Company Profile: Coop Switzerland

A few months ago I researched and wrote a company profile on Swiss supermarket chain Coop for one of my magazine projects. In the end, we decided not to use the Coop piece; so here it is (updated and annotated!). Coop is an interesting retailer: like its competitor Migros, the company has very strong position in the Swiss food market – basically, there is Migros (market leader) and Coop and that’s pretty much it as far as supermarket chains are concerned. At least in German Switzerland.

During my article research I noticed how closely  Coop’s brand line-up reflects current food trends: over the past few years, the company has added a number of organic, regional and vegetarian own label brands. And this June, Coop signed a distribution agreement with Berlin-based vegan supermarket chain Veganz. Another interesting project is Coop’s new market place Siroop.ch, the first online store in Switzerland to offer products from local, regional and international manufacturers on one retail platform. For more information on Siroop, scroll down the article!

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Introduction

Ok, let’s begin with some basic  facts and figures! Retail group Coop is the second-largest supermarket chain in Switzerland, after market leader Migros. Like Migros, Coop is a retail group with a complicated corporate structure (which seems to be usual for cooperatives!). And like Migros,  Coop owns major businesses across a number of industries and service sectors in Switzerland. Although the core business of the Coop group is food retail (the company operates various stores formats, including department stores (Coop City), different sizes of supermarkets (Coop) and convenience stores (Coop Pronto/Coop-to-go)), Coop also owns Transgourmet, which is the second-biggest wholesale, catering, commercial and cash & carry retailer in Europe.

Through Transgourmet, Coop has a significant international presence. The group’s actual food supermarkets, however, are all located in Switzerland. Other regional Coop retail chains includes gastro chain Coop Restaurant, pharmacy chain Coop Vitality, DIY hyperstores Coop Bau + Hobby. Subsidiary Coop Mineraloel AG operates a network of petrol stations, Coop Depositenkassen offers banking and investment opportunities and ITS Coop Travel is a chain of travel agencies.

Other retailers belonging to the Coop group are electronics store chain Interdiscount, light fixtures speciality store chain Lumimart, perfumery chain Import Parfumerie and jewellery store chain Christ Uhren & Schmuck. Coop is also the master franchise holder for The Body Shop Switzerland and for the Swiss subsidiary of the international Marché group of restaurants.

If you travel within continental Europe, you’ll have seen the Marché restaurants in airports, train stations and motorway service areas. Actually, I have just looked up Marché online: according to their international website, there are Marché restaurants in Germany, Austria, Switzerland, Hungary, Croatia, Norway, Slovenia, Canada, Indonesia and Singapore. Marché International also runs the Cindy’s Diner chain, the Marché Mövenpick restaurants and the Palavrion Urban Grill restaurants. Who knew.

 Company history

But now back to Coop! Today’s Coop group can trace back its origins all the way to 1890 and the foundation of Verband Schweizerischer Konsumvereine (VSK), an association of three Swiss consumer cooperatives.  Over the following 50 years, the cooperative association became more and more complicated as new businesses and regional divisions joined the Verband and others divisions were merged and/or renamed. In 1969, the association took a decisive step: the more than 400 small, local cooperatives operating as part of the VSK were consolidated and the entire structure was renamed Coop Schweiz.

Over the next three decades, Coop continued to consolidate its member cooperatives into larger entities (from 67 cooperatives in 1979 to 14 cooperatives in 2001), streamlining its complicated corporate structure, distribution infrastructures and decision-making processes. In the 1990s the group began to purchase shares in other businesses, acquiring furniture chain Toptip and electronics retailer Interdiscount and in general diversifying its business interests. In 2000, the company opened its first pharmacy (Coop Vitality). In 2001 the second big consolidation step followed: 14 regional cooperatives and the Coop Schweiz Holding were consolidated into one single group, Coop.  With a new corporate logo, further retail acquisitions and a whole range of new food brands Coop continued to expand its business in Switzerland and internationally.

In 2011 Coop took over the Transgourmet joint venture which the group had established together with German Rewe group back in 2005. And in 2014, the company acquired the Swiss division of the European Marché restaurant group. Over the last few years, Coop has also been experimenting with new retail formats: in 2015, the company launched a new retail format, Coop-to-go, smaller city supermarkets with a strong focus on convenience and fresh foods. Coop-to-go stores offer in-store microwaves that customers can use to heat up the chilled or frozen meal they have just purchased. Convenient indeed!

And all of this engagement has been paying off: in 2015, group turnover (including wholesale and retail) reached 26.93 billion CHF. The majority of this turnover, 19.25 billion CHF, came from sales in the domestic market, 6.64 billion CHF from international activities. There were 2213 stores  across all retail chains (including non-food divisions) last year.

Like many Swiss companies, Coop retail business was affected by last year’s de-coupling of Euro and CHF. In January 2015 the Swiss National Bank announced that the fixed exchange rate of Euro and Swiss Franc – previously pegged at 1.20 CHF for 1 Euro – would be abolished. This fiscal decision has influenced the entire Swiss market economy and most of Switzerland’s retailers and companies are still dealing with the after-effects of last year’s structural changes.

