customer satisfaction, which can rise to a culmination with a series
of well-designed customer experiences. However, a good experience
that customers feel does not come from the multiplicity of experiences.
Instead, a good experience that shapes a successful brand should be
“embedded in the fundamental value proposition” in every experience
feature (Meyer and Schwager, 2007, p.3).
Prior studies examined experiences in hospitality and tourism.
While the Oh et al. (2007) study was a pioneer in developing a mea-
surement scale of the experience economy applicable to the hospitality
and tourism industry, it also tested the measurement in the bed-and-
breakfast industry. Other studies applied the experience economy and
empirically tested the luxury cruise and casino industry (Hwang and
Han, 2014, 2016a, 2016b), rural tourism (Loureiro, 2014; Sidali et al.,
2015), the museum industry (Radder and Han, 2015), and the temple
stay (Song et al., 2015). In addition, the experience economy constructs
were shown to be pertinent and applicable to wine tourism (Quadri-
Felitti and Fiore, 2012).
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International Journal of Hospitality Management 77 (2019) 169–177
Grocerants have emerged and grown as a new food service segment
that signifies customer experiences, and there is a need to study the
experience in grocerants and its impact on business success. While
grocerants are targeting upscale segments, the novel and special ex-
periences that customers receive form brand prestige (Ergin and Akbay,
2010). To understand customer experiences in grocerants, this study
explores the relationship between experience, brand prestige, customer
perceived value, and loyalty. To this end, this study applied Pine and
Gilmore (1998)’s experience economy concept.
From a service provider’s standpoint, the customer experience
should be carefully managed, because it significantly influences cus-
tomer attitudes and perceptions (Lemon and Verhoef, 2016), which
lead to the success of businesses by influencing important purchase-
related factors. This study is meaningful to academia and industry. This
is the first study of grocerants. In particular, it focuses on the experi-
ences that comprise one of the key factors for a brand or company to
achieve or maintain a competitive advantage. The findings of this study
will offer practical implications for the experiences to be managed in
grocerants.
2. Literature review
2.1. Emergence and growth of grocerants
A grocerant is defined as a grocery store that offers groceries as well
as prepared foods and “a sit-down dining experience” (Crepeau, 2015,
p. 4) or “a freestanding restaurant that is located either adjacent to or
within a supermarket” (Dixon, 2017, p. 7). While the term indicates
“the trend of groceries implementing restaurant footprints either inside
or adjacent to their stores” (Sanders, 2017), the term of grocerants is
generally restricted to stores with “a fully-embedded restaurant-style
experience (i.e., an in-house Starbucks)” (Sanders, 2017). The emer-
gence of grocerants signifies “the blurring of the line between restau-
rants and grocery stores,” and it aims to serve time-starved consumers
who look for ready-to-eat or ready-to-heat food that can be consumed at
home with little or no preparation (Celentano, 2017) or further res-
taurant-type food services where consumers can eat meals as in fast-
casual restaurant spaces (Dixon, 2017).
While restaurants are fighting supermarkets for consumers’ food
dollars, grocerants have entered the mainstream of food retailers (The
Hartman Group, 2017). According to the Food Retailing Industry
Speaks 2016 Report (Dixon, 2017), about 90% of food retailers are
planning to furnish space allocated to fresh-prepared dinner meals. This
indicates that grocerants are reflecting consumer demand and finding
ways to provide higher-quality culinary experiences (Burfield, 2017).
Wegmans Market Café is an early pioneer of grocerants. It is a US
supermarket chain located on the East Coast, with 95 stores in states,
including Massachusetts, Maryland, New Jersey, New York,
Pennsylvania, and Virginia. While some conventional supermarkets are
moving to grocerants (e.g., H-E-B and Hy-Vee), most primary gro-
cerants are upscale (McLynn, 2016). The prime examples are Eataly and
Wholefoods, which are described in the Introduction, along with special
experiences that each offers. Le District in New York offers three sec-
tions labeled as café, market, and garden districts. Other examples in
the US include Il Buco Alimentary and Vineria in New York, selling
