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  #121  
Old 22.04.2008, 18:26
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Re: Migros and COOP - Low quality explained...

...and they are crap.

(The above forms part of the Executive Summary for my latest Mintel report)

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Migros and Coop are large fish in a small pond.
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  #122  
Old 22.04.2008, 18:26
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Re: Migros and COOP - Low quality explained...

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The list of factors you posted can all influence your retail price offering.
A couple of examples from your list:
competition - more there is, the more downward pressure on your prices
Exactly what I said, however this is not a factor between UK and CH due to them not competing BETWEEN EACH OTHER FOR THE SAME PRODUCT. SO THIS DOES NOT EXPLAIN THE DIFFERENCES BETWEEN the two countries vis a vis 7m vs 70m. REMEMBER THAT NEV was talking about buying power of supermarkets, not the pricing in a particular country.
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frequency of puchase - for seasonal items, depending on your supplier base you may have to multiple source.
we were talknig about Rice Krispies as the example. If you are not going to read the entire thread properly, or alternately, come to it late and skim and not take in the finer details you should not be posting arguments. You've made an argument out of nothing. Contributing a couple of 5 word comments hardly adds value to anyone, for you groan and thanks are more than enough..
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We could work through the list and state the factors of that criteria that influence your retail price.
You say that the only relevant one in your scenario (two countries different sizes) is distribution.
Clearly not. In addition to those you have listed there are, just off the top off my non-MBA-head:
economies of scale (market size dependent)
competitive factors (market share of overall market size dependent)
food&safety regs,
national legislation,
import policies and tariffs and other Environmental factors (EU) at play.
Again you have to remember that this was written specifically on the subject of buying power and size of market in UK vs CH, I was answering Nev's post directly in front of mine. Nev (sorry Nev for dragging you through all this) said that he felt it was, and I paraphrase here "the UK with its larger supermarkets servicing a larger population was better positioned to negotiate from the manufacturers cheaper products than the Swiss supermarkets". My proposition is that this is cr*p. that the size of the market and the spread and size of the shops have nothing to do with it (etc etc) and it all comes down to screwing the customer because he is stupid (sorry, mis-focused).
Of course you additional points come into play in the question of "pricing", but not into the argument "do UK supermarkets have cheaper prices because they are bigger and there are more people in the UK". Nev's argument was, I believe entirely caught up with the economy of scale is king (Nev again apologies and correct me if I am wrong) which I dispute because COOP/Migros are the biggest games in town and if anything are capable of screwnig the manufacturer and public far more capably than 10 supermarket chains in the UK.
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A larger country with a larger market could have lower prices for any number of reasons, and to assume that the size of the market is not relevant for this analysis is naive at best.
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I know, and if you read my posts, and you'd best read Nev's too, you'd understand that we are agreeing.
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  #123  
Old 22.04.2008, 18:27
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Re: Migros and COOP - Low quality explained...

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Austria has a population comparable to Switzerland (8.5M) and a similar topography (i.e. production cost should be comparable as well, maybe there's a slight advantage due to better climate allowing more extensive wheat and vegetable production) plus a VAT of 20% compared to CH 7.6%. Still, food you can buy in grocery stores is cheaper and of significantly higher quality. And the density of supermarkets and small stores in higher than in CH as well.
Having never set foot in the place I'll have to take your word for it. Now all we have to do is figure out how the Austrians do it. I do have experience in the north of Ireland and I can tell you that until the UK major supermarkets moved in 12 years ago with their superstores the quality and variety of shelf goods in local small supermarkets was not good. In my book economies of scale make a huge difference in the supply chain.
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  #124  
Old 22.04.2008, 18:29
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Re: Migros and COOP - Low quality explained...

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Basic economics?

If we are keeping the disucssion to why prices are more in CH than the UK AND that Nev's belief is that the UK is larger with 'more powerful' supermarkets AND using Rice Krispies as the example as i have posted... then nothing more than I have already said!

Or do you have a different opinion as to why? Do you belived prices in the UK are lower because the country is larger, or that the supermarkets buy more?
It's because the supermarkets are larger and, as pointed out before, benefit from economies of scale that are not even conceivable to the likes of CO-OP and Migros.

