The Swiss retailer Coop will open a new store concept at the end of May, Swiss newspaper Blick reports. The store, which will reportedly be named after Coop’s vegetarian private label line Karma, will be located at the train station in Zug. Reportedly, the store will feature the Karma products as well as foodservice elements such as lunch offers. Akin to the Karma private label line, the store will target vegetarian, as well as flexitarian customers. According to Coop’s research results, flexitarians do not eat meat at one in three of their main meals on average. For these consumers, personal and health aspects are of greater importance than consideration for animal well-being or respect for the environment.
Karma products do not have the usual ‘veggie’ label on their packaging in order to not only target vegetarians, but also health-conscious customers and those interested in oriental food. The assortment, which comprises around 120 SKUs, has been inspired by recipes from around the world. For customers interested in other convenience food categories, the retailer will open a Coop To Go store above the new Karma store.
The launch of a vegetarian store concept is a novelty in the Swiss retail landscape. To date, no larger chain has chosen to specialise in vegetarian products. Only a few individual independently-run veggie stores can be found in the country. Coop’s main competitor Migros has a partnership with German company Alnatura, who has a strong focus on organic and vegetarian products. It feels like the time is right for a new concept in Switzerland since more and more consumers are interested in a healthier and environmental friendly lifestyle.
While the products sold at Alnatura also include a wide range of meat substitutes such as vegetarian versions of schnitzels and sausages, the Karma assortment focusses on traditionally vegetarian, oriental items such as falafel and couscous. Karma also does not include any “veggie” labels on its packaging. Due to this approach, the private label line has become popular not only amongst vegetarian shoppers but it has also managed to attract the growing group of flexitarian and health-conscious customers. As a result, net sales of Karma increased by 73% in 2016, to CHF40mn (EUR36.5mn).
The fact that Coop is now following in the footsteps of retailers like Tesco with its standalone F&F clothing stores suggests that it intends to continue to get behind the private label line which it launched in 2013. This will not only help Karma to become a brand in its own right, but it will also strengthen Coop’s image as a specialist in the field of vegetarian healthy convenience goods.
We are also curious how Migros will react. These two players – Coop and Migros – dominate the Swiss retail landscape. Given the limited size of the market, the two have had to diversify extensively in order to sustain growth. Alongside a myriad of non-food banners, both retailers are vertically integrated, which has helped market leader Migros to emerge as one of the most innovative retailers in terms of private label. We therefore wouldn’t be surprised if Migros were to follow with a similar concept to Coop’s Karma in the near future.
With contributions from Senior Retail Analyst Denise Klug