Nudging consumer behaviour in retail stores: a case study on breakfast cereals

TY - ABST

T1 - Nudging consumer behaviour in retail stores

T2 - LOM Conference 2016

AU - Adam, Abdulfatah

PY - 2016/5/19

Y1 - 2016/5/19

N2 - The rise of obesity and overweight is a global health challenge. Obesity is a complex phenomenon that can be attributed to multiple factors. One of these factors is the food environment, and particularly the food retailers. This study is part of a big project that aims to evaluate cost-effectiveness of alternative interventions in retail store settings. In cooperation with a supermarket chain in Denmark, we manipulated food locations inside the store so that relatively low energy dense products were placed favorable shelf locations. The underlying theory for the experiment was the behavioral approach (so-called “nudging”) theory popularized by Thaler and Sunstein (2008). Five stores were chosen for the intervention while five comparable stores acted as controls. Results based on total of 28 breakfast cereals showed a decline in calories at intervention stores relative to both pre-intervention period and control stores. However, this is achieved at the expense of somewhat lowered revenue from sales. There are several implications of this study. First, supermarkets may not have an incentive to change current marketing practices as their top priority is their own welfare. Secondly, while the reduction in revenues directly affects only the retail sector, the benefits of calorie reduction are a welfare gain to society. The next question is then whether society should compensate supermarkets for giving more focus on healthy foods. But before any general welfare recommendations are made, the cost-effectiveness of current shelf space management intervention strategy must be compared to other possible alternative strategies.

AB - The rise of obesity and overweight is a global health challenge. Obesity is a complex phenomenon that can be attributed to multiple factors. One of these factors is the food environment, and particularly the food retailers. This study is part of a big project that aims to evaluate cost-effectiveness of alternative interventions in retail store settings. In cooperation with a supermarket chain in Denmark, we manipulated food locations inside the store so that relatively low energy dense products were placed favorable shelf locations. The underlying theory for the experiment was the behavioral approach (so-called “nudging”) theory popularized by Thaler and Sunstein (2008). Five stores were chosen for the intervention while five comparable stores acted as controls. Results based on total of 28 breakfast cereals showed a decline in calories at intervention stores relative to both pre-intervention period and control stores. However, this is achieved at the expense of somewhat lowered revenue from sales. There are several implications of this study. First, supermarkets may not have an incentive to change current marketing practices as their top priority is their own welfare. Secondly, while the reduction in revenues directly affects only the retail sector, the benefits of calorie reduction are a welfare gain to society. The next question is then whether society should compensate supermarkets for giving more focus on healthy foods. But before any general welfare recommendations are made, the cost-effectiveness of current shelf space management intervention strategy must be compared to other possible alternative strategies.

M3 - Conference abstract in proceedings

SP - 2

BT - UCPH LOM conference 2016: Lifestyles and kinds of living – Opportunities, conditions and biology

Y2 - 18 May 2016 through 19 May 2016

ER -