Italian food and cuisine. In Europe, Urban Deli in Sweden, Dayles for
organic in England, and Bilder & de Clercq in Denmark are operated.
Further, upscale grocerants in France are successful with a French
version of Dean & Deluca called “Maison Plisson,” premium food courts
in the department store “Le Bon Marché,” and “Lafayette gourmet.”
Peck, SSG, and Gourmet 494 are upscale grocerants operating in Korea.
2.2. Experience economy
“Innovation to create high-quality experiences that customers will
pay for is even more important than goods or service innovation” (Pine
S. Kim et al.
and Gilmore, 2014, p. 25). Because companies cannot differentiate their
offerings with only a high quality of products and services any more,
the need for memorable experiences has emerged in the consumer re-
tailing and service industries (Pine and Gilmore, 1999; Gilmore and
Pine, 2002a, 2002b). The concept of experience has been most well-
known in the “experience economy” suggested by Pine and Gilmore
(1998). The experience economy is based on the theory of experienced
utility in the field of behavioral economics (Kahneman and Thaler,
1991), where utility is defined as “the benefits consumers get from an
experience” (Read, 2007, p. 45). Pine and Gilmore (2014) defined an
individual’s experience “as commercial offerings that engage customers
in memorable ways” (p. 24). Pine and Gilmore (1998) described ex-
perience as the fourth economic offering, followed by commodities,
goods, and services, in the progression of economic value, which illus-
trates that “staging experiences” create a new source of value, which
results in the development of economic value as a final stage and which
is added to the functional quality of products and services. Pine and
Gilmore (1998) demonstrated the shift of the business paradigm from
commodities production, high quality goods, and delivery-focused
services to staged experience. This signifies consumer demand for dis-
tinct experiences aside from product and service delivery. Leading-edge
companies should respond to the fast-growing consumer demand for
unique and memorable experiences. The next competitive business
battleground will be how staging experiences occur (Pine and Gilmore,
1998), because the provision of memorable experiences that customers
desire results in enhanced customer satisfaction and purchase-related
behavioral intentions (Chen and Chen, 2012; Hosany and Witham,
2010; Hwang and Han, 2016a).
According to Pine and Gilmore (1998), the experience economy
consists of four realms (dimensions) classified by two criteria: the level
of consumer involvement (i.e., passive and active participation) and
consumer connection with certain events or performances (i.e., ab-
sorption and immersion). The four experiential realms are education
(active participation and absorption), entertainment (passive partici-
pation and absorption), esthetics (passive participation and immer-
sion), and escapism (active participation and immersion).
Educational experience indicates some events to involve people to
learn something new, such as taking a cooking class or attending a ski
lesson. As it is a learning process, people get engaged in more active
participation, although they are rather absorbed than immersed in the
event. Entertainment experience includes events to have people enjoy
and entertained (Chang, 2018), such as watching a baseball game or
attending an opera concert. Thus, people participate in the entertain-
ment experience more passively than actively, while they are still
outside the entertainment, and thus rather absorbed than immersed.
Esthetics experience refers to the event which offers the environ-
ment where people feel indulged, such as visiting an art gallery, or
enjoying exotic restaurant interior. Through the experience, people feel
the event, and thus immersed, while they make no impact on the event,
and thus passive. Escapism experience makes people diverging to a new
self, or being away from the present real life through events, like taking
a role in a play, playing a piano in an orchestra. Thus, although they
provide education or entertainment, people participate in the event
more actively and get immersed.
A number of studies of tourism and hospitality have investigated the
role of the four E’s in important business variables (e.g., Chang, 2018;
Hwang and Han, 2016a, 2016b; Loureiro, 2014; Hwang and Hyun,
2017; Oh et al., 2007; Quadri-Felitti and Fiore, 2012; Radder and Han,
2015; Sidali et al., 2015; Song et al., 2015; Byun and Jang, 2018). While
the study of Oh et al. (2007) was the first to develop a measurement
