KF Annual report 2008

1. Annual report 2008
The consumer cooperative movement shall create
economic benefits, and enable its members through
their consumption to contribute towards sustainable
development for people and the environment.

2. Contents I KF annual report 2008
CEO’s statement 2 Directors’ report 38
KF’s strategic approach 7 Consolidated Income Statement
Group overview 8 for the KF Group 43
Grocery retail sector 10 Consolidated Balance Sheet for the KF Group 44
International outlook 13 Changes in Group equity for the KF Group 46
Cash Flow Statement for the KF Group 46
Grocery retail group 14 Income Statement for the KF
Coop Sverige 14 Cooperative Society 47
Daglivs 20 Balance Sheet for the KF Cooperative Society 48
Mataffären.se 20 Changes in equity for the
KF Cooperative Society 50
Real estate and finance 22 Cash Flow Statement for the
MedMera Bank 22 KF Cooperative Society 50
KF Fastigheter 24 Accounting policies 51
KF Invest 26 Notes 54
KF Sparkassa 26 Auditor’s report 70
Media group 28 Key ratios and definitions 71
Akademibokhandelsgruppen and Bokus 28 Member control 72
Norstedts Förlagsgrupp 30 Consumer societies 74
PAN Vision 31 Work of the Board of Directors 76
Tidningen Vi magazine 32 Chairman’s statement 77
Board of Directors 78
Other companies 34 Group management 80
Läckeby Water Group 34
Löplabbet 34 Sustainability report 81
Vår Gård Saltsjöbaden 35
Contacts 104
KF Gymnasiet 35

3. 2008
The year in brief
• The most important event over the year was when Coop
Sverige, which previously formed part of Coop Norden,
returned to KF as a wholly owned subsidiary at the end of
• Internet store Mataffären.se was launched in April, and KF
acquired three Vi shops over the year. KF took over as
owner of environmental technology company Läckeby Water
2007. In its first year of business within the KF Group, Coop Group (81 per cent) and Löplabbetgruppen (70 per cent).
Sverige reported an operating profit of SEK 153 million
(–110), which is its best result in ten years. Excluding non- • A partnership was initiated with Green Cargo concerning col-
recurring items, the operating profit amounted to SEK 198 lective, cost-effective and environmentally friendly logistics
million. solutions which will considerably reduce the Group’s emis-
sions of carbon dioxide from transportation.
• The KF Group’s net sales amounted to SEK 35,817 million
(26,208), an increase of 37 per cent, due mainly to the fact • A powerful programme of improvements, involving both
that Coop Sverige was integrated into KF and that Daglivs investments and reductions in expenses, commenced at
and several other businesses were taken over. The Group’s Coop Sverige in order to turn profit into long-term profitabil-
operating businesses are reporting a profit of SEK 755 mil- ity. The demand for reduced expenses led to the staff being
lion (594), adjusted for items affecting comparability. The notified that there would be redundancies equivalent to
operating profit for the KF Group overall amounted to SEK 1,000 full-time positions.
380 million (357). The stagnation on the financial markets
have affected profit after financial items, which amounted to • The number of members in the consumer societies contin-
SEK 110 million (476). ued to rise over the year, amounting to more than 3 million.
Coop MedMera reward vouchers with a total redemption
• The consumer cooperatives’ share of the grocery retail mar-
value of SEK 450 million in discounts were returned to mem-
ket for the biggest players remained unchanged at 21.4 per
bers who had taken part in the Coop MedMera Premium Pro-
cent.
gramme over the year.
Key ratios 2008 2007 2006 2005 2004
KF Group
Net sales, ex. VAT, SEK billions 35.8 26.2 24.4 25.2 29.0
Balance sheet total, SEK billions 19.3 20.5 14.8 14.1 13.3
Profit after financial items, SEK millions 110 476 701 715 1,084
Number of sales outlets 440 61 58 56 54
Average number of employees 8,996 1,216 1,175 1,271 1,321
Return on capital employed, % 7.7 5.2 7.2 7.3 11.0
Return on equity, % 1.5 5.8 9.4 9.8 18.6
Equity ratio, % 34.3 31.7 42.9 42.3 40.2
Net liabilities, SEK millions* 1,184 11 –146 190 68
Retail societies
Sales, ex. VAT, SEK billions 16.9 16.2 15.9 15.7 16
Number of sales outlets 413 418 434 444 470
Average number of employees 6,150 6,500 7,200 7,700 8,317
Number of societies, total 48 51 54 58 60
Number of members, thousands 3,130 3,085 3,038 3,000 2,940
* This increase is due mainly to extensive investments over the year in both grocery retail trade and properties.

4. KF I Business report 2008
CEO’s statement
There is no doubt that 2008 will be a year that goes down in history. Few people could have pre-
dicted the fastest, most widespread decline in the global economy for many decades, which led to
large parts of the leading economies tumbling into recession at the end of 2008. However, for the
Swedish retail trade the year as a whole was relatively positive, given the circumstances.
Global recession and a new Like all other companies, the KF tant than ever now to develop a new
approach Group has to adapt to the prevailing cir- approach. Under all circumstances we
Most analysts have a pessimistic view of cumstances. Although the financial situ- are prepared to implement extraordinary
financial development in 2009. It is ation within the Group is good, we have measures if the global crisis worsens still
harder now than it has been for a very to adapt more quickly to the new situa- further over the year.
long time to assess the depth and the tion as regards demand if the economic
scale of the problems in the financial An eventful 2008
markets and their direct consequences KF’s integration of Coop Sverige AB as a
for the real economy. wholly owned subsidiary has gone very
KF’s integration of Coop Sverige
After twelve years of good develop- well. Coop has tangibly improved its
AB as a wholly owned subsidiary
ment, the trend for the Swedish grocery operating profit, and the operating profit
has gone very well.
retail trade will probably turn in 2009, reported for 2008 is its best in more
even though the retail trade is less sus- than a decade. The action programme to
ceptible to the economic cycle than situation worsens significantly in future. improve profitability began over the
many other industries. Above all, this All Group companies have decided upon course of the year with a view to being
applies to the sale of food. However, a or initiated change programmes of vary- implemented fully by 2010 at the latest.
shift towards what are known as value ing sizes. In particular, Coop has an Work on reducing expenses by at least
concepts has already been perceptible. improvements programme that is more SEK 1.5 billion while at the same time
At the same time, the development of extensive than has been the case in doubling investments in the shop move-
environmentally friendly products is many years. The main reason for these ment is going according to plan.
positive. High food quality is generally measures is not the stagnation in the Coop Norden is continuing as a pure
always something which Swedish con- economy, but the aim of adapting the purchasing company, Coop Trading A/S,
sumers appreciate, but when times are company’s expense levels to the level at a Nordic level, and in addition it is
hard views on the pricing of various con- experienced by the very best of our com- now a development centre for our own
cepts are more crucial to households. petitors in the industry. Our aim is also private brands. The Finnish consumer
Recessions have a tendency to be rein- to streamline and develop the manage- cooperative movement, SOK, became a
forced still further by psychological ment and control of operations. co-owner over the year. Coop Trading is
effects such as expectations of the econ- The KF Group is in a good position to one of the biggest retail purchasing com-
omy. Households and companies there- face the future, even though macroeco- panies in the Nordic region, and over
fore tend, quite naturally, to be more nomic conditions are weaker than they time this should help to further improve
restrained and maintain a short-term have been in many years. This change of conditions for purchasing and permit
view. circumstances means it is more impor- faster development of our own private
labels.
2

