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Specialty Stores Can Charge More, Study Finds

Specialty Stores Can Charge More, Study Finds . / Credit: Specialty Store Image via Shutterstock

Specialty stores don't need to lower prices to compete with their bog-box competition, new research shows.

Researchers at the University of Buffalo found consumers not concerned about higher prices when shopping at specialty stores, and they are also more likely to purchase multiple items when there.

As part of the study, researchers analyzed data from 225 households, comparing candy sales in supermarkets to sales in specialized confectionary stores. They found that shoppers preferred buying premium items, like boxed chocolates, from the specialty stores and were not averse to paying higher prices for them in comparison to similar items at supermarkets.

In addition, the results showed that consumers were more likely to buy additional premium candies when at confectionary stores, compared to at the supermarket where they were less likely make any related purchases.

The study also discovered that promotions featuring sale prices at specialty stores don't have as great an effect on increasing sales as similar lower-price promotions at the larger markets. Instead, consumers responded more favorably to promotions featuring seasonal or holiday themes, such as Valentine's Day or Easter items.

The study's authors — assistant professor Ram Bezawada, professor Minakshi Trivedi and graduate students Ashish Kumar and and Karthik Sridhar — believe that specialty retailers can benefit from the study by adjusting their sales strategy to focus on premium selection, cross-category items and holiday promotions, rather than price cuts, to increase sales.

Follow Chad Brooks on Twitter @cbrooks76 or BusinessNewsDaily @BNDarticles. We're also on Facebook & Google+.

Chad  Brooks
Chad Brooks

Chad Brooks is a Chicago-based freelance writer who has nearly 15 years experience in the media business. A graduate of Indiana University, he spent nearly a decade as a staff reporter for the Daily Herald in suburban Chicago, covering a wide array of topics including, local and state government, crime, the legal system and education. Following his years at the newspaper Chad worked in public relations, helping promote small businesses throughout the U.S. Follow him on Twitter.

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