scale of the experience economy for the hospitality and tourism context,
it also empirically validated the application of the experience economy
to the bed-and-breakfast industry. In the empirical study to the B&B
experiences, the esthetics dimension was a primary determinant of
experiential outcomes. However, the entertainment and escapism di-
mensions did not have significant effects on dependent variables, like
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International Journal of Hospitality Management 77 (2019) 169–177
guest satisfaction and overall quality (Oh et al., 2007).
Using the scale developed by Oh et al. (2007), other studies in-
vestigated the experience economy in different contexts. Hwang and
Han (2016a), for example, applied the concept to the luxury cruise
industry and showed that all four domains of experience significantly
affected customer value and loyalty, mediated by brand prestige.
Radder and Han (2015) examined the experience economy in a mu-
seum context and found that edutainment (education and entertain-
ment) significantly affected overall satisfaction, revisit intention, and
word-of-mouth. Escapism, however, did not have any significant effect
on dependent variables, and esthetics affected only overall satisfaction.
Song et al. (2015) also investigated the influence of experiences in the
temple stay context and revealed that the entertainment and escapist
experience significantly affects both functional and emotional value,
while the educational experience affects only functional value and the
esthetic experience influences only emotional value. Loureiro (2014)
also investigated the experience economy in rural tourism.
Further, Pine and Gilmore’s concept was applied to food tourism,
such as wine and rural tourism. Quadri-Felitti and Fiore (2012) and
Sidali et al. (2015) contextualized the dimensions of the experience
economy pertinent to illustrating the experiential nature of wine and
rural tourism. Experience was also an important research topic in the
restaurant industry (Chen et al., 2014; Beldona et al., 2014; Zhao,
2016), including in nostalgic-themed restaurants (Chen et al., 2014), e-
tablet restaurant menus (Beldona et al., 2014), and queuing manage-
ment in a restaurant service (Zhao, 2016).
2.3. Brand prestige
Brand prestige refers to the comparatively high positioning of a
product related to a brand (Steenkamp et al., 2003), which represents
individuals’ status or esteem in association with the brand (Stokburger-
Sauer et al., 2012). The brands of products that are inherent or unique,
which signifies “a specific attribute or the overall quality and perfor-
mance of the produce,” are deemed to be prestigious (Dubois and
Czellar, 2002, p. 4). According to Vigneron and Johnson (1999), who
proposed the concept of “conspicuous consumption,” people pay higher
prices for prestigious brands than normal, or standard brands, because
they believe that doing so signals their social status and wealth.
Therefore, prestigious brands have a scarcity nature, and they receive
attention and interest from consumers who hold economic power
(Vigneron and Johnson, 1999). Because prestigious brands represent
consumers’ social status, wealth, or power, consumption of prestigious
brands enhances their self-concept and social image (Vigneron and
Johnson, 1999).
Vigneron and Johnson (1999) suggested five values that prestige
brands can provide to prestige-seeking consumers, including con-
spicuous value (to signal wealth or social status), unique value (scar-
city), social value (the social group an individual belongs to regard the
brand highly), hedonic value, and quality value. While the first three
values are associated with social or interpersonal effects, the latter two
values present personal effects. The study clearly states that consumers
select prestigious brands because of the view of others, and not only
because of quality or personal pleasure. Previous studies demonstrated
important variables relating to brand prestige in the consumer industry.
Customer experience is a significant antecedent of brand prestige, while
brand prestige positively affects customer perception and behavioral
intentions, including satisfaction and loyalty. The antecedents and
consequences of the brand prestige variable are discussed in Section 3
(Research framework and hypothesis development).
3. Research framework and hypothesis development
3.1. Experience and brand prestige
The brand prestige that consumers perceive is created by a
S. Kim et al. International Journal of Hospitality Management 77 (2019) 169–177

