The Impact of Corporate Social Responsibility on Customer Loyalty in Sri Lankan Supermarkets

Purpose - With worldwide consideration towards in succeeding business sustainability, the necessity of prioritizing the concept of CSR was emerged. Since the phenomenon of CSR captures broader scope organizations frequently strive to gain more understandability of this concept while providing benefits of CSR to their stakeholders. The purpose of this paper is to examine how Corporate Social Responsibility (CSR) awareness and perceived CSR value affect customer loyalty of two dominant supermarket players in a high-density urban commercial hub in Sri Lanka. Social exchange theory is implemented as the theoretical framework of this study. Design/methodology/approach – Adopting an explanatory research design, cross-sectional data from 108 respondents were collected in 2019 using multi-stage non-probability sampling method incorporating purposive sampling followed by quota sampling. Responses were gathered using a self-administered survey questionnaire. To test the formulated hypotheses based on independent and dependent variables, multiple linear regression analysis was performed with the aid of SPSS 25.0 version. Findings – The findings reveal that the level of CSR awareness has a positive, yet modest and significant impact on supermarket customer loyalty. Whereas, perceived value of CSR indicates a positive, stronger and significant effect on customer loyalty in the supermarket sector. Consequently, perceived value of CSR exerts a stronger positive influence on supermarket customer loyalty rather than CSR awareness.Implications - This study contributes to the literature by deconstructing the CSR-loyalty nexus. Consequently, the conclusions made from the results will be helpful to managers and employees in modern retail stores to determine the effectiveness of currently implemented CSR projects towards customers and what components should be prioritized in their CSR efforts to make customers loyal. Further it will provide useful insights to the managers in supermarkets in developing effective CSR strategy as enhancing customer loyalty.Keywords: Corporate social responsibility (CSR), CSR awareness, Customer loyalty, Perceived value, Supermarkets