This ranges from enormous buying power globally to product and market diversity (multiple revenue streams) to high tech, and very expensive, distribution hubs. At the start of the millennium (may have changed now) the Tesco club card was not only the best indication of shopping habits in Britain but was the most effect way of tracking people, beyond ANY government means. The have the infrastructure, buying power and consumer knowledge.

Now this on it's own is no incentive to keep prices down, but the big boys (Tesco, Walmart and Carrefour) are massively aggressive. Tesco have nailed the desirability, affordability and availability trio in England, the latter being the main problem for Walmart when they entered the UK. Walmart tried to compete on price and so Tesco responded with the same dragging just about everybody into the throng.

This has been repeated all over Europe when you have multiple truely massive supermarket chains (Tesco almost completely withdrawing from France because they couldn't compete with Carrefour on their home turf).

What is the incentive for CO-OP and Migros to compete on price? They have similar buying power, they are similarly sized, they are are both mid ranged brands.
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  #125  
Old 22.04.2008, 18:37
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Re: Migros and COOP - Low quality explained...

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It's because the supermarkets are larger and, as pointed out before, benefit from economies of scale that are not even conceivable to the likes of CO-OP and Migros.

What is the incentive for CO-OP and Migros to compete on price? They have similar buying power, they are similarly sized, they are are both mid ranged brands.
Excellent summary and in a nutshell, particularly the second point which I hadn't considered. Tescos, Sainsburys et al are at each others throats. Migros and COOP have no incentive to upset the apple cart. Happy, are we all agreed?
Now, how do those Austrians do it?
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  #126  
Old 22.04.2008, 18:41
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Re: Migros and COOP - Low quality explained...

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Having never set foot in the place I'll have to take your word for it. Now all we have to do is figure out how the Austrians do it. I do have experience in the north of Ireland and I can tell you that until the UK major supermarkets moved in 12 years ago with their superstores the quality and variety of shelf goods in local small supermarkets was not good. In my book economies of scale make a huge difference in the supply chain.
See my previous link - the document contains a table comparing price levels in various countries. The only thing that is evident is that all very expensive countries are indeed small. However, there are also some small, yet cheap countries (e.g., Austria, Belgium, Netherlands) and some larger countries that are relatively expensive (e.g., UK).

I believe scale economies only explain a small part of price differentials. The rest must be related to level of competitiveness, import restrictions, and local regulations. Another important factor could be the income level in a country - when you look at the list again, you can see that the very expensive countries are also the richest in Europe. Might be the case that consumers look at prices also relative to their monthly earning (i.e., CHF 20 in Switzerland is probably equal to EUR 1 in Germany from that point of view).

Also interesting to note that shopping in Ticino is considerably cheaper than in Zurich (meat for example). This could be driven by competition from Italy as many people go to shop for groceries there.
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  #127  
Old 22.04.2008, 18:42
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Re: Migros and COOP - Low quality explained...

My five words were due judgement on the merits of the quoted text.

Nev says paraphrased by Mr Happy:
"the UK with its larger supermarkets servicing a larger population was better positioned to negotiate from the manufacturers cheaper products than the Swiss supermarkets".

Me Happy says:
" My proposition is that this is cr*p. that the size of the market and the spread and size of the shops have nothing to do with it (etc etc) and it all comes down to screwing the customer because he is stupid (sorry, mis-focused)."

Our survey says:

BA BAH!!!!!

Delectable Dave says:
Even companies the size of Coop & Migros don't have the negotiating clout of the UK supermarkets. Many of these are capable of taking a suppliers complete output in return for exclusive supply, guaranteed delivery and superlow wholesale pricing.

Of course economies of scale are a major factor in food wholesale pricing. Whether its the dominant factor depends on consideration of everything else. So before you pontificate further, perhaps you should obtain a nice pie-chart that demonstrates this for us.

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  #128  
Old 23.04.2008, 10:22
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Re: Migros and COOP - Low quality explained...

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See my previous link - the document contains a table comparing price levels in various countries. The only thing that is evident is that all very expensive countries are indeed small. However, there are also some small, yet cheap countries (e.g., Austria, Belgium, Netherlands) and some larger countries that are relatively expensive (e.g., UK).