multitude of experiences that customers receive from a brand (Ergin
and Akbay, 2010). The positive influence of experience on brand
prestige was empirically tested in the restaurant industry, including in
luxury restaurants (Hwang and Hyun, 2012), coffeehouse brands (Choi
et al., 2011), the tourism industry, the airline industry (Ahn et al.,
2015), and the luxury cruise and casino industry (Hwang and Han,
2014, 2016b).
The literature also demonstrated that each dimension of experience
affects brand prestige. Educational experience offering new knowledge
and skills positively influenced brand prestige among luxury cruise
passengers (Hwang and Han, 2016a). This study also showed that en-
tertainment experience affects brand prestige, because entertainment
improves perceived value toward a brand by enabling consumers to
have fun (Suh and West, 2010; Teng and Chang, 2013). Similarly, be-
cause people’s emotional responses are easily influenced by the physical
environment around them, esthetic attributes affect the evaluation of
brand prestige. Further, feeling of escape from routine daily lives im-
proves the quality of life (Allison et al., 2010), which leads to perceived
prestige toward a brand (Hwang and Han, 2016a). Therefore, the ex-
perience will positively affect perceived brand prestige and, thus, the
following hypotheses are posited.
H1. Experience has a positive influence on brand prestige among
grocerant customers.
H1-1. Education experience has a positive influence on brand prestige
among grocerant customers.
H1-2. Entertainment experience has a positive influence on brand
prestige among grocerant customers.
H1-3. Esthetics experience has a positive influence on brand prestige
among grocerant customers.
H1-4. Escapist experience has a positive influence on brand prestige
among grocerant customers.
3.2. Brand prestige and value
According to the cue utilization theory, customers perceive the
value of a brand from an array of cues (Richardson et al., 1994);
Richardson et al. (1994) claimed that, for grocery items, extrinsic cues,
like brand name, are stronger than intrinsic cues, like real differences in
ingredients, in forming the product value. When customers view a
brand as prestigious, a brand identification is more likely to be formed,
which will influence the perceived product value. Hence, the level of
prestige that customers perceive affects customer perception of the
product value (So et al., 2017). Baek et al. (2010) stated that prestigious
brands convey cue signals to customers, such as the social benefit cue
and quality cue, which leads to an enhanced perception of customer
value.
While the prestige that a brand holds positively influences custo-
mers’ perceived value, the effect that a specific value receives may vary.
For example, Baek et al. (2010) stated that brand prestige positively
influences the hedonic and social values that customers perceive, be-
cause a prestigious brand is considered to enhance customers’ social
status and wealth. To the contrary, in the Yang and Mattila (2016)
study, grocerant customers who shop for upscale items, such as high
quality, fresh, and varied groceries and foods, perceived utilitarian,
hedonic, and financial value, while social value was not significant.
Because consumers purchase luxury brands in pursuit of high quality
exchanged for high cost, customers perceive utilitarian and financial
values from prestigious brands (Wiedmann et al., 2009). This study
selected four values based on the Yang and Mattila (2016) grocery
context study. Hence, the following hypotheses are proposed:
H2. Brand prestige has a positive influence on consumer perceived
value among grocerant customers.
H2-1. Brand prestige has a positive influence on utilitarian value
among grocerant customers.
H2-2. Brand prestige has a positive influence on hedonic value among
grocerant customers.
H2-3. Brand prestige has a positive influence on symbolic value among
grocerant customers.
H2-4. Brand prestige has a positive influence on financial value among
grocerant customers.
3.3. Value and loyalty
Prior research has identified perceived value as a major determinant
of customer loyalty. If customers encounter experiences, when they are
more familiar with the product or brand, such enhanced familiarity
improves customer knowledge about the brand, and the customers tend
to purchase more of the brand (Hwang and Hyun, 2012). Previous
studies verified a positive effect of customer’s perceived value on loy-
alty, including WOM (Grisaffe and Kumar, 1998; Pura, 2005), purchase
intention (Chang and Wildt, 1994; Pura, 2005), and willingness to pay a
price premium (Homburg et al., 2005; Pura, 2005). Sirdeshmukh et al.
(2002) claimed that customer value regulates “behavioral intentions of
loyalty toward the service provider as long as the relational exchanges
provide superior value” (p. 21).
The previous literature also supports the idea that each sub-di-
mension of value affects loyalty. In a study of luxury fashion brands by
Kim et al. (2010), all dimensions of customer value (social, utilitarian,
emotional, and financial value) affect brand loyalty. Wang et al. (2004)
found a significant effect of customer value (functional, social, emo-
tional, and perceived sacrifices) on brand loyalty through customer
satisfaction. Pura (2005) also showed that monetary value, emotional
value, and social value affect loyalty. Thus, all the customer value di-
mensions are linked to loyalty.
H3. Consumer perceived value has a positive influence on loyalty
among grocerant customers.
H3-1. Customer perceived utilitarian value has a positive influence on
loyalty among grocerant customers.
H3-2. Customer perceived hedonic value has a positive influence on
loyalty among grocerant customers.
H3-3. Customer perceived social value has a positive influence on
loyalty among grocerant customers.
H3-4. Customer perceived financial value has a positive influence on
loyalty among grocerant customers.
3.4. Proposed model
The proposed theoretical framework is shown in Fig. 1. The model
encompasses such concepts as experience (education, entertainment,
esthetics, and escapist), brand prestige, customer perceived value
(functional, hedonic, social, and financial), and loyalty. The hypotheses
proposed for the variables are included in the model.
4. Methodology
4.1. Survey instrument
A survey was used as the research instrument of the study. A draft of
the survey was developed based on the previous literature and modified
to fit the grocerant context. A survey was designed to test the effect of
experiences in grocerants on brand prestige, perceived value, and cus-
tomer loyalty. The draft survey was then reviewed by experts, com-
prising three faculty members in food service management and five

