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Cooperative Buying GroupsThe EROSKI Experience
25 February 2012
2
Índice /
0101 About EROSKI
02 How EROSKI sees partnerships
03 Our main partnerships
CONTENTS
04 MONDRAGÓN and the International Year
of Cooperatives
3
About EROSKI01
Índice /
4
EROSKI came into being when nine small, local, independent consumer cooperatives decided to join together.
On its inception EROSKI formed part of the MONDRAGON
cooperative movement, the seventh-largest business group in Spain and which this year celebrates the 50th anniversary of the creation of its first
cooperative.
01About EROSKI
1969, EROSKI S. COOP. IS BORN
5
01About EROSKI
TODAY
> 43,494 employees
> 634,000 consumers
> Turnover of €8bn
> Spain’s third-largest food retail distributor
6
01
BUSINESS AREA105
HYPERMARKETS
485SELF-SERVICE
OUTLETS
SUPERMARKETS
474
170
3
342FOOD
BUSINESS
About EROSKI
7
01
BUSINESS AREA
NON-FOOD BUSINESS
SPORTS AND LEISURE
36
PERFUMERY
281
PETROL STATIONS
59
TRAVEL
218
OPTICIANS
37
About EROSKI
8
01About EROSKI
SALES FIGURES (millions of €)
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
9.000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
9
What sets our consumer
cooperative model apart?
Worker partners and consumer partners have an equal say in the running of the cooperative.
01About EROSKI
10
01About EROSKI
A COOPERATIVE MEMBERSHIP PROJECT
> Average workforce of 43,494 employees, 14,579 of whom are partners.
> Cooperative membership: The objective is for all EROSKI workers to become cooperative members.
> Two new cooperatives to be formed in our Group in March.
11
01About EROSKI
CONSUMER-ORIENTED INITIATIVES
Education and information for healthier and more
responsible shopping choices:
> Consumer rights
> Nutrition and food
> Health and well-being
> The environment and sustainabllity
> Solidarity
> Etc
12
01About EROSKI
CONSUMER-ORIENTED INITIATIVES Healthier EROSKI products and better-informed choices:
> Labels showing the amount of calories, salt, sugar, fat, saturated fat, fibre etc, and featuring colour coding.
> Elimination of artificial trans fats. In 2007 we became the first Spanish retail distribution
company to remove trans fats originating
from partially hydrogenated vegetable oils
from their own-brand products.
13
01About EROSKI
CONSUMER-ORIENTED INITIATIVES
Healthier EROSKI products and better-informed choices :
> Upcoming launch of the Sannia range of delicious and healthy products: lower in salt, sugar and fat or containing special ingredients
(Omega3, fibre, vitamins, etc).
14
The “With You” store
Our model for the future – another step forward in the inclusion and involvement of the consumer partner
01About EROSKI
15
01About EROSKI
Helping consumers lead healthier and more responsible lives, creating a more appealing shopping environment,
and committed to competitive prices.
health andwell-being
communication of personality
adapted-integrated
local market
Improved client-partner
relationship
outstanding fresh
foods
most attractive
price-promotion
16
01About EROSKI
ABOUT THE “WITH YOU” STORE
> A socially responsible store that is committed to the environment: reduced energy consumption, no noise pollution, use of renewable energies, etc.
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01About EROSKI
ABOUT THE “WITH YOU” STORE
Involves the customer, treats them as a partner: > Their interests and concerns are reflected in the “With You” store (feeling
better, losing weight, celebrating local festivities, etc).
> Closer to the customer. More personal service.
> We manage the brand, the store and Eroski itself in line with the customer’s tastes and preferences.
> Best customers will become
partners and play a part in
stores along with worker
partners.
18
Our goal of a “franchised store’
A store based on our main asset – a cooperative formed by workers and consumers.
01About EROSKI
19
01About EROSKI
FRANCHISED STORE: BUSINESS MODEL
> Increased contact between store workers and customers, aim being to get closer to the customer and get to know them better.
> Worker partners or cooperative members have the freedom and power to make decisions and adapt the store to satisfy the needs of their customers.
> Stores are no longer identical outlets in a chain. They become part of the local fabric and adapt to their surroundings.
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How EROSKI sees partnerships02
Índice /
21
02EROSKI and Partnerships
PARTNERSHIPS: WHY AND WHAT FOR?
> Our biggest competitors on the local market are or will be international. This international dimension allows these retail distributors to gain knowledge, economies of scale and increased negotiating capacity.
> The leading manufacturers are international and have greater negotiating power than small- and medium-sized retail distributors.
> Consumer cooperatives do not expand abroad. Our model cannot easily be exported.
> Partnerships with similar organisations are the
international solution for coops.
22
02EROSKI and Partnerships
A
117
9181
7467
5447 42 42 40
31
8
0
20
40
60
80
100
120
140
Cooper
nic
Carrefou
r
Alidis
Tesco
Met
ro
ReweAldi
Auchan
Edeka Lid
lIT
M
Erosk
i
Sales in 2010 (€bn)
EUROPEAN RANKING
Alidis, 3rd in Europe
23
02EROSKI and Partnerships
A
INTERNATIONAL RANKING
**2007 data for Coop, Target, AEON, Coles AND IKEA, 2008 data for Wal-Mart, 2006 data for the rest. Exchange rate used: Euro 1=USD 1.37
277
7860
4630 29 26 22 21 18 9
0
50
100
150
200
250
300
Wal
Mar
t
Carre
four
Met
ro
Targ
et
Inte
rcoo
pAeo
n
Coles
Best b
uyIke
a
Confo
ram
aH&M
Intercoop, 5th in the world
24
02EROSKI and Partnerships
WHO ARE OUR PARTNERS?