I believe scale economies only explain a small part of price differentials. The rest must be related to level of competitiveness, import restrictions, and local regulations. Another important factor could be the income level in a country - when you look at the list again, you can see that the very expensive countries are also the richest in Europe. Might be the case that consumers look at prices also relative to their monthly earning (i.e., CHF 20 in Switzerland is probably equal to EUR 1 in Germany from that point of view).

Also interesting to note that shopping in Ticino is considerably cheaper than in Zurich (meat for example). This could be driven by competition from Italy as many people go to shop for groceries there.
Exactly.

FYI Spending cash after basic living expenses is about 5% more in CH than AT, they are 25% higher in CH than DE and FR however. UK is about 15% lower than CH and US is 10% HIGHER - which is an example of a low tax, low cost economy.
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  #129  
Old 06.07.2008, 21:14
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Re: Migros and COOP - Low quality explained...

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My friend told me (and now you can tell your friends that you heard it from a bloke on the internet) the following:


He has a friend - ex colleague actually - who is a buyer for COOP. Apprently, when all the bidding for the fruit and veg takes place, He is always under instructions to get the lowest possible quality (actually the instructions are cheapest but you know what that means). Apparently it is well known in the industry that the Brits (Tesco, Sainsbury's, ASDA etc) take the best for the UK, the other european nations then go in at various levels and at the very bottom of the pile, is Migros and COOP. They buy stuff knowing that it'll be rotting in a few days because its cheap. It doesn't matter apparently because the consumer is so "sure-in-their-own-minds" that because they are in Switzerland, it has to be the best..


So the next time you are looking at a mouldy rotten selection in COOP, remember that you should be shopping somewhere else.
Normally I am happy with the groceries we buy from Migros & Coop. I'm resurrecting this old thread because I have literally purchased 4 bags of onions in the past 2 weeks and all of them have been utter crap. The onions have gone bad and I have to cut away 2-3 layers of skin to get to the good part.

I don't want to be the pain in the ass consumer who takes back an open bag of vegetables, it's just incredibly annoying as I continued buying different brands of onions from different stores.

Ok - rant over.
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  #130  
Old 06.07.2008, 21:24
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Re: Migros and COOP - Low quality explained...

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Truly??!! Is that why my fruit from Coop tends to rot (and grow mould) after 1 or 2 days??

Does that mean I now have to shop for fruit and veg from Globus and Jelmoli? Will have to find details of those farmers' markets again ...
you don't need to wait one single day... if you look well among the many green salads in the fridge at Migros or Coop, you can be absolutely sure that you will find at least one or two that are already moulding on the shelves....
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  #131  
Old 07.07.2008, 00:24
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Re: Migros and COOP - Low quality explained...

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Normally I am happy with the groceries we buy from Migros & Coop. I'm resurrecting this old thread because I have literally purchased 4 bags of onions in the past 2 weeks and all of them have been utter crap. The onions have gone bad and I have to cut away 2-3 layers of skin to get to the good part.

I don't want to be the pain in the ass consumer who takes back an open bag of vegetables, it's just incredibly annoying as I continued buying different brands of onions from different stores.

Ok - rant over.
That is exactly what Migros and COOP is counting on. They put the product in plastic bags so you can not test or see all the flaws in the product.

They also know that the majority of customers will not return the product so they are far ahead as they have gotten rid of the old product and still got the maximum value for it.

My suggestion is to return the bag of produce and scream at the top of your lungs that the quality of the products you bought is so poor as to possibly represent fraud on the part of the store. Not only do you want your money refunded but you want reimbursed for your transport back to the store and return to your home.

Also in the future do not buy produce or fruit at the COOP or Migros as most everyone know that the quality is always suspect. There are many farmers markets in the area and their quality is well know to everyone who shops there.
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  #132  
Old 07.07.2008, 00:33
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Re: Migros and COOP - Low quality explained...

Since Marc73 talks of salads in fridges, I think he means the pre-cut ones. I assume that they have a shorter shelf life than normal salads. A few weeks ago, a food chemist was quoted in NZZaS stating that the pre-cut salads are inferior in hygiene to their whole counterparts, washed at home.
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  #133  
Old 07.07.2008, 00:48
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Re: Migros and COOP - Low quality explained...