172
S. Kim et al.
Fig. 1. Proposed research framework.
managers in grocerants. A pilot study was conducted with thirty cus-
tomers in grocerants, to check the clarity and relevance of the items.
Slight modifications were made to some items, which removed ambi-
guity and thus improved the clarity of the items.
The introduction of the survey provided a brief description and
some examples of grocerants. A screening question was posed to ensure
the inclusion of participants who visited grocerants in the last six
months prior to the survey. The survey consisted of two parts. Part 1 of
the survey asked the respondents to assess the individual’s experiences,
perceived brand prestige, perceived value, and loyalty toward the
grocerant he/she visited. Grocerant experience, adapted from Hwang
and Han (2016a), was measured using twelve items, representing
education, entertainment, esthetics, and escapist experience. Brand
prestige was adapted from Baek et al. (2010) and measured with three
items. Perceived value contained eleven items, to assess the four di-
mensions (functional, hedonic, social, and financial) of perceived value,
based on the work of Yang and Mattila (2016). Lastly, the loyalty
construct comprised three items, adapted from Han and Ryu (2009). All
measures employed a five-point Likert type scale (1=strongly disagree,
5= strongly agree).
Part 2 asked about respondents’ demographics, including gender,
age, education, marital status, occupation, household monthly income,
and number of family members. The survey was approved by the
Institutional Review Board of the University.
4.2. Sampling and data collection
A mall-intercept survey was conducted at grocerants in South Korea.
The sample of this study consisted of customers who visited grocerants.
The researchers of the study, three graduate students in the hospitality
management major, trained for the survey and conducted an intercept
survey at major grocerants in Korea. Four grocerants in Korea were
selected, including Eataly, PK Market, Olive Market, and Shinsegae
(SSG) food court, for the survey sites. Participants were recruited at the
grocerants, from those who exited the grocerants after shopping. The
survey was conducted on three weekdays and two weekend days at
different times of the day over a five-week period from November to
December, 2017. The data were collected through a self-administered
survey. The participants were approached by the researchers and sur-
veyed with the questionnaire when they agreed to the study. The par-
ticipants in the survey totaled 367, while eight responses were in-
complete and thus deleted. Finally, 359 usable responses were entered
for data analysis.
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International Journal of Hospitality Management 77 (2019) 169–177
5. Results
5.1. Demographics of respondents
The demographic profiles of the participants are examined. Among
the 359 usable responses, 64.5% were females and 35.5% were males.
In terms of age, 22.1% of the respondents were 20–29 years old, 49.2%
were 30–39 years old, 16.8% were 40–49 years old, and 8.4% were 50
or older. Regarding educational attainment, 66.9% had completed
college. Household income was almost evenly distributed. Among the
participants, about 62.0% were married, and 48.0% were singles. In
terms of education level, about 66.9% of the participants had bachelor’s
degree, followed by graduate-degree holders (17.6%), high school
graduates or less (8.2%), and 2-year/some college graduates (7.4%).
5.2. Measurement model
Table 1 shows the results of confirmatory factor analysis. Con-
vergent validity examines how much common variance is shared be-
tween the items and the latent construct (Boley et al., 2018). To es-
tablish convergent validity, factor coefficients of variables should be
significant and greater than the minimum threshold value of 0.5 (Hair
et al., 2010). In this study, several items were deleted, because the
standardized factor loading of three items, each item from entertain-
ment and esthetics experience and hedonic value, were less than the
minimum threshold value of 0.5 (Hair et al., 2010). Other than these
items, all standardized factor loadings ranged from 0.550 to 0.908.
To assess a model fit of the measurement model, several fit indices
were applied; the application results were as follows:
χ(279)2 = 542.929, χ2/df = 1.946, GFI = 0.900, CFI = 0.953,
NFI = 0.909, RMSEA = 0.051. The model fit was satisfactory. All
loadings (standardized) were high and significant (p < .01). Thus,
unidimensionality of the measures was evident. The measurement
model was also checked for composite reliability (CR). All the CR in-
dices were above the threshold limit of 0.60 (Fornell and Larcker,
1981). The average variance extracted (AVE) for each construct was
calculated to test convergent validity. All calculated AVE values were
between 0.536 and 0.800. These results were evidence of the con-
vergent validity of the measures (Anderson and Gerbing, 1988). The
Cronbach’s α in each construct ranged from 0.610 to 0.893, which sa-
tisfied the minimum threshold value of 0.6 (Nunnally, 1978).
Table 2 reports mean, squared correlations and AVE among all
constructs included in the study model. To evaluate the discriminant
validity, the AVE of each latent construct of the proposed model was
compared with the squared correlation coefficient (Fornell and Larcker,
1981). All diagonal values (AVE) exceeded the squared correlation of
S. Kim et al. International Journal of Hospitality Management 77 (2019) 169–177