5. The KF Group is in a good position to
face the future, even though macroeco-
nomic conditions are weaker than they
have been in many years.
Lars Idermark
President & CEO
The company acquired some more Vi ments have been achieved in purchasing KF Fastigheter has had one of its best
shops over the year, which are working and logistics as well, and this is particu- results in a number of years, with suc-
according to the business model to com- larly important in the grocery retail sector. cessful sales. The rate of investment in
bine the resources and benefits of scale In terms of sales and profits, the new shopping centres remains high.
of the Group with entrepreneurship. media companies have not developed Several other Group companies, such
Buying food online via Mataffären.se entirely in line with expectations. This is as Läckeby Water Group, Vår Gård Salt-
has exceeded our expectations and is due mainly to major necessary changes sjöbaden, Tidningen Vi, MedMera Bank
growing rapidly. Coop Sverige’s super- internally and considerably worse sales et al. have been able to demonstrate very
market segment has had one of its better development than in previous years. good development in terms of profits
years in a very long time, with very good Moreover, the entire industry has been and business as a whole. Over the year,
profitability, and it has even taken mar- hit by a downturn. Only online book KF acquired 70 per cent of Löplabbet-
ket shares. Coop Forum has also imple- sales have continued to demonstrate gruppen, which is also developing well.
mented a radical change and taken on good growth. The media companies The Group’s asset management has
measures to counter remaining sources now are permeated by a radical new had a taste of the very adverse develop-
of loss. All hypermarkets will be mod- approach, with greater coordination ment of the financial market. Despite
ernised by the end of the first six months between Group companies. KF is the the fact that the Swedish stock exchange
of 2009. Radical changes are taking biggest bookseller in Sweden, and obvi- has fallen by more than 40 per cent,
place at Coop Bygg and a new strategy is ous synergies within the Group will be assets management has not fallen by
being implemented. Major improve- realised gradually. more than 4.9 per cent, due to a cautious
3

6. KF I Business report 2008
investment philosophy which has been benefits for business, benefits for mem- mation. The decision to embark upon a
effective in the prevailing market situa- bers, and benefits for society. New finan- more in-depth partnership with Green
tion. cial targets have also been set for the Cargo in respect of rail transport and
The operating profit for the KF Group Group. The objective is to achieve a 14 logistics will be followed by a number of
for 2008 is entirely acceptable, given per cent return on equity over an eco- similar initiatives in the future. The cor-
that business has been affected by both nomic cycle and satisfactory equity/ porate culture will also undergo change.
the reduction in demand and the fall in assets ratio. The Group currently has a Straightness, clarity, professionalism,
good financial position. With the new sound business practice and a well
Group strategy and clear financial objec- defined culture of consistency will all set
tives, our course is set clearly for the the tone. To this will be added the val-
The future is something we coming years. ues which constitute the basis for the
can create together with good New forms of control and monitoring operations of the consumer cooperative
staff, clear managers, in-depth for the Group’s sustainability work have movement.
customer relations and also been introduced over the year. Our Our rate of investment will remain
long-term owners. aim is to maintain a high level of high. Acquisitions, partnerships and
responsibility within all our operations; divestment of operations will provide
the stock exchange. In addition, profit is financially, environmentally and socially. the means for reinforcement of the long-
affected by what are known as structural At the same time, the Group must be a term targets of the Group.
expenses for implementation of planned leader in the field of sustainable develop- Important steps have been taken
changes which aim to bring about good ment in the grocery retail trade. Our towards changing and renewing opera-
profitability and growth in a few years' overall sustainability strategy is focusing tions over the last few years, and further
time. One strength is that cooperation on initiatives for reducing environmen- measures will be implemented in 2009.
within the overall consumer cooperative tal impact, further developing our pro- Therefore, we have every reason to main-
movement has been deepened over the file with regard to organic products and tain a positive attitude towards the con-
year. This tangibly increases our strength reinforcing our partnerships with Koop- sumer cooperative movement’s future
on the market in future. The number of eration Utan Gränser and Vi-skogen. opportunities as an interesting alterna-
members continued to increase over the tive to other business models.
year and now amounts to more than 3 Continued renewal and a fast pace The future is something we can create
million, which gives us vital power in in 2009 together with good staff, clear managers,
our work on developing our special fea- The KF Group is undergoing extensive in-depth customer relations and long-
tures as a corporate group owned by its changes. Some measures are so radically term owners. Development is not
members. With Coop MedMera reward different compared to before that both defined by fate; it is decided mainly by
vouchers, SEK 450 million was returned managers and staff alike are facing major our own abilities, will and ambition. We
to members in redeemed value. challenges when it comes to taking on believe in the strategies we have selected,
board these necessary changes. While and so we feel a sense of optimism.
Strategy for adding value the Group is cutting back on expenses,
In 2008, the Board of Directors has the business model for several Group
decided on a new Group strategy for subsidiaries is being altered. Coop Sver- Lars Idermark
adding value with three cornerstones: ige is undergoing the biggest transfor- President & CEO
4

7. Organization chart MEMBERS/OWNERS
(More than 3 million members over 48
consumer societies)
GENERAL MEETING
AND BOARD OF DIRECTORS
KOOPERATIVA FÖRBUNDET
KF GROUP
Grocery retail group Real estate and finance Media group Other companies
Coop Sverige KF Fastigheter Norstedts Förlagsgrupp Vår Gård Saltsjöbaden
– Coop Konsum MedMera Bank Akademibokhandeln KF Gymnasiet
– Coop Nära KF Invest Bokus Läckeby Water Group
– Coop Extra KF Sparkassa PAN Vision Löplabbet
– Coop Forum Tidningen Vi magazine KF Shared Services
– Coop Bygg KF Revision
Daglivs
Mataffären.se
Cilab
1 “The consumer cooperative movement
shall create economic benefits, and
enable its members through their con-
sumption to contribute towards sus-
tainable development for people and
the environment.”
2 Value base
• Confidence in our distinctive nature as a
company owned by its members
• Influence
• Member ownership
• Concern for people and the environment
• Honesty
3
• Innovative thinking
Benefits for business, benefits for
members, and benefits for society
form the basis for KF’s strategic
work.
Benefits for business Profitable, value-
profiled grocery retail trade.
Benefits for members Inexpensive,
sustainable goods/services and a clean
conscience.
Benefits for society Contributing
towards sustainable development for
people and the environment.

