International Journal of Economics, Commerce and Management United Kingdom Vol. VI, Issue 9, September 2018 Licensed under Creative Common Page 29 http://ijecm.co.uk/ ISSN 2348 0386 RETAIL QUALITY MODEL CONSTRUCTION FOR CUSTOMER SATISFACTION AND LOYALTY: A STUDY OF RETAIL BUSINESSES IN BALI INDONESIA Eky Cules Magister Management, Postgraduate Program, Mahasaraswati University Denpasar, Bali, Indonesia Anak Agung Putu Agung Lecturer of Postgraduate Program, Mahasaraswati University Denpasar, Bali, Indonesia Gusti Agung Teja Kusuma Lecturer of Postgraduate Program, Mahasaraswati University Denpasar, Bali, Indonesia agungteja@unmas.ac.id I Nengah Sudja Lecturer of Postgraduate Program, Mahasaraswati University Denpasar, Bali, Indonesia Abstract Retail companies all this time have conducted traditional marketing activities which then now start to get unrivalled. If they do not want to make any changes, they will be replaced by modern retail businesses, including retail business in the field of textile. This research aims to measure effects of textile retail business on satisfaction to improve customer loyalty. This research was conducted in textile business in Denpasar Bali Indonesia with type of quantitative research with Structural Equation Modelling (SEM) as the test tool, and Partial Least Square (PLS) as the research approach. This research found out that retail service quality and retail product quality as two essential variables determining the retail quality. These findings also indicate that there is no direct significant effect of retail service quality on customer loyalty. Retail service quality will be able to improve customer loyalty if the customers significantly obtain satisfaction. While, retail product quality is significantly able to affect directly on customer satisfaction and loyalty. This research implication in the context of medium economic segment, the product quality is