Table 1
Confirmatory factor analysis for measurement items.
Constructs Items Factor loading t-value Cronbach’s α C.R.a AVEb

Education Education 1 .694 – .861 .886 .724

Education 2 .901 22.757
Education 3 .897 15.316
Entertainment Entertainment 1 .668 – .610 .698 .536
Entertainment 2 .657 10.484
Esthetics Esthetics 1 .824 – .786 .853 .744
Esthetics 2 .786 14.256
Escapist Escapist 1 .813 – .852 .836 .630
Escapist 2 .825 16.253
Escapist 3 .798 16.022
Brand prestige Brand prestige 1 .656 – .765 .831 .626
Brand prestige 2 .889 12.221
Brand prestige 3 .674 10.780
Functional value Functional value 1 .643 – .694 .791 .563
Functional value 2 .814 10.956
Functional value 3 .569 8.830
Hedonic value Hedonic value 1 .576 – .661 .706 .556
Hedonic value 2 .868 9.896
Social value Social value 1 .771 – .884 .884 .719
Social value 2 .912 18.282
Social value 3 .868 17.496
Financial value Financial value 1 .830 – .893 .923 .800
Financial value 2 .874 19.777
Financial value 3 .875 19.803
Loyalty Loyalty 1 .867 – .884 .920 .793
Loyalty 2 .821 18.689
Loyalty 3 .857 19.784
Model fit statistics χ(279)2 = 542.929, χ2/df = 1.946, GFI = .900,
CFI = .953, NFI = .909, RMSEA = .051

Note 1 All factor loadings were significant at the 0.001 level.

Note 2 Chi-Square (χ2); df (Degrees of Freedom); Goodness of Fit Index (GFI); Comparative Fit Index (CFI); Normed Fit Index (NFI); Root Mean Square Error
Approximation (RMSEA).
a
Composite Reliability.
b
Average Variance Extracted.

coefficients between all pairs of constructs, thus indicating adequate
discriminant validity.
5.3. Structural model
A statistical analysis of the collected data was conducted using SPSS
24.0 for Windows and AMOS 24.0. The proposed model and hypotheses
were tested by structural equation modeling (SEM), because it provides
an appropriate analytical method for examining the relationships
among variables in multivariate structures (Anderson and Gerbing,
1988). The model fit for the proposed model was in an acceptable
range. The model fit indices were as follows: χ2(306) = 839.006, χ2/
df = 2.742, GFI = 0.843, CFI = 0.905, NFI = 0.859, RMSEA = 0.070.
As indicated in Table 3, all the hypothesized paths were significant
except for three. Brand prestige was significantly affected by en-
tertainment experience (β = 0.500, p < 0.05) and escapist experience
(β = 0.271, p < 0.01), supporting H1-2 and H1-4, while H1-1 and H1-
3 were not empirically supported. Next, brand prestige significantly
affected all experimental values (functional value/β = 0.767,
p < 0.001; hedonic value/ β = 0.812, p < 0.001; social value/
β = 0.658, p < 0.001; financial value/ β = 0.783, p < 0.001).
Therefore, H2-1, H2-2, H2-3, and H2-4 were supported. Finally, loyalty
was positively affected by the three factors of experimental value,
comprising functional value (β = 0.162, p < 0.05), hedonic value
(β = 0.300, p < 0.001), and financial value (β = 0.417, p < 0.001),
and supporting H3-1, H3-2, and H3-4. However, social value did not
significantly affect loyalty (β=-0.086, p > 0.05). The results from the
structural model with the parameter path coefficients are described in
Fig. 2.

Table 2
Mean, Squared Correlations, and AVE.
Constructs 1 2 3 4 5 6 7 8 9 10

a
1. Education .724
2. Entertainment .569 (.32) .536a
3. Esthetics .596 (.36) .569 (.32) .744a
4. Escapist .491 (.16) .469 (.22) .399 (.24) .630a
5. Brand prestige .487 (.17) .435 (.19) .412 (.24) .319 (.10) .626a
6. Functional value .301 (.17) .433 (.19) .409 (.30) .330 (.11) .455 (.21) .563a
7. Hedonic value .442 (.16) .356 (.13) .401 (.44) .479 (.23) .320 (.10) .399 (.16) .556a
8. Social value .350 (.08) .321 (.10) .279 (.35) .612 (.38) .313 (.10) .357 (.13) .518 (.27) .719a
9. Financial value .393 (.17) .424 (.18) .413 (.39) .458 (.21) .434 (.19) .541 (.29) .555 (.31) .548 (.30) .800a
10. Loyalty .454 (.23) .470 (.22) .477 (.45) .380 (.14) .446 (.20) .451 (.20) .467 (.22) .351 (.12) .591 (.35) .793a

Note 1. Squared correlations between constructs are in parentheses.

a
AVE (Average Variance Extracted).

