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. 01 About EROSKI 1969, EROSKI S. COOP. IS BORN
9 What sets our consumer cooperative model apart? Worker partners and consumer partners have an equal say in the running of the cooperative. 01 About EROSKI
10 01 About 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 01 About 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 01 About 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 01 About 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 01 About EROSKI
15 01 About EROSKI Helping consumers lead healthier and more responsible lives, creating a more appealing shopping environment, and committed to competitive prices. health and well-being communication of personality adapted-integrated local market Improved client- partner relationship outstanding fresh foods most attractive price-promotion
16 01 About 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.
17 01 About 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. 01 About EROSKI
19 01 About 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.
21 02 EROSKI 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 02 EROSKI and Partnerships A Sales in 2010 (€bn) EUROPEAN RANKING Alidis, 3rd in Europe
23 02 EROSKI 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 Intercoop, 5th in the world
24 02 EROSKI 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.
26 03 Main 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 03 Main 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
29 03 Main 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 03 Main Partnerships ALIDIS – FRAMEWORK INTERNATIONAL PURCHASING AGREEMENTS
31 03 Main Partnerships ALIDIS – NEGOTIATION OF JOINT PURCHASING
32 03 Main Partnerships ALIDIS – EXCHANGE OF KNOW-HOW MADRID: 07-04-2011HAMM: 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 03 Main Partnerships ALIDIS – EXCHANGE OF KNOW-HOW EROSKI self checkout pilot systemIntermarché 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 03 Main 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 > … 03 Main Partnerships ALIDIS – EXCHANGE OF KNOW-HOW
36 03 Main 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 03 Main 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 Kong Head office Shanghai China Karachi Pakistan New Delhi India Dhaka Bangladesh Ho Chi Min Vietnam Surabaya Indonesia
38 03 Main 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
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). 03 Main 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. 03 Main 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). 03 Main Partnerships FINAL CONCLUSIONS
43 MONDRAGON and the International Year of Cooperatives 04 Índice /
44 International Year of Cooperatives An opportunity to highlight the strengths of the cooperative model 04 International Year of Cooperatives
45 04 International Year of Cooperatives Institutional statement: The role of the cooperative in contributing to a better world. International Cooperative Conference 2012 ACTION PLAN
46 04 International Year of Cooperatives Institutional statement: The role of the cooperative in contributing to a better world. Publications plan International Cooperative Conference 2012 ACTION PLAN
47 04 International Year of Cooperatives Institutional statement: The role of the cooperative in contributing to a better world. Publications plan International Cooperative Conference External relations plan for institutions 2012 ACTION PLAN
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