Coop's Swiss agreement with suppliers saves duopoly

Much to Coop Switzerland's relief, they finally succeeded in offering 700 brands at reduced prices after almost sidelining themselves in the price war with Migros.

 

Last week, Coop Switzerland posted an emphatic message titled “Enough is enough” on its website, saying Euro-zone multinationals are “exchange rate leeches” as they kept profits from changes in the Euro – Swiss Franc exchange rate for themselves. This web page has recently been deleted, as Coop – just like its competitor Migros – has reached an agreement with these suppliers. 

Coop - Migros: 2-0

Today, a proud 'Great success!' features in capitals on the Swiss Coop website, accompanied by logos of international A-brands whose prices have been lowered by 10 to 20 per cent. In two ways Coop defeats rival Migros: Coop boasts 700 articles reduced in price (compared to 'only' 500 for Migros) and its price reductions were valid immediately (last Saturday) – as opposed to Migros's price reductions that only came into force today (Monday). 

 

Coop's management will be very relieved with this agreement, as pressure was immense. Its competitor Migros had already succeeded in convincing large suppliers to share its exchange rate gains with their customers in the form of lower prices, whereas Coop had not found such an agreement before last Saturday. As it was very unlikely that Coop's previous website post inclined its suppliers into being obliging, chances were there that Coop had sidelined itself.

In customers' and suppliers' best interests

With this agreement, Coop can claim a major success for its customers. Of the three companies explicitly named in their previous post, only Mars's articles are already included in the price reductions. L'Oréal and Ferrero, the two others, are not (yet) – but according to rumours there are also negotiations with those two.

 

As a situation with two dominant retailers is far better for suppliers than one with one predominant chain, it was clear that it was also in the suppliers' best interest to reach an agreement with Coop. If they have realised other concessions from Coop, it is pretty certain that they will be kept as covert as the Swiss banking secrecy.

Much to Coop Switzerland's relief, they finally succeeded in offering 700 brands at reduced prices after almost sidelining themselves in the price war with Migros.

 

Last week, Coop Switzerland posted an emphatic message titled “Enough is enough” on its website, saying Euro-zone multinationals are “exchange rate leeches” as they kept profits from changes in the Euro – Swiss Franc exchange rate for themselves. This web page has recently been deleted, as Coop – just like its competitor Migros – has reached an agreement with these suppliers. 

Coop - Migros: 2-0

Today, a proud 'Great success!' features in capitals on the Swiss Coop website, accompanied by logos of international A-brands whose prices have been lowered by 10 to 20 per cent. In two ways Coop defeats rival Migros: Coop boasts 700 articles reduced in price (compared to 'only' 500 for Migros) and its price reductions were valid immediately (last Saturday) – as opposed to Migros's price reductions that only came into force today (Monday). 

 

Coop's management will be very relieved with this agreement, as pressure was immense. Its competitor Migros had already succeeded in convincing large suppliers to share its exchange rate gains with their customers in the form of lower prices, whereas Coop had not found such an agreement before last Saturday. As it was very unlikely that Coop's previous website post inclined its suppliers into being obliging, chances were there that Coop had sidelined itself.

In customers' and suppliers' best interests

With this agreement, Coop can claim a major success for its customers. Of the three companies explicitly named in their previous post, only Mars's articles are already included in the price reductions. L'Oréal and Ferrero, the two others, are not (yet) – but according to rumours there are also negotiations with those two.

 

As a situation with two dominant retailers is far better for suppliers than one with one predominant chain, it was clear that it was also in the suppliers' best interest to reach an agreement with Coop. If they have realised other concessions from Coop, it is pretty certain that they will be kept as covert as the Swiss banking secrecy.

Questions or comments? Please feel free to contact the editors


Lubach: “Fair clothing is a matter of priorities”

15/11/2017

Ever since the Rana Plaza disaster, the clothing industry has clamoured for transparency in the clothing manufacturing branch, but Zondag met Lubach’s Arjen Lubach proved on Sunday that there is no actual transparency yet.

Fashion chain Canada Goose opens first European store

14/11/2017

Canadian fashion chain Canada Goose opened its first European store in London. The brand’s clothing has been in Europe for quite some time, but only at multi-brand stores up until now.

Desigual suffers turnover blow in first three quarters

14/11/2017

Spanish fashion chain Desigual suffered a blow in the first three quarters of 2017, with turnover  down more than 10 %. It mainly struggled in Europe, a region where it generates almost all of its turnover.

Two or three stripes on clothing are Adidas' property

13/11/2017

Swedish store chain H&M can no longer use parallel stripes on its (sports) clothing, because they resemble Adidas’ three stripes too much, according to a The Hague court.

Strong third quarter for Adidas

10/11/2017

Sports clothing manufacturer Adidas experienced a strong third quarter. Its growth was slower than in the previous quarter, but its operational profit exceeded analysts’ expectations.

Yoox Net-a-Porter grows but still failed to live up to expectations

09/11/2017

Online retailer Yoox Net-a-Porter’s third quarter like-for-like turnover grew 17.7 % to 481.8 million euro, which is not entirely what analysts had expected. Its growth slowed down in the United States and China in particular.

Back to top