Coop Denmark has announced its annual results for the financial year 2022, reporting a loss of DKK 628m (£74.4m).
The group, the second-biggest retailer of consumer goods in Denmark, described 2022 as “the worst year ever” for itself and its independent consumer associations.
Its turnover for 2022 was KK 46.9bn (£5.6bn) excluding VAT, 2% more than in the previous year. However, large investments in a new discount chain and IT platform, coupled with falling customer confidence and changing shopping habits affected the retailer’s performance.
“It is an unsatisfactory result, which comes after a number of good years,” said chair Lasse Bolander. “But 2022 was also the year when we accelerated the investments in our strategy, Fremtidens Coop, which will transform Coop and ensure a simple, efficient and winning Coop with fewer but stronger chains.”
The group invested DKK 750m in price, conversion and roll-out costs for 250 new 365discount stores and the subsequent closure of Fakta, which reported a loss of DKK 651m.
Another DKK1 billion was invested in its new SAP platform, Coop One, which, says Coop Denmark, “will provide significant gains in the coming years”.
One of the factors that impacted the retailer’s results is a decrease in consumer confidence, which Coop Denmark attributed to high inflation and the war in Ukraine. These changes impacted customers’ shopping habits, who opted for cheaper and fewer products. The retailer said it chose not to pass on the costs resulting from supplier price increases in full to its customers.
Coop Denmark launched a new growth strategy earlier this year, which will see it invest DKK4bn over the coming years. The group expects better results for next year but warns that low consumer confidence is here to stay.
“We have had growth in comparable stores of 18% in 365 in 2022,” said managing director Kræn Østergård Nielsen. “far above the discount market as a whole. With victories and top positions in a large number of price tests, we can state that we have gained a much better price image, which is crucial in discount. So we have a good starting point for the next phase, where the goal is to continue the high growth in our turnover and market share in discount with our green chain.
“With large investments in the three chains, with a state-of-the-art IT platform rolled out for all product areas and stores, the strongest own brands and an aggressive focus on responsibility, we will in the coming years become even more attractive to customers, and thus once again grow and win market shares.”