Between two trends, in a balanced state

Coop ended 2017 with a single-digit sales growth and a stable market share. We asked László Pekó, chairman of CO-OP Hungary’s board of directors and the company’s CEO Géza Tóth about this year’s plans and the state of Hungarian grocery retail.

T.M: – What do the numbers say about 2017 for the Coop Group?

László Pekó
chairman
CO-OP Hungary

László Pekó: – 2017 was a successful year for the Coop retail chain. Our market share has been stable around 12 percent for years. Presently our group has 500 franchise members and stores realised a sales growth of 4 percent. Coop is the retail chain that is present in the most towns and villages – in about 1,600 – serving 1.5 million customers daily. The number of 600-1,500m² Coop stores is growing the fastest.

T.M: – What development projects is the Coop Group working on?

Géza Tóth
CEO
CO-OP Hungary

Géza Tóth: – For large organisations such as the Coop Group technological development is absolutely necessary if we want to increase operating efficiency in the long run. 1,600 stores have joined our IT system. At the moment we are testing a cloud-based IT system that would support our trading processes and take our loyalty programme to a new level. Another priority task is developing our merchandising activity. We have also launched energy efficiency projects, e.g. optimising refrigerators, switching to LED lighting, testing solar panel technology.

T.M: – What are your latest ideas in the fields of product selection and target groups?

G.T.: – Coop is expanding the product selection available in stores. We are going to sell more premium and functional products in stores with a bigger floor space. Coop has more than 1 million loyal customers and we are strengthening their loyalty with promotion campaigns. We keep communicating with them in social media and on other platforms.

T.M.: – Coop Group does many things for the society. What are the group’s CSR plans for 2018?

L.P.: – We have followed the same principles for years. One of Coop’s most important initiatives of this kind is the Coop Rally, which is 13 years old in 2018 and popularises Hungarian products. Coop Aid Foundation helps children that require special care. We have been diamond-level sponsors of the Hungarian Olympic Committee since 1996, financing preparations for the games and athletes.

T.M.: – Do you see negative trends that affect the whole of Hungary’s FMCG retail sector in the currently strong economic environment? Are there problems that need to be solved?

G.T.: – Being a large company is a market advantage but it also creates big challenges – Coop has always been working on achieving a balance between these two. Right now probably the biggest problem for the sector is that growing consumer income increases purchasing power, but on the costs side this is great burden for retail chains, because small shops have to employ many workers and pay higher wages than before. What is more, in poorer regions – especially in small villages – the purchasing power is low but the salary costs are just as high. (x)