8. KF Fastigheter building sustainable shopping centres
KF Fastigheter’s biggest project to The Bromma area is planned for completion by 2012 and
will have grown by then to around 100,000 sq m. This
date got off the ground in 2008 project is permeated by sustainability and environmental
with the conversion of Hangar 3 at awareness. KF Fastigheter is working to develop, plan and
the Bromma Center trading area produce buildings for the food sector which have
extremely low warmup costs.
which took place in June. A heat pump which will use the excess heat from Coop
is being installed at the Bromma Center. There will also be
a manned goods delivery area at the Bromma Center in
2010. This will allow vehicles to unload more quickly,
result in fewer queues and hence lower carbon dioxide
emissions. In addition, staffing the facility from the early
morning onwards will allow goods to be unloaded before
the shops open, which will allow goods to be transported
when there is less traffic.

9. KF’s strategic approach
KF is a federation of consumer cooperatives and a retail group, with groceries as its core business.
Members and customers must be able to buy value-for-money goods of the required quality all over
Sweden. This requires consumer cooperative retail to be competitive and profitable. Everything we
do has to stem from the cooperative value base, which is founded on the concept of economic bene-
fit and sustainable development. The basis for creation of profitable, value-profiled grocery retail
trade has been reinforced significantly on account of the fact that Coop Sverige has been consoli-
dated in KF since the end of 2007 and is run as a wholly owned subsidiary.
Group strategy for enhanced value growth
• All our business areas must achieve profitability • Developing and making the most of staff skills
on a par with the market. Enhanced management and greater professional expertise are
Acquisitions and partnerships may enhance our opportunities to key to our initiative for development for managers and staff.
create greater efficiency, growth and profitability. Our core busi- Maintaining an ongoing overview of management and control will
ness must be given priority, and other business must be regularly create a coordinated, efficient group.
tested and evaluated in respect of financial returns and risk profile.
• Values and profiles clarified to reinforce
• Focus on core business – grocery retail trade Group brands
Investments in our core business, Coop Sverige, will be given pri- The Coop brand is a “master brand” which must represent suc-
ority over the next few years. The operations of the consumer cessful, profitable, innovative and well profiled retail operations.
cooperative movement must meet the needs of our members/ Efficient, reliable communication will be an important instrument
owners in their everyday consumption. for building a new corporate culture.
• New business opportunities are being created in • At the forefront of new approaches
which benefits for business, benefits for members KF and the consumer cooperative movement have a tradition of
and benefits for society can interact. leading the way when it comes to new approaches and innova-
tion. We will now take back this leading position.
The cooperative form of company, where the owners are members
are customers, must be developed and modernised. The special
• Communication and influence
nature of the cooperative movement must be emphasised by
means of improved offers for customers and members, which in The consumer cooperative movement will use active communica-
turn will lead to increased profitability for the entire organisation. tion and new forms of influence to develop and modify itself as a
member-owned company. Its unique form of ownership will be uti-
• Increased cost-effectiveness through constant lised as a competitive advantage.
efforts to improve
• Greater cooperation with the rest of
The Coop Sverige improvement programme is being imple-
mented in order to achieve efficiency and cost levels which can the consumer cooperative movement
match up to those enjoyed by the best of our competitors. Simi- Improvement work at Coop Sverige is having positive effects on
lar measures are also being implemented for other operations, the consumer cooperative movement as a whole. Further syner-
with the media companies being given high priority. gistic opportunities can be exploited in order to achieve greater
efficiency and good profitability for the entire consumer coopera-
• Leading player in the field of sustainable tive movement.
development – green growth
Our environmental strategy will be integrated in our business
model, and the consumer cooperative movement will retain and
develop its leading position in the field of sustainable develop-
ment on commercial grounds.
7

10. KF I Business report 2008
Group overview
KF is a retail group, and the grocery retail trade forms its core business. The property and finance
companies are also active in the grocery retail trade, but they also operate on other markets. The
media group includes a range of companies with their own strong brands. The Group is also home
to a number of companies with different business approaches, as well as companies offering
internal services.
Grocery retail group
Operations Coop Sverige works with the grocery retail trade and Daglivs is situated in Mataffären.se is a retail
– together with the retail societies – is responsible Kungsholmen, Stockholm store which uses the
for 21.4 per cent of the Swedish grocery retail mar- and is one of the biggest, Internet as its sales outlet
ket for the six biggest players. Cilab (Coop Inköp och most successful food and offers a complete
Logistik AB) is responsible for purchasing for Coop stores in Sweden. Almost range of groceries for
Sverige and the retail societies. International purchas- 13,000 customers visit delivery in the Stockholm
ing takes place via Coop Trading and Intercoop. the store every day. area.
Key ratios
Net sales SEK 31,004 millions SEK 478 millions SEK 27 millions
Average number of employees 7,318 109 26
Find out more on p. 14 p. 20 p. 21
Real estate and finance
KF Invest KF Sparkassa
Operations MedMera Bank manages KF Fastigheter manages KF Invest is the Group’s KF Sparkassa offers mem-
the Coop MedMera Pre- a real estate portfolio in financial function, and bers of the consumer coop-
mium Programme and excess of SEK 6 billion manages KF’s financial eratives savings services
publishes and handles and works with develop- assets as well as dealing at competitive interest
the cooperative move- ment and renewal of with the financial expo- rates. Around 90,000
ment’s 3.5 or so million store networks, mainly sures to which the Group members have accounts
Coop MedMera cards. for Coop Sverige and the is subject on account of with Sparkassan.
retail societies. its operations.
Key ratios
Net sales SEK 305 millions SEK 560 millions Deposits SEK 3.8 billion
Average number of employees 53 93 8
Find out more on p. 22 p. 24 p. 26 p. 26
8

