Examining Critical Drivers of Customer Satisfaction and Retention in Contemporary Retail Stores in Padang, Indonesia

The rapid expansion of modern retail formats has reshaped competition in Indonesia, compelling retailers to strengthen service performance and refine their marketing strategies to maintain customer engagement. Within this context, the present study examines how key retail attributes shape customer satisfaction and, subsequently, customer retention. A survey of 230 shoppers at Budiman Swalayan in Padang, Indonesia, was analyzed using SEM-PLS. The findings reveal that service quality, price fairness, store atmosphere, and membership cards significantly enhance customer satisfaction. Furthermore, price fairness, store atmosphere, and satisfaction have a positive influence on customer retention, whereas service quality and membership cards do not directly predict retention. The analysis also reveals that customer satisfaction serves as a mediating mechanism, linking all four predictors to customer retention.