Expansion pays off for Swiss Coop
acquisitions to steal market share from its rivals in 2003. Despite
a continued downturn in consumer spending, organic and ethical
products performed particularly well during the year, showing that
Swiss shoppers stick to their principles even when they have to
tighten their belts.
Coop said that retail sales were up 6.5 per cent to SF14.6 billion, helped by the acquisition in January of the Waro chain, which increased the number of large stores in the company's portfolio - something difficult to achieve other than by acquisition in a country with strict planning laws.
The 2002 takeover of the EPA department store chain also contributed to the company's growth, as did an excellent performance from the company's various ethical and organic brands - Coop Naturaplan, Coop Naturaline, Coop Oecoplan and Max Havelaar.
Sales of these products alone rose by 15 per cent during the year - despite the weakness of the Swiss economy and an inevitable reduction in consumer purchasing power - reaching SF1.34 billion.
There was also an excellent performance from the Betty Bossi range of chilled convenience products launched in 2002, sales of which more than tripled to SF360 million.
The rise in sales also helped Coop to steal market share from its main rivals Migros and Bon appétit, taking it to 23 per cent of the food retail sector, up from 21.9 per cent a year earlier.
Coop's performance was markedly better than that of its two main rivals. Bon appétit recently announced a 2.6 per cent drop in sales to SF3.01 billion, in part due to Coop's acquisition of EPA (Bon appétit used to operate the food retail business within the department stores) but also to lower spending levels - although this helped lift sales at its Pick Pay, Magro and Lekkerland discount banners.
Coop's main co-operative rival Migros managed to end 2003 with a slight increase in sales - turnover of just over SF20 billion was 1 per cent ahead of the previous year's figure - but this figure was flattered by the reduction in the previous year's turnover by SF368 million due to the restatement of the accounts from one of Migros' divisions, travel agency Hotelplan.
Without this effect, sales would have been flat at best, although the group's core supermarket business posted a 1.6 per cent increase in turnover to SF14.4 billion. Like Coop, Migros benefited from a strong performance from organic and ethical products, sales of which reached SF1.76 billion. But growth of 13 per cent for these products in 2002 was reduced to just 1.3 per cent in 2003 - compared to a 15 per cent improvement for Coop.