Italian retail cooperative Coop Alleanza 3.0 ended 2017 with a net loss of €37.6 million, compared to a net profit of €6.6 million in 2016, with the retailer's president citing both capex investment and increased competition as factors influencing its performance.
In a letter to shareholders, president Adriano Turrini explained that the retailer invested heavily in store renovations as well as management restructuring last year, according to Italian daily La Repubblica.
The cooperative said that losses were largely 'in line with expectations' according to its 2017-2019 strategic plan.
Turrini also pointed out that sales are increasing thanks to the rollout of Easycoop stores and the performance of its franchised stores.
Coop Alleanza 3.0's total revenues were up 3.9% last year to €4.83 billion, however sales in directly-owned stores fell by 1.55% to €4.1 billion.
Pricing Investment
One of the three CEOs of Coop Alleanza 3.0, Paolo Cattabiani, explained to local newspaper Gazzetta di Modena that the group had anticipated a greater loss for the full year, citing a major investment in price reductions last year.
Cattabiani said that €180 million have been invested in for the development, restructuring and innovation of the store network.
Last year, five stores were opened and 35 renovated, including seven hypermarkets and 28 supermarkets, while the Extracoop store bannerwas launched.
Cattabiani pointed out that the challenge is to create a single identity for Coop Alleanza 3.0, as well as raise the group's productivity and bring costs to market average, adding that the cooperative is well on the way of achieving these goals. In order to improve efficiency, some 30 supermarkets will be closed down by 2021.
Bologna-based Coop Alleanza 3.0 was established in 2016 following the merger of regional cooperatives Coop Adriatica, Coop Estense and Coop Nordest.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine
