Coop Norden recovers - hypermarkets still a problem

Coop Norden’s financials for the first four months of 2006 confirm the retailer’s management that the recovery strategy is paying off. Compared to the same period in 2005, pre tax loss was €12mn (in 2005 it was €23.6mn) and operating loss was €4.9mn (€16.7mn in the first four months of 2005). “We have both increased sales and reduced costs”, President & Chief Executive Svein Skorstad comments. “We’re still a long way from the level of results that we’re aiming to achieve in 2008, but the trend is heading in the right direction.”

Coop Norden improved its performance in all three countries of operation (Denmark, Sweden and Norway) and the retailer is positive about the results of collaboration among the three markets’ cooperatives. “This Nordic collaboration results in much lower purchase costs and better retail concepts at lower costs, which contributes towards the overall improvement in Coop Norden’s financial results”, a press release from Coop Norden reads.

Hypermarkets remain the retailers’ problem. In Denmark the hypermarkets banner Kvickly Xtra remains the only loss making operation. The same holds true for the Swedish hypermarket operation Coop Forum. “Coop Norden’s biggest challenge is to make Coop Forum in Sweden a profitable chain”, comments Skorstad, pointing at the chains good locations and merchandising improvements (price cuts, improved store design and communications). “The price cuts are necessary for us to keep customers and win new ones in an increasingly competitive situation. At the same time it’s important for Coop that we constantly improve the quality of everything we do”, Skorstad says.