Swiss chain COOP is cancelling all bonuses due to the recent rise of 'border shopping' in Switzerland. As the Swiss franc is becoming too expensive compared to the weaker euro, the Swiss are embracing shopping tourism to the neighbouring countries. This way, the Swiss economy could lose up to 4 billion euro per year – and COOP's staff and management lose their bonuses as a result.
Putting 10,000 jobs at risk
The distributor from Basel saw its net profit decrease by 8.1% to 432 million franc (360 million euro) and turnover went down by 1% to 11 billion franc (9 million euro). “We have seen the strongest price reduction since 1969”, said CEO Sutter last week. These reductions however were not big enough to keep the Swiss in Switzerland: “This border shopping costs the Swiss economy an estimated 5 billion franc per year – and the Swiss society at least 10,000 jobs!”
2012 will not be any better, according to Sutter: “It will be another difficult year, just like the last. Either we expand our market share, or we start to fade.” Market research offers no good news either, and sees turnover decrease by another 0.5%.
'Change tax regulations!'
To stop the Swiss from shopping abroad, the CEO demands that tax regulations are changed. Today, the Swiss can import foreign products for 300 franc (250 euro) per person without having to pay tax; a normal family can easily take 1.000 euro worth of groceries over the border. “This amount has to drop urgently, to limit the damage to the Swiss economy”, says Sutter.
The Swiss themselves do not see the problem: a survey in the newspaper Der Sonntag revealed that 90% of them thinks border shopping is not a problem; with most of them commenting that “it is OK to save money”. One in three even says not to pay attention to the import limits; probably not the signal Sutter wanted to see...