Preferance for discounters? How transaction costs influence the choice of a point of purchase

Discounters are Germans ' favourite food stores - despite many alternatives. Why are discounters so popular? A theoretic overview - focusing on transaction costs - starts by identifying criteria which influence the choice of where people shop. Food items, as fast moving consumer goods (FMCG), are in regular demand and, transaction costs aside, consumers probably attach considerable value to the image of a point of purchase. The study at hand shows that, in comparison to other types of shops, German consumers attribute a negative image to discounters. Yet, where transaction costs are concerned, the discounter is chosen as the advantageous main point of purchase. The empirical analysis confirms, on the one hand, that out-of-pocket costs, in terms of the distance from one's place of residence, are lower at the supermarket, the consumer market or the discounter. On the other, people who shop at discounters appreciate affordable prices and particularly welcome the opportunity to do their shopping quickly, which means that they perceive transaction costs as being lower than in other types of food stores.