174
S. Kim et al. International Journal of Hospitality Management 77 (2019) 169–177

Table 3
Structural parameter estimates of the study model.
Hypothesized path Standardized coefficients t-value Results

H1-1: Educational experience → Brand prestige .043 .432 Not supported

H1-2: Entertainment experience → Brand prestige .500 2.013* Supported
H1-3: Esthetics experience → Brand prestige .090 .580 Not supported
H1-4: Escapist experience → Brand prestige .271 2.924** Supported
H2-1: Brand prestige → Functional value .767 7.060*** Supported
H2-1: Brand prestige → Hedonic value .812 6.479*** Supported
H2-3: Brand prestige → Social value .658 7.308*** Supported
H2-4: Brand prestige → Financial value .783 8.016 ***
Supported
H3-1: Functional value → Loyalty .162 2.019 *
Supported
H3-2: Hedonic value → Loyalty .300 3.411 ***
Supported
H3-3: Social value → Loyalty −.086 −1.451 Not supported
H3-4: Financial value → Loyalty .417 5.663*** Supported
Model fit statistics Measurement model fit: χ2(306) = 839.006, χ2/df = 2.742, GFI = 0.843, CFI = 0.905, NFI = 0.859, RMSEA = 0.070

Note 1. Chi-Square (χ2); df (Degrees of Freedom); Goodness of Fit Index (GFI); Comparative Fit Index (CFI); Normed Fit Index (NFI); Root Mean Square Error
Approximation (RMSEA).
n.s.=not significant.
* p < .05.
** p < .01.
*** p < .001.

6. Conclusion and discussion
This study was the first attempt to examine customer experience at
grocerants, based on the experience economy, which consists of mul-
tiple dimensions of experience. By investigating four realms of the ex-
perience economy (education, entertainment, esthetics, and escapist)
that customers perceive at grocerants, the study demonstrated the im-
portance of experiences for customer perception and behavioral in-
tention. This study explored the unique experiences staged in gro-
cerants and associated the experiences to brand prestige, customer
perceived value, and loyalty. The results of the study, overall, sup-
ported our hypotheses, showing positive effects of entertainment and
escapist experiences on brand prestige, while brand prestige influenced
functional, hedonic, social, and financial values. Three values (func-
tional, hedonic, and financial) also affected loyalty, while only social
value was not significant. The findings of the study provide important
theoretical and managerial implications.
This study is a theoretically novel grocerant study that sheds light
on the previous experience research by adding new findings. The most
noticeable findings are that experiences are significant in forming the
brand prestige of grocerants. However, each dimension of experience
differed in its effect. Among the four realms of experiences, the stron-
gest relation was found between entertainment and brand prestige. This
result was consistent with previous research, including the positive
effect of entertainment on brand prestige in in-flight airline services
(Ahn et al., 2015) and themed flagship brand stores (Kozinets et al.,
2002). Further, Hwang and Han (2016a) showed that all the sub-di-
mensions (entertainment, education, esthetics, escapist) of experience
affected brand prestige in the luxury cruise industry. A positive impact
of escapist experience was also found on brand prestige, which is
consistent with Hwang and Han (2016a). Such findings imply that,
when customers feel entertained by something fun at the grocerants and
escaped to get away from their routine lives, they tend to form the
prestige of the grocerant brand. In Korea, grocerants offer cooking de-
monstrations by renowned chefs using fancy equipment during the
weekend, contract with famous restaurants from all parts of the
country, and sell exotic food ingredients, cuisines, and wines, which
allure customers and provide entertainment and escapist experiences.
This study showed insignificant effects of educational and esthetics
experiences on brand prestige, which is not consistent with a previous

Fig. 2. Results of structural model and fit coefficients.

Note 1. Solid lines indicate significant paths, while dotted lines indicate non-significant paths. *p < 0.05, **
p < 0.01, ***
p < 0.001

