The Relationship between Corporate Responsibility and Brand Loyalty in Retailing: The Mediating Role of Trust

After more than 30 years of study, the impact of CSR policies on economic performance remains uncertain, undermining efforts to define CSR consistently and reliably to support managerial decision making.
Our paper offers a different approach to the research on the relationship between CSR performance and economic performance. We apply this approach to the socially labeled products sold by Italian retail chains. As a matter of fact, retail chains play a critical role in CSR-oriented policies (e.g., global supply chain management, consumer safety, environmental protection, waste reduction). Social labels are used to assure consumers that products are obtained according to official standards and under third-party control. They therefore generate trust among the actors involved.
We developed a model according to which retailers with high CSR performance acquire trust among a wide range of stakeholders, including consumers. In turn, trust has a tangible effect on brand loyalty. In order to test the model, we studied Fair Trade products sold by large Italian retail chains with their own private label. Results of our structural model are consistent with the prediction that CSR generates trust. Consumers who perceive a retailer as socially oriented demonstrated more trust in the retailer, Fair Trade in general, and private-label Fair Trade products. This trust translates into an intention to purchase the product (brand loyalty).