Coop: 12 percent price reduction for branded goods
With a new price campaign, Coop is continuing its fight against its image as a high-priced retailer. By lowering prices on brand-name products, the mass retailer aims to hold its own against discounters Denner and Lidl.
Coop is continuing its fight against its high-price image with a new price offensive. With lower prices for branded products, the wholesaler wants to assert itself against the discounters Denner and Lidl. From Monday, more than 600 branded items will cost an average of 12 percent less in Coop stores, as the wholesaler announced on Sunday according to SDA. According to Coop, this is the biggest price reduction ever.
With this offensive, Coop is primarily preparing itself for competition in the discount sector. This is currently dominated by Denner in the branded goods segment. Denner took over its main competitor Pickpay in 2005 and has since been taken over by Migros itself. Denner will soon face competition in the discount business with branded goods from the German Lidl chain, which will enter the Swiss market in the spring.
Same low prices as Denner and Lidl
Coop's declared aim is to be able to keep up with Denner and Lidl in terms of price. According to Head of Marketing Jürg Peritz, the wholesaler wants to be able to offer at least the same low prices as the two discounters. With the Prix Garantie and Qualité & Prix product lines, Coop has already been able to achieve price parity with its main competitor Migros for low-price products and private labels, said Peritz. The same is now to happen with branded products.
The price reduction for over 600 branded articles will cost Coop around CHF 100 million per year. According to Group CEO Loosli, the drop in sales will initially be borne by Coop itself. Loosli explains the fact that Coop can afford the price reduction at all by, among other things, the continuous increase in Coop's productivity. Since the merger of the 15 Coop cooperatives at the turn of the millennium, distribution costs have been reduced thanks to centralized stock management, efficient logistics and simpler processes. This has repeatedly created scope for price reductions.
With this offensive, Coop is primarily preparing itself for competition in the discount sector. This is currently dominated by Denner in the branded goods segment. Denner took over its main competitor Pickpay in 2005 and has since been taken over by Migros itself. Denner will soon face competition in the discount business with branded goods from the German Lidl chain, which will enter the Swiss market in the spring.
Same low prices as Denner and Lidl
Coop's declared aim is to be able to keep up with Denner and Lidl in terms of price. According to Head of Marketing Jürg Peritz, the wholesaler wants to be able to offer at least the same low prices as the two discounters. With the Prix Garantie and Qualité & Prix product lines, Coop has already been able to achieve price parity with its main competitor Migros for low-price products and private labels, said Peritz. The same is now to happen with branded products.
The price reduction for over 600 branded articles will cost Coop around CHF 100 million per year. According to Group CEO Loosli, the drop in sales will initially be borne by Coop itself. Loosli explains the fact that Coop can afford the price reduction at all by, among other things, the continuous increase in Coop's productivity. Since the merger of the 15 Coop cooperatives at the turn of the millennium, distribution costs have been reduced thanks to centralized stock management, efficient logistics and simpler processes. This has repeatedly created scope for price reductions.