175
S. Kim et al.
study (Hwang and Han, 2016a; Hwang and Hyun, 2012). Currently, in
Korea, few things have been developed to provide educational experi-
ences. Although Eataly Korea offers a card explaining food ingredients,
many people do not read it, because it does not attract customer at-
tention. While grocerants in Korea have staffs to answer customer in-
quiries, such experiences should be strengthened. Regarding the insig-
nificance of esthetics on brand prestige, one possible explanation is that
many grocerants in Korea do not provide impressive interiors to the
degree customers expect in upscale grocerants. The current interiors of
grocerants are quite similar to normal grocery stores with food courts.
Although grocerants try to convey upscale feeling by using dark lights
or wooden interiors, they are still not far from other normal groceries.
This study also found a positive impact of brand prestige on cus-
tomer perceived value in grocerants, which corroborates previous stu-
dies (Baek et al., 2010; Richardson et al., 1994; Chiang and Jang,
2007). As previous studies indicated, a prestigious brand forms custo-
mers’ positive functional value, hedonic value (Baek et al., 2010), social
value (Hwang and Han, 2016a; Qiu et al., 2014; Vigneron and Johnson,
1999), and financial value (Hanzee and Taghipourian, 2012).
It is interesting to note that the study showed that social value did
not influence loyalty, while other values did. Social value refers to
“perceived utility of an alternative resulting from its image and sym-
bolism” (Smith and Colgate, 2007, p. 8). While many previous studies
showed that social value significantly affects loyalty (Kim et al., 2010;
Hwang and Han, 2016a), Yang and Mattila (2016) revealed insignif-
icant relationships of symbolic value and purchase intention, while
other luxury value (functional, hedonic, and financial value) led to
purchase intention. Thus, the finding of this study regarding social
value is in line with Yang and Mattila (2016). Yang and Mattila (2016)
suggested that the symbolic value that customers perceive in groceries
does not always result in purchase intention. Their explanation was that
symbolic value, in many cases, was found to be a strong predictor of
luxury brand items. Upscale grocerants, however, are more premium
than the luxury segment. Grocerants in Korea still lack a strong brand
power, which results in a lack of symbolism.
This study also offers practical implications for grocerant managers
and operators. This study revealed that entertainment and escapist
experiences are important for grocerant customers in forming brand
prestige. It is suggested that grocerants put efforts into developing at-
tractive entertainment programs. Some grocerant brands have their
own entertainment programs. For example, FICO Eataly World provides
various entertaining elements through the entire shopping process. It
turned the shopping cart into a bicycle with a shopping basket and
established a food ingredient exhibit hall and farms next to the grocery
store. Wholefoods also offers various events for customers, like
“random acts of chocolate,” which distributed 100 bars of 365 choco-
lates throughout the store, or decorating Valentine’s Day cards
(Wholefoods, n.d.).
To let customers feel escapist experiences at grocerants, thematic or
exotic experiences should be developed, such as throwing an event of a
strawberry buffet, which is popular among hotel dining in Korea, or
opening a cooking class by a famous chef with exotic ethnic recipes, like
African food. In addition, collaborating with other industries can aug-
ment escapist experiences, such as collaborating with a flower shop,
furniture showroom, and restaurants. By combining bakeries, restau-
rants, and cafes and offering exotic themes, grocerants can make cus-
tomers feel an escape from their routine and dull lives.
Further, this study revealed that most grocerant customers are
millennials. While developing experience programs appealing to gro-
cerant customers, the experiences that millennials seek for grocerants
should be considered. Thus, the expectations and consumption patterns
of millennials can be examined by managers and applied in developing
experience programs.
This study found that functional, hedonic, and financial values are
significant predictors leading to loyalty. Management invest effort in
improving these values for grocerants. Customer perceived value is
176
International Journal of Hospitality Management 77 (2019) 169–177
formed by their experiences. Because customers expect a good quality
of various food ingredients and dishes, grocerants should prepare var-
ious categories of food that reflect customer needs. Additionally, emo-
tional value can be affected by many factors, such as service, interior,
and so forth; superior service and upscale interiors are suggested in
building a comfortable and cozy environment for shopping. Further,
because customers are more sensitive to the transparency of food,
providing clean and transparent food can improve value for the money.
This study still has limitations. First, the data for the study were
collected in Korea. Therefore, the findings of the study may not be
generalized to all grocerants in other countries. The themes or trends of
grocerants may differ country by country. Grocerants in the US or
European countries have been implemented for a longer period, so the
development stage may be different. Future study is suggested in other
countries, and comparisons between countries may offer useful im-
plications for the respective countries. While the grocerant concept is
more popular in the US and Europe, comparisons between countries
may also reveal, whether customers form different perception ac-
cording to the length of their experience with grocerants. Second,
grocerants in the US were first developed as a low-end concept and then
moved upscale, while in Korea grocerants started as upscale and the
trend is continuing. Reflecting this difference, comparisons between the
segments of grocerants is suggested, which may reveal the experiences
customers seek from different segments of grocerants. Third, while the
number of samples in this research exceeded the minimum sample size
suggested by Hair et al. (2010), the size is still not sufficient. Increasing
sample size is recommended for future research. Fourth, future research
may consider other social-psychological factors (e.g., lifestyle, in-
dividual preferences) and demographic factors (e.g., age, gender, edu-
cation level, income level). In that regard, research on grocerants and
customer experience can flourish.
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