Coop Schweiz Genossenschaftsverband - Company Profile, Information, Business Description, History, Background Information on Coop Schweiz Genossenschaftsverband

Thiersteinerallee 12
Postfach 2550
CH-4002 Basel

Company Perspectives:

Coop's ambition is to be the best large retailer in Switzerland and the closest to its clients. That is why Coop responds to the leading consumer trends in dynamic quality of life, freshness, health and convenience.

History of Coop Schweiz Genossenschaftsverband

Coop Schweiz Genossenschaftsverband is Switzerland's second-largest food products retailer, behind fellow cooperative Migros. Coop is also the country's leading electronics and appliance retailer through subsidiary Interdiscount/Radio TV Steiner. Together the Coop retail empire consists of nearly 1,600 convenience stores (including many with filling stations), supermarkets, superstores, and other retail formats, such as hardware stores and the Vitality health and beauty products chain, for a total sales surface area of nearly 1.2 million square meters. Although much of the group's sales are made through major brand products, one of Coop's chief selling points is its range of environmentally and socially conscious labels, including Coop Naturaplan, a range of organic food products; the textiles and cosmetics line Coop Naturaline; appliance and other products under Coop Oecoplan; and the socially conscious brand of Cooperacion/Max Havelaar import products. The cooperative group manufactures many of the products sold under its brand names. Together these products generated more than CHF 1 billion in 2001, out of group total sales of CHF 13.6 billion. The year 2001 also reflected the first year of the "new" Coop when in April the group, which then consisted of the Coop and 14 regionally operating cooperating societies, merged together to form the single Coop business. Coop has also redirected its focus on its food products and other retail products, selling off its majority shareholding in banking group Coop Bank and selling its agricultural subsidiary in 2000.

Swiss Cooperative Force at the Turn of the 20th Century

The cooperative movement spread throughout Europe during the mid-19th century when the developing urban working class, cut off from traditional agrarian food sources, began grouping together in order to assure themselves of quality foods at fair prices. The first cooperative was founded in Rochdale, England, in 1844; its principles of honesty and democracy were soon adopted by societies in other European countries and around the world. As the cooperative movement developed, many cooperative societies began to band together to found intermediate wholesale societies in order to negotiate bulk purchases at lower prices. These wholesale societies soon entered manufacturing as well, supplying goods to their member societies.

In Switzerland, various attempts were made in the second half of the 19th century to group together the rapidly growing numbers of cooperative societies, most often called consumer societies until the codification of the cooperative society under Swiss legislation in 1883. In 1890, a group of 27 cooperative societies met to form a new group, the Union Suisse des Sociétés de Consommation (USC). By the end of that year, USC had grown to include 43 member societies. Two years later, USC had grown sufficiently to open a central bulk products storage and distribution center. The following year, USC officially adopted its status as a cooperative society, and in 1897 USC joined the International Cooperative Alliance.

USC began publishing a newsletter for its members that same year. This newsletter was replaced in 1902 by the cooperative's own newspaper, the Genossenschaftliches Volksblatt, later to be renamed the Coop Zeitung. A French-language edition, Cooperation, followed in 1904; in 1906, the cooperative launched an Italian-language edition as well. By then, USC had purchased a new warehouse, in Wülfingen, bought in 1900. In 1905, the cooperative group added a new chemical laboratory in order to provide testing and control procedures for its food products. Two years later, USC built a new warehouse site in Pratteln, which included coffee-roasting, milling, and other facilities.

USC followed the international cooperative movement in adding new services for its members, including an insurance component, later to be renamed Coop Assurance, in 1909. The following year, USC opened its own printing facility in order to support the growing number of subscribers to its newspapers. Then in 1912, USC entered production of footwear with the construction of its own factory. That same year, USC began offering banking services. The group also acquired the Zürcher Satdtmühle, then the country's largest grain mill.

After forming the Bell S.A. alliance for distributing meats to its member societies in 1914, USC entered dairy production in 1916 with the creation of the Coopérative Laitière des Sociétés Suisses de Consommation. The company also entered farming, acquiring a number of farms, then founded the Coopérative Suisse pour la Culture Maraichère (SGG) in 1918 for its vegetable growing activity. The following year, USC began producing furniture as well.

USC's expansion continued in the 1920s with the founding of a the cooperative's own vacation colony in 1921 and the creation of a training academy in 1923. In 1927, USC formalized its banking services, creating a new subsidiary, the Banque Centrale Cooperative. In 1935, USC changed its name to Union Suisse des Coopératives de Consommation. At that time, also the group began promoting its own branded products under the Coop name.

World War II interrupted USC's growth. The years following the war, however, were a time of brisk economic growth and vast changes in the retail sector. One of the most important of these was the widespread adoption of the so-called American supermarket style of self-service stores. The first of USC's coop members opened a self-service supermarket in Zurich in 1948. Before long, the concept had conquered nearly all of the Swiss grocery market.