11. Media group
Akademibokhandelsgrup- Bokus sells books and Norstedts Förlagsgrupp PAN Vision Group is one Tidningen Vi is a maga-
pen has 61 stores all over other media online. It publishes some 500 new of the leading Nordic dis- zine about society and
Sweden and is responsible sells a wide range of titles each year: fiction, tributors in digital home culture which is published
for more than 40 per cent books, covering some non-fiction, books for chil- entertainment and has twelve times a year. The
of the book trading market 3.5 million titles pub- dren and young people, three main markets; com- company also publishes
and almost 15 per cent of lished in countries such dictionaries, audiobooks puter games, films and Vi Läser magazine, which
the total book market in as Sweden, the UK, the and games. This business peripherals for computer specialises in books and
Sweden. USA and Germany. is collected together games and computers. reading.
under the publishing
houses Norstedts and
Rabén och Sjögren.
SEK 1,513 millions Part of Akademi- SEK 500 millions SEK 1,406 millions SEK 25 millions
573 bokhandelsgruppen 174 214 13
p. 28 p. 29 p. 30 p. 31 p. 32
Other companies
KF Revision KF Shared Services
Läckeby Water Group Löplabbet (70%) is Scan- Vår Gård Saltsjöbaden is a KF Gymnasiet offers a KF Revision works KF Shared Services
(81%) is a civil engineering dinavia’s leading chain conference facility which broad economic educa- mainly with internal is an internal service
company which works for running shoes and acts as a meeting place tion with emphasis on audits within the and skills company
with water and effluent running accessories, for companies, authorities trading, finance and man- entire KF Group. which provides IT,
treatment, as well as the with 13 stores of its own, and organisations. This agement and close links HR and finance ser-
production of biogas from three franchise stores facility is unique thanks to between theory and prac- vices as well as
organic waste. The com- and an online store. its attractive location and tice. internal services to
pany also supplies purifi- art collection. KF and KF’s subsidi-
cation products, services aries.
and operating services.
SEK 537 millions SEK 12 m (fr o m 2008-10-27) SEK 54 million SEK 18 millions
177 62 37 20 6 76
p. 34 p. 34 p. 35 p. 35
9

12. KF I Business report 2008
Grocery retail sector
The Swedish grocery retail market u The transformation of the grocery cent at current prices to SEK 587 billion
has undergone some major retail market has meant that the number in total. If we take into account price
changes over the past few years. of shops has fallen by 40 per cent over changes and calendar effects, develop-
More and more sales are taking the last 15 years, while at the same time ment remains at 1.3 per cent. Develop-
place in hypermarkets and discount the average shop area has increased by ment in the grocery retail trade was
stores. Their share of grocery retail 150 per cent and the average net sales strongest, which was up 5.7 per cent at
sales has increased from around per shop have more than doubled. current prices, while trading in con-
10 per cent in 1990 to more than New outlets have come into being sumer durables rose by just 1.5 per cent.
25 per cent in 2008. A number of over the past few years, such as online In 2008, price increases among suppliers
new international hard discount stores and subscriptions to goods, but resulted in an increase in turnover in the
players have entered the market in this development is still in its infancy. grocery retail trade, but with limited
the 2000s. Their market share is Ongoing industry slippage between res- volume growth.
increasing, but it is still only a few taurants and grocery retail sales means The economic downturn and credit
per cent of the total market. The that more and more ready meals are crunch that affected the world – and
smaller, traditional convenience being sold in convenience stores, while Sweden as well – in the latter half of
stores are still responsible for at the same time eating out and fast food 2008 hit sales of consumer durables
are increasing, at the expense of cooking hard, but they had less of an effect on
almost half of all sales, and their
at home. groceries. However, price tends to take
decline has slowed over the past
on increasing importance in an eco-
few years.
Size and growth nomic downturn, even for groceries.
As welfare has increased in Sweden, less
and less household money is being spent Weak forecast for 2009
on basic needs such as accommodation In its economic forecast in December
and food. Of total private consumption, 2008, Handelns utredningsinstitut –
groceries for around 17 per cent. The HUI – made a massive reduction in its
amount spent on food is one of the ele- earlier forecast for the retail trade in
ments which, in percentage terms, has 2009. According to HUI, sales in the
grown the least over the last decade. Sta- retail trade in volume terms are expected
ble price development of food, often to remain unchanged compared with
below the general rate of inflation, has 2008. However, at current prices an
contributed to this. At the end of 2007 increase in sales of 0.5 per cent is
and throughout 2008, however, the expected due to price increases. HUI is
price of food rose again. The Swedish anticipating slightly higher growth for
retail market demonstrated continuing the retail trade in 2010.
growth in 2008 and increased by 3.3 per
10

13. Environmentally products
produced fairly
Änglamark is Coop’s own range of goods which are organic, Fairtrade,
According to a survey of Swedish environmentally friendly and suitable for people who suffer from allergies.
consumers, Coop Änglamark is The purpose of Änglamark is to promote sustainable consumption in
which the health, environment and ethical perspectives of individuals are
perceived as the most environ- central cornerstones. This range includes organic products which are cul-
mentally friendly brand. tivated without chemical pesticides or artificial fertilisers, and meat and
dairy products from animals who have spent time outdoors and been
allowed to eat organic feed in a non-stressful environment.
Goods also have to be manufactured under fair conditions, which
means – for example – that people working in Third World plantations
should not have to be exposed to pesticides that are banned in Sweden.
Änglamark currently carries a range of some 200 products.

