The Effect of Price and Store Atmosphere on Customer Loyalty

Abstract

The rapid growth of coffee shops in Indonesia has intensified competition, making customer loyalty increasingly important for business sustainability. Although price and store atmosphere are widely recognized as potential determinants of customer loyalty, their relative contributions may differ across coffee shop contexts. This study examined the effects of price and store atmosphere on customer loyalty at Fuels Coffee in Bandung, Indonesia. Using a quantitative explanatory design, data were collected through a questionnaire administered to 97 customers selected using purposive sampling, with eligibility restricted to those who had made at least two purchases. The data were analyzed using multiple linear regression. The results revealed that price had a positive and statistically significant effect on customer loyalty (B = 0.475, p = .001), whereas store atmosphere showed no statistically significant effect (B = 0.197, p = .103). The overall regression model was statistically significant (p = .001) and explained 36.7% of the variance in customer loyalty (adjusted R² = .367). These findings demonstrate that price, rather than store atmosphere, was the significant predictor of customer loyalty within the examined model. The study provides empirical evidence that customers’ perceptions of price may play a more prominent role in fostering loyalty in this coffee shop context, highlighting the importance of maintaining pricing strategies that customers perceive as appropriate and commensurate with the value they receive.