Streamlining in the 1970s

By 1950, USC's membership numbered more than 570 individual cooperative societies. This was to prove to be the highest number in the group's existence as in ensuing years the group moved toward encouraging mergers among its member societies as well as absorbing a large number of societies into the USC structure itself. USC also began to reorganize its distribution network, creating 30 regional warehouses and distribution centers throughout Switzerland in 1954. At the same time, the group moved to standardizing other practices among its member societies, such as the creation of a single system of member rebates offered throughout its network of stores, which topped 3,200 in 1960. The group also adopted a single logo in 1960, placing its members' stores under the Coop brand.

By 1965, USC had begun to develop its first national sales strategy and rolled out its first television advertising campaigns. Yet by then, USC's dominance in the Swiss retail food market had been challenged by fast-rising Migros, which became the country's leading retailer in the mid-1960s. USC responded by reorganizing its member base, encouraging a wider scale of mergers. By the end of the decade, the number of member societies had already been scaled back to 400, but in 1969 USC went still further to adopt a plan that called for the number of its member societies to be reduced to just 40 by the middle of the 1970s.

An important part of the group's strategy, which included a continued reorganization of its distribution and purchasing operations into a centralized structure, came with the adoption of a new name, Coop Schweiz (alternatively Coop Suisse). Meanwhile, while merging its member societies, Coop continued to expand into other areas, such as opening a new cheese-making facility in Kirchberg and launching a new subsidiary, Coop City SA, to govern the group's move into larger, department-store formats.

By 1979, Coop had succeeded in reducing its membership ranks to just 67 societies. The group then launched the second phase of its consolidation drive, pledging to scale back its number of member societies to just 40, supported by 18 distribution centers, by 1982--a goal the group was to meet by 1983. By then, Coop had branched out into a new product area when the 1980 acquisition of Radio TV Steiner took it into the home electronics market. The following year, Coop added a travel component as well, taking a 40 percent stake in Popularis Tours (subsequently sold to Swiss travel leader Kuoni in 1990).

Coop moved into other new areas in the 1980s, such as hardware stores, with the formation of Baticentre Coop in 1984, and florist shops, with the launch of Centre de Fleurs Coop in 1985. The group once again returned to its drive to merge its member societies, beginning a new plan which called for the reduction of the number of member societies to just 18, based around its 18 regionally operating warehouse and distribution centers.

Restructuring for the New Century

At the end of the 1980s, Coop launched a new label, Coop Oecoplan, for its paper goods and appliances range. This was to be the first of the company's environmentally and socially conscious brands--which became the thrust of the group's own-label products in the 1990s. That brand was joined in 1992 by the Max Havelaar/Cooperación label, which promoted social and environmental responsibility among the group's import products. Two more labels appeared in 1994, the organic foods brand Coop Naturaplan and the textiles and cosmetics range Coop Naturaline.

Toward the mid-1990s, Coop had already taken on the aspects of a unified company rather than a grouping of independent societies. In 1994, the group began a series of acquisitions, including those of IMPO Import Parfumerien and TopTip, a chain of furniture stores. The following year, Coop bought up Steinfels, a manufacturer of detergents and cleaners for the industrial and public sectors. Then in 1996, Coop added the K3000 chain of supermarkets. That same year, the company acquired the Swiss operations of the Interdiscount consumer electronics retail group, merging that with its Radio TV Steiner stores to create the Swiss home electronics leader.

By then, Coop was moving toward transforming itself into a single, centrally operated entity. The group adopted a new management structure, grouping its management under a central board of directors, which was then given decision-making stature. Then, in 1997, Coop launched a new merger plan, called "Regioforte," that called for a reduction of its member societies, by then just 14, to a maximum of eight. Yet resistance from a number of the group's members forced the group to abandon that plan. Instead, a new plan, called "CoopForte," was put into place in 1998 that called for the reduction of the entire group to just a single entity by 2001. As part of that restructuring, the group also began shedding a number of activities in order to focus on its core business of retailing. As such, Coop sold off its cheese-making facility in 1998, then sold its controlling share of Coop Banque to Banque Cantonale de Bâle in 2000. At the same time, Coop ended its farming activity.

The new, streamlined Coop celebrated its first year with rising sales, topping CHF 13.6 billion for the year. A significant portion of those sales by then came from its own-brand labels, which topped CHF 1 billion in sales, beating the group's sales forecasts by two years. At the same time, the group celebrated its two-millionth member. In August 2001, Coop launched its own Internet-based home delivery service. Meanwhile, Coop then debuted its newest store concept, the large-scale Mégastore Coop, the first of which opened in Crissier, near Lausanne, in October 2001. The group also reinforced its printing and publishing wing with the acquisition of a 50 percent share in Betty Bossy Verlags AG, the leader publisher of cookbooks and cooking magazines in Switzerland. Coop was prepared to greet the 21st century as a streamlined retailing powerhouse, while remaining committed to its founders' cooperative ideals.

Principal Subsidiaries: Bell Holding AG; Argo AG; Coop Mineralöl AG; CWK AG; Chocolats Halba AG; Impo AG; Interdiscount/Radio TV Steiner AG; Nutrex AG; Pasta Gala SA; Reismühle Brunnen AG; Steinfels Cleaning Systems AG; Swissmill; SILAG; Rhein Terminal AG; TopTip AG; Betty Bossy Verlags AG (50%).

Principal Competitors: Metro Holding AG; Maus Freres SA; Migros-Genossenschafts-Bund.


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