14. KF I Business report 2008
The weakest development is anticipated Fifty or so new stores were established in and upgraded stores, equivalent to
for branches in the consumer durables 2008, Netto and Coop being responsible around SEK 835 million.
trade, while the grocery retail trade is for most of them.
expected to undergo weak but stable Trends
development over the coming two years. Market position of the consumer Four long-term trends are often cited
cooperative movement both in Sweden and internationally as
Market players Competition was still intensive in the regards the grocery retail trade; conven-
During the economic prosperity of grocery retail trade, and the market ience, health, indulgence and responsi-
2006–2007, the smaller convenience share for the consumer cooperative ble/sustainable development. The con-
stores underwent positive development movement among the biggest players venience trend often focuses on saving
after having previously been condemned remained unchanged at 21.4 per cent. time such as by means of fast food,
by analysts. As a consequence of the eco- The KF grocery retail group represents ready meals and shopping online. The
nomic downturn, however, price has around 55 per cent of the turnover for health trend has resulted in – among
taken on greater importance, and so dis- the consumer cooperative movement’s other things – increased sales of whole-
count store chains and hypermarkets are retail trade. The retail societies represent grain products and fruit and vegetables,
developing more strongly than other 45 per cent. while at the same time light products
store types. Changes are also taking Coop’s market share has been falling have seen an enormous decline due to
place on the local markets. The coopera- for a long time now. Within the KF gro- changes in dietary advice. The fact that
tion movement is traditionally strong in cery retail group, therefore, extensive food and drink have taken on an
Northern Sweden, while companies such work has been done on renewal and effi- enhanced status as a means of indul-
as Bergendahls, Netto and Lidl are ciency over the last couple of years in gence can be seen in the increase in sales
strong in the southern parts of the coun- order to increase profitability and mar- of various kinds of premium products,
try, as is Axfood in West and East Göta- ket shares for the cooperation. Work such as luxury chocolate, exclusive olive
land. continued in 2008 and involved – oils and hand-made ice cream. The trend
Now companies are moving, which among other things – emphasis on towards sustainable development
means that chains are focusing on geo- increased sales and cost reductions. Stra- appears to involve customers’ increased
graphical areas where they previously tegic investments are also still continu- interest in climate smart food and the
held weak positions. The rate of estab- ing in the form of new establishments strong development of Fairtrade prod-
lishment has been high in the grocery and by repairing and modernising exist- ucts, for example.
retail trade throughout the 2000s, with ing stores. Over the year, Coop has The ongoing economic downturn is
around 60–70 new stores each year. implemented major investments in new highly likely to weaken or modify these
trends, at least temporarily. The credit
crunch is benefitting stores and products
Convenience goods trade, the six leading players that are perceived as offering value for
2008/(2007)
money, such as discount stores and pri-
vate labels. At the same time, there are a
number of analysts who reckon that
Ica Cooperative movement
50% 21.4% (+/−0) these general trends are so strong that it
(−0.3) is more a matter of adapting business to
Netto
1.9% (+0.4) meet these trends in a way which people
Lidl perceive to offer value for money. One
2.8% (+0.2)
Axfood Bergendahl interpretation is that demand can be
16.1% (+0.2) inc. Vi stores said to be more and more hourglass
7.8% (−0.5)
shaped, with emphasis on both premium
Source: Fri Köpenskap and KF products and discount products. The
mid-price segment, then, is the one that
will see the most reduction.
12

15. International outlook
The grocery retailing trade still differs widely between the Western world and developing countries. At the same
time, the grocery retail trade is becoming ever more worldwide, with a limited number of international groups
ever increasing in size. The 15 biggest grocery retail players are responsible for more than 30 per cent of total
turnover in the industry. With benefits of scale, not least as regards purchasing, the international players often
have cost benefits compared with smaller local shops or chains. The consumer cooperative grocery retail trade
traditionally holds a strong position in the Nordic countries, and development has been positive in other parts of
Western Europe as well over the past few years.
u Four major corporate groups dominate ment has been particularly strong in Fin- Cooperation progressing in the UK
the international grocery retail market. land, where market shares in the grocery After many years of stagnation, the con-
American company Wal-Mart is the big- retail trade have grown enormously and sumer cooperative movement in the UK
gest company in the world and holds a now amount to more than 41 per cent. In appears to be making progress. With a
dominant position in the USA with a Denmark and Norway too, the consumer proud history as the homeland of cooper-
turnover of USD 375 billion, of which 24 cooperatives have undergone growth, ation and its strongest foothold, the lack
per cent takes place in 13 countries out- with market shares of 37 and 24 per cent of collaboration and renewal in the 1960s
side the USA. French company Carrefour respectively. and 1970s caused a gradually declining
is established in 30 countries and has a In Switzerland, two competing cooper- trend. In early 2000, an external com-
turnover of USD 113 billion, of which 54 ative grocery retail players – Migros and mission was tasked with suggesting meas-
per cent takes place outside France. Brit- Coop Schweiz – dominate, and together ures for modernising cooperation. A
ish company Tesco has a turnover of they cover almost half of the total grocery number of topics raised in this proposal
USD 95 billion, of which 27 per cent retail market. On the Italian market, were better internal cooperation, clearer
takes place in 13 countries outside its Coop Italia is one of the few major play- systems for control and monitoring, a
own domestic market, and the German ers, with a market share of 17 per cent. In uniform brand and commercialising the
Metro group has a turnover of USD 87 the United Kingdom and Spain, the special nature of cooperation. At the same
billion, 60 per cent of which is outside cooperation holds a relatively small part time, the two biggest societies were
Germany (figures for 2007). of the market, but development is strong. merged to form the Co-operative Group,
Dutch company Royal Ahold, which is Acquisitions and positive sales develop- which became the dominant society. This
a co-owner of Ica, is the eighth biggest ment in both countries have led to con- was the start of a strong conversion of the
grocery retail group worldwide. The big siderably increased market shares, 8 and cooperation, which is now starting to
players have opted mainly to expand into 12 per cent respectively. bear fruit.
the growing markets in Asia and Eastern There have been certain established In 2007 United Co-operatives, the big-
Europe over the past few years. partnerships in respect of cross-border gest remaining society, was merged with
purchasing for a fairly long time now. the group; and the Co-operative Group
Consumer cooperative movement Intercoop, which is owned by six national became the biggest consumer society in
internationally consumer cooperative movements and the world. In 2008, the group bought out
The consumer cooperative movement is works with the purchasing of non-food one of its competitors – Somerfield – and
strong mainly in Western Europe, goods in Asia, is one example of an inter- their market share increased from 5 to 8
although it is significantly large in certain national purchasing partnership. Coop per cent at a stroke.
other countries as well, such as Japan and Trading, where the Nordic countries The grocery retail trade within the
Canada. After a stagnant development in work in partnership for certain interna- Co-operative Group has now seen posi-
many countries in the 1990s and early tional purchases and the development of tive sales growth for 12 quarters in a row,
2000s, the consumer cooperative grocery private label products, is another. In some and despite the lack of discount stores
retail trade has developed positively over of the former Eastern Bloc states, the and hypermarkets in the economic down-
the past few years. In the Nordic region, consumer cooperative movement accord- turn, sales are now increasing by more
the consumer cooperatives have tradition- ing to the Nordic model has started a col- than for the market overall.
ally held a strong position. Its develop- lective purchasing company so as to be
able to reduce its purchasing costs.
13