Our partners have the following profile:
> Independent. They cannot be bought or sold.
> Not competitors.
> Possess similar values: preferably cooperatives.
> Shared vision of the partnership: strategic alliance.
> Business affinity.
ALIDIS and INTERCOOP are a response
that ensures we will not be competing at a
disadvantage with rivals who have expanded
abroad.
25
Our main partnerships03
Índice /
26
03Main Partnerships
ALIDIS – FOOD MARKET
> European alliance of independent retail distributors, formed by:• Intermarché: 3rd in France• Edeka: 1st in Germany• Eroski: 3rd in Spain
27
03Main Partnerships
ALIDIS – A LONG-TERM PROJECT
Key dates:
> 1998: Intermarché creates Agenor (Geneva)
> 2002: Les Mousquetaires and EROSKI found ALIDIS
> 2005: EDEKA joins ALIDIS
> 2007: The partners all become part of Agenor
28
03Main Partnerships
ALIDIS – STRUCTURE
100%
33.33% 33.33% 33.33%
Strategy
Operational level
29
03Main Partnerships
ALIDIS – OBJECTIVES
> Strengthen the competitive position of each partner.
> Merge purchasing.
> Share information freely on suppliers, raw materials, sales and store management.
> Develop, acquire and share technologies, techniques, systems, programmes and knowledge.
> Engage in joint business ventures.
30
03Main Partnerships
ALIDIS – FRAMEWORK INTERNATIONAL PURCHASING AGREEMENTS
31
03Main Partnerships
ALIDIS – NEGOTIATION OF JOINT PURCHASING
32
03Main Partnerships
ALIDIS – EXCHANGE OF KNOW-HOW
MADRID: 07-04-2011 HAMM: 24-05-2011
Automated platforms. Visita to M-50 (EROSKI) and Hamn (EDEKA)
33
Self checkout systems. Visit to leading centre in ITM self checkout sales
03Main Partnerships
ALIDIS – EXCHANGE OF KNOW-HOW
EROSKI self checkout pilot system Intermarché self checkout system
34
Improvement in own-brand range of products: Showrooms. Presentation of entire MMDD ranges at Geneva. 11 categories presented in Q4 2011 and 11 scheduled for Q1 2012
03Main Partnerships
ALIDIS – EXCHANGE OF KNOW-HOW
35
Other workshops in progress:
> “Green” store
> Organic products
> Promotional marketing and customer loyalty cards
> Category management of a number of sections
> New store formats and concepts
> …
03Main Partnerships
ALIDIS – EXCHANGE OF KNOW-HOW
36
03Main Partnerships
INTERCOOP – NON-FOOD MARKET
> Intercoop represents a group of cooperative retailers
~ Turnover of €40bn~ 9,000 stores~ 200,000 employees~ 18 million members
> We share similar values and ways of doing business, and we also see the safeguarding of “social responsibility in non-food products” as a priority.
Denmark
Norway Sweden Finland
Italy
37
03Main Partnerships
INTERCOOP – NON-FOOD MARKET
Intercoop has been operating in Asia since 1979 as the global sourcing office for Europe’s biggest cooperative retailers.
Hong KongHead office
ShanghaiChina
KarachiPakistan
New DelhiIndia
DhakaBangladesh
Ho Chi MinVietnam
SurabayaIndonesia
38
03Main Partnerships
INTERCOOP – ACTIVITIES
> Market information for partners
> Creation of product ranges:• Own-brand range of each partner• Fantasy brand
> Joint management of suppliers: location, selection, monitoring
> Single negotiating stance with suppliers.
> Group buying of products.
> Joint operating process:• Quality control• Logistics (freight)• Ethical audits
39
Final Conclusions
03Main Partnerships
40
> Partnerships yield significant advantages: economic advantages and better know-how.
> These are essential for cooperatives.
> To achieve significant benefits each partner has to be intensely committed.
- Tactical partnerships: low commitment, low returns.- Strategic partnerships: high commitment, high returns.
> Importance of partner profile (independence and same values and vision).
03Main Partnerships
FINAL CONCLUSIONS
41
Difficulties faced by cooperatives and not by competitors:
> Local and defensive competitive vision.
> Weak leadership.
> Inability to delegate abroad.
> Slowness in making and implementing decisions.
03Main Partnerships
FINAL CONCLUSIONS
42
High potential of partnerships between cooperatives: A European cooperative network oriented towards the health and
well-being of consumers and society can be created.
> This would help us make better purchases.
> Develop better products for the consumer.
> Enhance our know-how.
> Others (joint business ventures and services).
03Main Partnerships
FINAL CONCLUSIONS
43
MONDRAGON and the International Year of Cooperatives04
Índice /
48
www.eroski.eswww.eroski.es