Another consequence of the Euro/CHF de-coupling was an dramatic increase in Swiss/German cross-border shopping. This is already a serious threat to Swiss retailers operating stores close to the German border. A brief note of explanation: Switzerland shares a country border with Germany. Since Germany has very low prices for food and cosmetics (thanks to the country’s strong supermarket and drugstore chains)  Swiss consumers living near the border tend to do the bulk of their food shopping in Germany. The French do this too, by the way.

As a result of the financial  upheaval, the 856 Coop supermarkets only registered a 0.7% increase last year, reaching a total of 10.5 billion CHF. Still, the Coop group is doing well and the successful wholesale/cash & carry business has helped to cushion the worst effects of the dip in retail sales.

Own label activities

Coop has 18 own label brands. The majority of Coop’s food brands were launched over the last 15 years except the two organic brands Naturaline (eco and fair-trade clothes) and Naturaplan (food) which were both introduced in 1993.

Many of Coop’s more recent brands reflect current food trends: convenience brand Betti Bossi (the Swiss market leader in the fresh convenience sector) and the calorie-reduced Lifestyle range were introduced in 2002, discount brand Prix Garantie and the premium delicatessen brand Fine Food followed in 2005, and Free From and Delicorn (meat substitutes) in 2006. Pro Montagna (products manufactured in the Swiss mountain regions) and the Presidio Slow Food range were launched in 2007 and Primagusto (premium fresh produce) joined the line-up in 2010.

Another interesting food brand is Miini Region (Swiss German for “my region”! See picture below!) which offers local food and delicatessen brands. And in June 2016, Coop started a cooperation with German vegan supermarket chain Veganz: starting with 190 Coop supermarkets, the Swiss retailer is now selling around 40 of Veganz own label food products.

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Cosmetics

Like its competitor Migros, the Coop supermarkets are one of the key retail channels for C&T: Switzerland does not have strong drugstore sector (like Germany) or parapharmacies (like France) so consumers often buy their cosmetics in Migros or Coop supermarkets because it is convenient.

Coop’s C&T portfolio is primarily sold under its food umbrella brands: Prix Garantie covers basic personal care products like hair care, body care and face care; the small range of C&T products sold under the Coop Qualité & Prix label is slightly more expensive and the organic own label range is retailed under the Naturaline banner (Naturaline Natural Cosmetics). There is also Wel!, a range of wellness-inspired skin and body care (see pic below).

Coop Suisse (4)

Coop’s personal care products cover all major products categories with the exception of specialised sectors such as colour cosmetics. In addition to the own label beauty products, Coop sells all the usual German and European C&T labels, including L’Oréal’s Garnier, L’Oréal Paris, Fructis and Maybelline brands, Schwarzkopf’s Diadermine and Fa, Beiersdorf’s Nivea and Labello, organic brands Weleda and Lavera, P&G’s Pantene, Olaz and Herbal Essences, Colgate Palmolive, Unilever’s  Dove, J&J’s Bebe, Reckitt Benckiser’s Clearasil and so on.

With the exception of the organic cosmetics range Naturaline Natural Cosmetics, Coop’s own label beauty products are positioned (and perceived) as a cheap, non-frills alternative to the retail brands; without much focus on brand identity or attractive packaging. The exception is organic cosmetics Naturaline Natural Cosmetics range which offers a segmented line-up of attractively packaged, certified organic beauty products which includes 14 face care products, 17 body care products and 5 hair care products.

Coop Suisse (5)

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Online activities

Coop started its e-commerce activities quite early on. The first online store, Galerie du Vin, was launched in 2000. Over the next year, other online shopping sites followed and in 2010, the e-commerce activities of the Coop group were consolidated into one store portal: Coop@Home. All major Coop chains have their own online stores, including Import Parfumerie, Betti Bossi, Inter Discount and The Body Show Switzerland. And the diversion into online retail is paying off: in 2015, Coop’s retail e-commerce revenue grew 13.7% to 1.2 million CHF.

However, one of the most interesting new online projects is Siroop.ch which was launched by Coop and Swiss telecoms group Swisscom in late 2015. Siroop’s product categories include beauty & personal care, baby products & toys, electronic, digital gadgets & media, homeware, DIY & garden supplies and accessories & fashion. And although the brand line-up includes all the usual international retail labels (Boss, Clarins, Nespresso, HP, Lego, Puma, Acer and so on), the webstore does indeed offer regional Swiss product and brands.

The majority of the 150-odd retailers currently listed on siroop.ch (as of August 2016) are from Switzerland and around half of these are regional and local stores. For many small stores and regional labels Siroop’s infrastructure and fast delivery service is a convenient way of reaching out to more customers across Switzerland. According to Coop, around half of the retailers on Siroop.ch are only active in one location, usually their home city. I like this idea of a platform designed especially for regional and local retailers!

Siroop also delivers to around 100 pick-up points in German Switzerland. Many of these are located within Coop retail chains (Coop supermarkets, Interdiscount perfumeries or Coop Pronto stores). Customers can also drop off their parcel returns at any of these pick-up points and it doesn’t even need to be the same store where you’ve picked up your parcel.  How is that for flexibility!

 

 

 

 

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