16. KF I Business report 2008
Grocery retail group
As of the end of 2007, the national grocery retail trade that had been part of Coop Norden returned to KF in Sweden.
This means that Coop is now a wholly owned subsidiary of KF and forms the core of the Group’s grocery retail
group. Other companies are the Daglivs store and the Internet-based Mataffären.se, both with the Stockholm
region as their market. Cilab is responsible for purchasing and logistics, and Coop Trading is responsible for inter-
national procurement and own-brand development. Intercoop Ltd is a buying office of non-food items in Asiatic
countries. This company is co-owned with the Spanish and Italian cooperative movements via Coop Trading.
Coop Sverige
u Coop Sverige runs grocery retail trade used to be part of Coop Norden, but staff were notified that there would be
in chains such as Coop Konsum, Coop since the end of 2007 it has been inte- redundancies equivalent to 1,000 full-
Extra, Coop Nära, Coop Forum and grated in the KF Group as a wholly time positions. SEK 500 million will be
Coop Bygg. Coop must use its moti- owned subsidiary. saved by means of cutbacks and a more
vated, committed staff to offer members efficient organisation.
and customers a broad range of products Positive development Profitability is to be increased over the
so that efficiency, price, quality, service Over the past few years, Coop Sverige next two years, mainly by continuing to
and consideration make the company’s has achieved enormous performance adapt expenses to the same levels as
ranges competitive. development and is showing a positive those implemented by our biggest com-
Together with the retail consumer result for 2008; a figure which is also the petitors.
societies, Coop accounts for 21.4 per company’s best in ten years. Compared
cent of the grocery retail market for the with 2007, operating profit is up SEK Store development
biggest players in Sweden. Coop Sverige 263 million and amounted to SEK 153 While savings and streamlining are
million. Excluding non-recurring items, being implemented, Coop Sverige is
the operating profit amounted to SEK looking at the same time to the future
198 million. This improvement was through extensive investments in new
Coop Sverige
mainly due to a reduction in personnel stores, as well as renovating and convert-
Board of Directors: Chairman
Lars Idermark, Håkan Ahlqvist,
and purchasing expenses. Sales rose ing existing units. Four new Coop
Eivor Andersson, Johnny Capor, from SEK 29,322 million (pro forma) to Forum stores, six Coop Extra, one Coop
Knut Faremo, Mats Lundquist, SEK 31,004 million. Nära and seven Coop Bygg stores were
Jan Sundling, Elisabeth Andersson
opened in 2008.
(trade union representative),
Frank Hjort (trade union representa- Emphasis on streamlining Investments in the alteration and
tive), Rose-Marie Borgström (trade After a fairly long period of weak eco- renewal of stores amounted to around
union representative), Lennart Wallkulle nomic development, with falling sales SEK 835 million over the year.
(trade union representative)
and negative operating results, an exten- The conversion to more attractive,
CEO: Karl Wistrand
Sales ex. VAT: SEK 31 billion
sive improvements programme was more rational stores and hypermarkets
Operating profit: SEK 153 million
introduced in the latter half of 2008. are also reinforcing opportunities for
Average number of employees: 7,318 This programme includes all parts of the greater profitability and competitiveness.
organisation and involves both financial Great emphasis is also placed on contin-
cutbacks and aggressive strategies. uing to develop established store con-
Expenses are to be reduced by SEK cepts. Stores must be modern and attrac-
1,500 million by 2010. Among other tive, and have an ecological profile. A
things, we will be reducing the number number of stores underwent redesign
of staff we employ, and over the year over the year, including Coop Avenyn in
14

17. ”
Coop must be the obvious choice for environmentally
aware customers who care about how goods and services
are produced, and for customers who strive to
maintain healthy habits.
Stores and hypermarkets
Coop Konsum
Value-for-money goods, top quality fresh goods and also Sweden’s broadest range of
organic options are all part of what makes Coop Konsum a healthy business. These stores
also offer inspiration for food and recipes which bear the Keyhole label and lists of nutri-
ents. 169 stores.
Coop Extra
Coop Extra aims to be the best food store in each location. Customers must find it easy
and straightforward to shop here, with great ranges of products at great prices. 36 stores.
Coop Nära
Coop Nära is all about speed, convenience and simplicity. These are local stores, with gen-
erous opening hours and good ranges of products. 98 stores.
Coop Forum
Customers should be able to find everything under one roof at Coop Forum. The hyper-
markets that offer a broad range of goods, with emphasis on foods, can often be found
next to major commercial centres. 42 hypermarkets.
En plats för idéer och smarta affärer
Coop Bygg
Coop Bygg offers a broad range of do-it-yourself and gardening goods. The stores are well
stocked and offer low prices. 32 units.
Daglivs
Stockholm store Daglivs is one of the biggest, most successful food stores in Sweden. This
store has a range guarantee, which means that customers can order and buy more or less
anything they like.
Mataffären.se
Mataffären.se is an online store which offers a complete range of everyday commodities for
home delivery in the Stockholm region.
In addition, there are 413 stores and hypermarkets within the retail societies.
15