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Since Marc73 talks of salads in fridges, I think he means the pre-cut ones. I assume that they have a shorter shelf life than normal salads. A few weeks ago, a food chemist was quoted in NZZaS stating that the pre-cut salads are inferior in hygiene to their whole counterparts, washed at home.
I have had the unpleasant experience with both cut and whole salads.
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  #134  
Old 07.07.2008, 09:19
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Re: Migros and COOP - Low quality explained...

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Also in the future do not buy produce or fruit at the COOP or Migros as most everyone know that the quality is always suspect. There are many farmers markets in the area and their quality is well know to everyone who shops there.
It would be nice if this were always true. We bought some strawberries and blueberries from the market at Burkliplatz a few weeks ago that both went off within 1.5 days. Overall, we've been happy with the quality of the produce there, but let's not act like they walk on water.
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  #135  
Old 07.07.2008, 10:39
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Re: Migros and COOP - Low quality explained...

I'm lucky enough to have a little corner where I can grow my own salad. It's amazing how much you can grow in a small space. Once it's taken up and washed and put in a plastic ziplock bag it can last for days in the fridge, especially if you keep the leaves whole. In fact the outer leaves which we remove and throw on the compost heap seem to stay fresher than the the salads we buy from the supermarket. Just goes to show how long some of this stuff in supermarkets has been hanging around before being passed on to the consumer. I think the act of shredding the stuff supermarkets put in plastic bags accounts for why it doesn't have a long shelf life. I wouldn't hesitate to take back stuff that has gone off. I agree where ever you buy them, onions seem to the most risky but luckily Manor supermarché sells them loose most of the time.

Last edited by Nev; 07.07.2008 at 10:42. Reason: add
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  #136  
Old 07.07.2008, 10:46
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Re: Migros and COOP - Low quality explained...

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In fact the outer leaves which we remove and throw on the compost heap seem to stay fresher than the the salads we buy from the supermarket. .
I wish Migros and COOP administrators would read this rather very humiliating statement.......
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  #137  
Old 07.07.2008, 10:47
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Re: Migros and COOP - Low quality explained...

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I'm lucky enough to have a little corner where I can grow my own salad. It's amazing how much you can grow in a small space. .
Out of interest, what are the dimensions of your space for growing salad and how much do you get?

I' m thinking of doing the same.

Thanks
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  #138  
Old 07.07.2008, 10:47
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Re: Migros and COOP - Low quality explained...

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I think the act of shredding the stuff supermarkets put in plastic bags accounts for why it doesn't have a long shelf life. I wouldn't hesitate to take back stuff that has gone off. I agree where ever you buy them, onions seem to the most risky but luckily Manor supermarché sells them loose most of the time.

no Nev. I was talking about whole lettuce and whole salads... they have brown jelly ends on day 1 in the fridge...
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  #139  
Old 07.07.2008, 12:08
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Re: Migros and COOP - Low quality explained...

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I'm lucky enough to have a little corner where I can grow my own salad. It's amazing how much you can grow in a small space. Once it's taken up and washed and put in a plastic ziplock bag it can last for days in the fridge, especially if you keep the leaves whole. In fact the outer leaves which we remove and throw on the compost heap seem to stay fresher than the the salads we buy from the supermarket. Just goes to show how long some of this stuff in supermarkets has been hanging around before being passed on to the consumer. I think the act of shredding the stuff supermarkets put in plastic bags accounts for why it doesn't have a long shelf life. I wouldn't hesitate to take back stuff that has gone off. I agree where ever you buy them, onions seem to the most risky but luckily Manor supermarché sells them loose most of the time.
The slugs ate all my salad.... the *******s!
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  #140  
Old 07.07.2008, 13:04
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Re: Migros and COOP - Low quality explained...

here´s my little story.
last week at Migros in Embrach I made for the strawberry display - 50% reduction offer. Standing next to me was the Migros lady tidying up the display. When I pointed out that that some of the fruit were covered in green hairy mould she responded by saying "that´s why they´re 50% off!!!!!"
If the staff are prepared to let people buy this stuff then there is no hope for improvement. You just could not expect this to happen in Tesco et al in the UK.
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