Swiss retailers Migros and Coop battle for prestige

 “Mars, L'Oréal and Ferrero are exchange rate leeches” is Coop Switzerland's outspoken opinion on its own website. The message is the climax of the Swiss price war between Migros and Coop caused by the strong Swiss Franc. While Migros has announced a wide price reduction, Coop has declared war on several A-brand multinationals.

For months already, Coop has been asking its international suppliers to share their exchange rate gains with Coop('s customers) through price reductions, but to no avail. Coop has decided that “Enough is enough” and it has announced to delist 95 international branded articles.

Naming & shaming

The Swiss cooperative is in such big trouble that it has adopted the naming & shaming tactics to force its suppliers into compliance. It is striking that two of the three companies Coop explicitly names on its website, L'Oréal and Ferrero, did agree to similar price reductions with Coop's rivals Migros.

 

Last Tuesday, 16 August, Migros announced it will lower the price of 500 products as exchange rate changes will be shared with the customers. This announcement came just one day after Coop's original complaint in this matter.

"Hard, but fair"

Now Migros proudly announced another range of price reductions, with – amongst others – Nestlé, Beiersdorf, Procter & Gamble and Unilever joining the agreement. “Hard but fair negotiations with our partners, with whom we have been cooperating for many years, have now resulted in price reductions of between 10 and 20 per cent”, as Migros chairman Herbert Bolliger boasted.

Migros's discounter Denner had already announced to lower prices of 50 brands like Pampers and Gillette (both Procter & Gamble) earlier this month. PlanetRetail stated Denner itself paid for these price reductions, partly through a larger parallel import, and claimed that these price reductions were meant to exercise pressure on suppliers still unwilling to share exchange rate gains – meaning that Migros succeeds where Coop fails (so far).

All about prestige

The clash between the two is all about prestige, as producers have been complaining about Migros's and Coop's market power in Switzerland. While true for smaller and medium sized producers, Coop's focus on large multinationals renders this complaint moot. “It is unacceptable that large international producers, based in the Euro-zone, keep the exchange rate gains only for themselves” says Coop's director of purchase Jürg Peritz, who does not exclude further delistings.

 “Mars, L'Oréal and Ferrero are exchange rate leeches” is Coop Switzerland's outspoken opinion on its own website. The message is the climax of the Swiss price war between Migros and Coop caused by the strong Swiss Franc. While Migros has announced a wide price reduction, Coop has declared war on several A-brand multinationals.

For months already, Coop has been asking its international suppliers to share their exchange rate gains with Coop('s customers) through price reductions, but to no avail. Coop has decided that “Enough is enough” and it has announced to delist 95 international branded articles.

Naming & shaming

The Swiss cooperative is in such big trouble that it has adopted the naming & shaming tactics to force its suppliers into compliance. It is striking that two of the three companies Coop explicitly names on its website, L'Oréal and Ferrero, did agree to similar price reductions with Coop's rivals Migros.

 

Last Tuesday, 16 August, Migros announced it will lower the price of 500 products as exchange rate changes will be shared with the customers. This announcement came just one day after Coop's original complaint in this matter.

"Hard, but fair"

Now Migros proudly announced another range of price reductions, with – amongst others – Nestlé, Beiersdorf, Procter & Gamble and Unilever joining the agreement. “Hard but fair negotiations with our partners, with whom we have been cooperating for many years, have now resulted in price reductions of between 10 and 20 per cent”, as Migros chairman Herbert Bolliger boasted.

Migros's discounter Denner had already announced to lower prices of 50 brands like Pampers and Gillette (both Procter & Gamble) earlier this month. PlanetRetail stated Denner itself paid for these price reductions, partly through a larger parallel import, and claimed that these price reductions were meant to exercise pressure on suppliers still unwilling to share exchange rate gains – meaning that Migros succeeds where Coop fails (so far).

All about prestige

The clash between the two is all about prestige, as producers have been complaining about Migros's and Coop's market power in Switzerland. While true for smaller and medium sized producers, Coop's focus on large multinationals renders this complaint moot. “It is unacceptable that large international producers, based in the Euro-zone, keep the exchange rate gains only for themselves” says Coop's director of purchase Jürg Peritz, who does not exclude further delistings.

Questions or comments? Please feel free to contact the editors


Zalando's growth once again surpasses 20 %

10/08/2017

German Zalando has achieved its 20 % growth target for the second quarter, but just barely. It still forecasts a 20 to 25 % growth for its full fiscal year.

Gucci files lawsuit against Forever 21

09/08/2017

Fashion label Gucci has decided to file a lawsuit against fashion chain Forever 21 in the United States. The case revolves around several pieces of clothing, all with a blue-red-blue or green-red-green ribbon. 

Ralph Lauren outperforms expectations

08/08/2017

Fashion label Ralph Lauren’s first quarter was a very good one, as it beat both analysts’ turnover and profit forecasts. It is quite a turnaround for a company that suffered a huge loss only a year ago.

Difficult first quarter for New Look

08/08/2017

British fashion chain New Look’s past quarter was disappointing with a 4 % turnover drop. Its adjusted EBITDA fared much worse, with a 35 % drop.

ING forced to pay Foot Locker compensation

07/08/2017

Dutch ING Bank will have to pay the Dutch and European Foot Locker branches 300,000 euro in damages. A court decided the fee after Foot Locker was scammed for 1.8 million euro in 2015.

Asics opens its largest store yet in London

04/08/2017

Sports brand Asics opened a new flagship store in London, which is also its largest store in the world. Located in Regent Street, the store will bring together its four labels for the first time ever.

Back to top