18. KF I Business report 2008
Gothenburg, which won the “Store of partnership was entered into with Green city stores. A self-scanning concept has
the Year” award as part of the Stora Cargo, which will relate initially to rail been developed by means of fast self-
Dagligvarupriset (Major Convenience transport. This will involve a reduction service checkouts, mainly in the hearts
Goods Prize), established by Fri Köpen- in Coop’s impact on our climate by of major cities, where customers often
skap and Movement. around 10 per cent and remove 120 buy only a few items at a time and are in
trucks from the roads between Helsing- a hurry.
Environmentally friendly logistics borg and Umeå every working day. The Coop MedMera card and the cus-
solutions tomer database are important tools for
The improvement work will also include Efficient purchasing enhancing our offers to members, and
a review of purchasing and logistics The entire consumer cooperative move- these will be developed further. Custom-
functions. These have undergone con- ment works together via the collective ers who are members of the consumer
stant improvement over the past few purchasing company Cilab, Coop Inköp cooperative movement are offered a
years, and delivery reliability to stores och Logistik, which is responsible for range of benefits and discounts thanks
has increased. national purchasing for Coop Sverige to their membership.
KF and Coop have signed the trade and the retail societies.
and industry call for reduced carbon Coop Norden was phased out at the Market communication
dioxide emissions, which involves prom- end of 2007. To make the most of the Coop Sverige communicates actively
ising to reduce emissions by 30 per cent benefits of collective Nordic purchasing, with its customers and members by
by 2020. A major step was taken towards the procurement company Coop Trad- means of campaigns and recurring activ-
the target in December 2008, when a ing was launched by the owners of the ities. Market communication will allow
former Coop Norden – KF, FDB in Coop to reinforce and clarify its profile
Denmark and Coop NKL in Norway. as a modern, attractive grocery retailer
The Finnish cooperative movement SOK with a range of products and services
New stores in 2008: also came on board last year. Coop which meet customers’ needs and wishes
Trading are also co-owners – together and are at the cutting edge of develop-
Coop Forum
with the cooperative movements in ments as regards organic and environ-
Häggvik, Sollentuna Spain and Italy – of Intercoop Ltd, mentally friendly goods. Coop also
Kungsbacka which deals with purchasing non-food states its commitment on issues relating
Stora Bernstorp, Malmö
goods in Asia. to consumption and sustainable devel-
Västberga, Stockholm
opment.
Coop Bygg Technology to simplify everyday life Besides traditional channels such as
Enköping
Technical development is continuing, newspapers and TV, Coop is also using
Eskilstuna
Katrineholm and Coop Sverige is constantly working the Internet to communicate with its
Kungsbacka to develop new products and services to members and customers. The number of
Ludvika enhance the ranges on offer to custom- activities on the website and visitors to
Mariestad
Ulricehamn ers. The cooperative movement was the the site has increased over the year. The
first company to introduce self-scanning service for searching Coop’s own recipes
Coop Extra checkouts for customers buying a lot of is very popular. Recipes can also be
Bulltofta
Falköping
goods. Similar solutions have also been found in folders and brochures set out in
Katrineholm launched over the year for customers in the stores. Mersmak magazine is pub-
Ludvika lished eleven times a year and is highly
Mariestad
Nyköping
Coop Nära
Örebro
16

19. appreciated by its readers. This magazine Sustainability in stores The Differ branding agency has car-
has a broad circulation and around a Sustainable enterprise is an important ried out a survey among Swedish con-
million copies of each edition are pub- part of the Coop Sverige business con- sumers regarding how environmentally
lished. In 2008, a cooperation took cept. The consumer cooperative move- friendly brands on the Swedish market
place with Barnens Egen Matskola, ment was the first organisation in the are considered to be. Spontaneously, the
where some 4 000 pupils from grade 5 industry to develop products and serv- majority of people who took part in the
were able to learn how to cook healthy, ices for sustainable consumption. Coop survey thought that Coop Änglamark
nutritious food. has offered a large number of organic was the most environmentally friendly
products in its stores for many years brand, and in 2008 Coop was named
Coop Membership Panel now. In addition, all its stores received the most environmentally friendly chain
The Coop web-based Membership Panel KRAV accreditation in 2008, which in the industry.
provides the company with a new, effec- requires a large range of KRAV-labelled
tive way to communicate with its mem- (Swedish certification scheme for Successful platform
bers. Coop has carried out a number of organic products) products, among other Coop Sverige has stores in good retail
surveys over the year in which members things. locations. Improvements made to the
have been asked to provide their views operation of stores and hypermarkets, as
on various issues. The results from the Broad range of products well as sharpened offers and prices
Membership Panels are collated in the Coop aims to appeal to a broad group of through the Coop MedMera reward
Coop report, which is presented at the customers with all kinds of different scheme, are enhancing competitiveness.
annual Coop day to which journalists requirements and varying financial Coop Sverige represents ecology and the
and other formers of public opinion are means. Our aim is to be able to meet the environment, which must permeate eve-
invited. The Stora Änglamarkspriset wishes and needs of all customer groups. rything it does. Work is ongoing now to
award is also presented on Coop day. Our stores offer a broad range of goods further improve customer relations in
This award was established in 2002 in in all categories, from cut-price to pre- order to ensure that customers receive
order to encourage and emphasise good mium. the service they demand, that they can
environmental and ecological initiatives. Coop provides products under a range find the things they are looking for in
The award for this year focuses on food of different brands, including its three Coop stores, and that they view Coop
and climate. biggest own brands Coop Änglamark, Sverige as a reliable supplier of everyday
Coop’s initiatives concerning direct Coop and X-tra. Coop Änglamark offers commodities.
communication with customers will be a broad range of goods which are
developed in future, the Coop MedMera organic, Fairtrade, environmentally New working methods
member card being an important instru- friendly or suitable for people who suffer New working methods and reorganisa-
ment for this. Custom offers are becom- from allergies. The Coop brand repre- tions have taken place over the year in
ing a more and more important element sents top quality products at a good connection with the integration of Coop
of our efforts to meet the requirements price. X-tra is Coop’s own cut-price into KF as a wholly owned subsidiary.
and wishes of our customers. Coop is brand, which allows customers the As of 1 January 2009, service com-
adapting its market communication in opportunity to buy good products at pany KF Shared Services will be dealing
accordance with this. really low prices. with finance, IT, HR and personnel
issues for the entire group. The general
HR function operates collectively, and
communication issues will be dealt with
by the Group’s operations working in
close cooperation.
17

20. Buying food online
Mataffären.se is the answer Mataffären.se is a grocery retail store which uses the
Internet as its sales outlet. Customers are offered a
to members’ requests for complete range of everyday commodities for delivery in
them to be able to buy good the Stockholm region. This operation is run from a new
products quickly and conve- picking store south of Stockholm, and deliveries take
place between 10:00 and 22:00 on weekdays. Custom-
niently. ers can pay online, receive an invoice or make a pay-
ment via a card terminal at the time of delivery. By using
their Coop MedMera cards, customers can also donate
money to Kooperation Utan Gränser. Mataffären.se
offers a broad range of organic and Fairtrade products,
and all goods are delivered using biogas vehicles. This
organisation holds KRAV accreditation.

