Coop isn’t slowing down

We asked László Pekó, chairman of the board of directors of CO-OP Hungary Zrt. and the company’s CEO Géza Tóth about the last year and the challenges of 2020.

László Pekó
chairman of the board of directors
CO-OP Hungary

What was 2019 like for the Coop Economic Group?

László Pekó: – 2019 wasn’t an easy year but it was a successful one for Coop, we managed to keep our 10-12 percent market share. Sales grew by 3 percent at group level and valued at HUF 643 billon. About 37 percent of Coop sales were realised by the 4 big franchise members. We operate more than 2,300 stores in about 1,500 towns and villages.

How did retail and shopper trends manifest in sales?

Géza Tóth
CEO
CO-OP Hungary

Géza Tóth: – Purchasing power has increased and we could sense that. Coop customers don’t only buy more products but also premium ones. We didn’t reduce the number of our promotional activities. Special offers made to our more than 1 million loyal customers form an important part of these. Sales grew above the average in 300-400m² Coop stores.

What were the main development directions in 2019?

Géza Tóth: – We continued the store modernisation programme and now more than 70 shops are equipped with solar panels – the goal is to have 100 of these by the end of the year, getting more than 2 percent of the energy we use from renewable sources. Coop installed e-car charging stations at a few stores and this programme also continues. Tisza-Coop – they supply 500 stores with products – built a modern 5,000m² fresh product warehouse in Szolnok.

We must also talk about the coronavirus situation. How did the operations of Coop stores change in the last two months?

László Pekó: – The big stockpiling period in mid-March was a big challenge for us too. But despite the hardships, we managed to supply even the smallest villages with the necessary products. We provided workers with the necessary protection equipment instantly and have been disinfecting the stores, shopping baskets and trolleys regularly ever since. In many Coop stores, plexiglass panels separate the cash register and the cashier from customers.

„We are committed to supplying small settlements, even beyond power, if needed. Currently, Coop is present at nearly  1500 settlements with 2300 stores”

In the light of this year’s events to what extent did you reevaluate your plans and goals for 2020?

László Pekó: – Our original objective was a few-percent sales growth, but everything has become uncertain by now. In March the sales growth was 20-40 percent, but in April it was already back around the base level or even below that in certain areas.

Géza Tóth: – We haven’t ditched any of our development plans yet, and we will decide about the bigger investments after the emergency situation. Store modernisation continues and we have just completed building a fresh product logistics centre in Miskolc. Currently, we are developing a smartphone app for the Coop loyalty programme. We use social media in communicating – we already have more than 560,000 followers on Facebook.

Will there be changes in Coop’s CSR activity?

László Pekó: – More than 80 percent of the products sold in Coop stores are Hungarian-made. We hope that we can organise the Coop Rally this September too, and our cooperation with the Hungarian Olympic Committee continues. Via the Coop Aid Foundation, we are donating HUF 25 million worth of private label products to 8,268 children living in foster care for the fifth time. In addition to this, Coop members also support local communities, e.g. donating food, cleaning products or money. (x)