Magazine: Who is growing faster?

According to a study about FMCG retailers’ cooperatives published on the LZ Retailystic website of German trade magazine Lebensmittel Zeitung, expectation is that the market share of cooperatives will decrease in Europe.

They are likely to have a 24-percent value share in 2024, which is 3 percentage points smaller than it used to be in 2014. However, the sales of retailers’ cooperatives will grow in the next 5 years – their market share will reduce simply because sales of competitors will be growing faster.

As for Central and Eastern Europe, the study says that FMCG retailers’ cooperatives aren’t as dominant as in Germany, France or Italy, because after the collapse of socialism Western retailers started investing massively in these countries. In this region cooperatives are trying to stay in the competition against discounters. (Let us add that in Hungary Coop has been one of the top 3 retailers for decades, e.g. in 2017 they realised HUF 604-billion sales with 4,910 stores, finishing 2nd in the ranking behind Tesco.)

There is a pressure or retailers’ cooperatives in Western Europe too, but this pressure is smaller. Small cooperatives are becoming part of larger networks, for instance in Germany Coop became a member of the Rewe Group. In developed markets it is difficult for cooperatives to acquire new members. Plus they also need to be able to finance members’ investments or help them survive in the less profitable years.

The situation is also difficult for cooperatives because usually they heavily rely on one single market. There are few of them that have managed to enter foreign markets. E.Leclerc was present in 5 European markets for more than 10 years, but they realised only 4 percent of sales outside of France. Rewe is an exception to the rule, though: the German group is market leader in Austria.

The study also reveals that cooperatives are rather efficient and do well due to the large number of sales realised by their customers. Thanks to this they can keep their members, what is more, some of them have major expansion plans: in the United Kingdom the Co-op group will open 100 new stores and modernise another 200 in 2019. //