21. KF I Business report 2008
Benefits of scale and opportunities for The measures implemented will con- As far as logistics are concerned, the
cooperation are available in a number of tinue to take effect over years to come. company is working to reduce transpor-
areas within the KF Group. For instance, The emphasis in future will be on work- tation and warehousing costs. A large
Coop Sverige is working together with ing to an even greater extent on how we number of projects have been imple-
KF Fastigheter on setting up new stores deal with customers. Coop has also mented in this field over the year, and
and exploiting new locations. The mar- worked in partnership with the consumer work on specialisation, prioritisation and
keting functions at Coop Sverige and societies to introduce an in-store quality resource assurance is constantly ongoing
MedMera Bank collaborate. This will review system in order to guarantee the for the implementation of new projects.
bond membership issues more closely standard of ranges and services. The partnership with Green Cargo
with business operations and the stores. regarding transportation of goods by rail
Efficient purchasing provides both financial and environmen-
Employees Cilab (Coop Inköp och Logistik AB) is tal benefits. Environmental initiatives
An extensive management review for responsible for purchasing for Coop have been implemented in other areas as
charting the need for training and fur- Sverige and the retail consumer societies. well. Coop’s truck drivers are receiving
ther development of managers has been In 1008, Cilab also took over deliveries training on how to drive frugally, which
implemented throughout the entire to OKQ8 within the Motorist and Non- is resulting in lower fuel consumption
Group over the year. 600 people from food segments. The company continued and reductions in carbon dioxide emis-
Coop Sverige took part. This pro- to develop in 2008 by means of – among sions. All vehicles have also been fitted
gramme is an important part of the other things – enhanced business con- with trip computers which record data
change and improvement work ongoing trol and reporting. Service levels have such as fuel consumption and idling.
throughout the entire Group. also improved significantly over the year The past year also saw enhancement of
All employees have been invited over thanks to improved goods control proce- the quality of purchasing operations.
the year to information meetings relat- dures together with other logistics meas- Cilab entered into a new contract with
ing to the improvement programme. A ures. Everfresh concerning deliveries of fruit
project entitled “Jättelyftet” (The Mas- Over the year, Cilab initiated a major and vegetables for all of Coop Sverige
sive Lift) was implemented at various initiative, “Mat från Regionen” (Food and the retail societies. Collective pur-
locations all over Sweden in the autumn. from the Region), in cooperation with chasing allows better purchasing terms
The management at KF and Coop took players such as LRF (The Federation of and quality to be attained.
part in a total of four meetings and pro- Swedish Farmers) in order to meet mem- Cilab will be responsible for and exe-
vided information for some 8 000 staff bers’ requirements to be able to buy cute all frozen goods logistics in south-
concerning the situation and future more locally produced goods in stores ern Sweden from the start of 2009. The
prospects for the Group. and hypermarkets. new setup will reduce costs thanks to
lower picking costs, less tied-up capital
and purchasing benefits compared with
the present solution. Reliable delivery to
the stores is also expected to increase as
all goods will be collected together in a
single warehouse.
19

22. KF I Business report 2008
Daglivs
u Daglivs is situated in Kungsholmen, non-recurring expenses in connection Daglivs
Stockholm and is one of the biggest, with the change of ownership. Board of Directors: Chairman Pär Jansson,
most successful grocery retail stores in Sales for 2008 amounted to a total of Johnny Capor, Magnus Ros, Jonny Olsson
CEO: Per Ekstrand
Sweden. Daglivs has been part of the KF SEK 478 million, excluding VAT, which
Turnover: SEK 478 million
Group since late 2007. Daglivs was represents an increase of 1.2 per cent on
Average number of employees: 109
opened in 1982 and currently has 4,200 2007.
sq m of floor space over two floors. Extensive work has taken place over
Daglivs provides more than 30,000 the year in order to introduce organisa-
items, which gives it the biggest range of tional improvements.
all grocery retail stores in supermarket Over the year, Daglivs has received
format in Sweden. This store has a KRAV accreditation in addition to the
“range guarantee”, which means that Swan label. Major emphasis is placed on
customers can submit their requirements in-store energy savings and planned
and get more or less any goods they like transportation in order to ensure the
from the range. These goods are deliv- lowest possible energy consumption and
ered to the store as long as they are avail- carbon dioxide emissions.
able, but if they are not the customer In future, the company will continue
receives 2,000 points on their Coop to focus on renewal and changes to its
MedMera account instead. Daglivs also store in order to reinforce added value
has the most customers of any store in for its customers. A new customer serv-
Sweden. Almost 13,000 customers visit ice team will be set up, so helping to
the store every day. improve service levels.
2008 was a very good year in terms of Cost savings will continue in 2009
profit and turnover, given the new com- while initiatives are implemented,
petitive situation on a local level and including giving store staff additional
training.
Mataffären.se
u Mataffären.se is a grocery retail store deliveries are transported using vehicles Mataffären.se
which uses the Internet as its sales outlet. which run on biogas, and Mataffären Board of Directors: Chairman Pär Jansson
Customers are offered a complete range holds KRAV accreditation. Johnny Capor, Martin Fridolf, Karl Wistrand
of everyday commodities for delivery in Customers can pay online, receive an CEO: Claes Hessel
the Stockholm region. This service invoice or make a payment via a card Turnover: SEK 27 million
began before the summer of 2008 and terminal at the time of delivery. Coop Average number of employees: 26
rapidly became a success. Home deliver- MedMera cards can be used to pay for
ies take place between 10:00 and 22:00 purchases or collect points.
on weekdays. This operation is run from Mataffären’s aim is to become the
a new picking store south of Stockholm. dominant player in the online grocery
Mataffären.se has a distinctive fresh retail trade and to lead developments in
produce profile and offers a broad range this field.
of organic and Fairtrade products. All
20

23. What do KRAV-labelled and Fairtrade products entail?
Coop is the biggest grocery retailer Fairtrade labelling means – among other
things – that growers and employees in devel-
for both KRAV-labelled and Fairtrade oping countries enjoy improved economic
goods. terms, child labour and discrimination are coun-
tered, democracy and organisation rights are
The KRAV label appears on foods which have developed, and environmental awareness and
been produced in a sustainable way. Chemical organic production are promoted.
pesticides, artificial fertilisers and genetically As well as receiving higher payments, grow-
modified organisms (GMOs) must not be used. ers also receive an additional premium. This is
No synthetic colourings or flavourings can be used to develop the local society, contributing
used, and hardened fats are not permitted. Ani- to new schools or healthcare, for example.
mal husbandry is at great pains to safeguard Rules and criteria are developed by Fairtrade
animal health and natural behaviours. An Labelling Organizations International (FLO),
inspector calls at least once a year and makes together with representatives of the growers.
sure that production is taking place in accord- Inspection and certification are dealt with by
ance with KRAV rules. FLO-Cert, an independent body.

24. KF I Business report 2008
Real estate and finance
These operations include KF Fastigheter, one of Sweden's biggest property companies focusing on
the retail trade, and MedMera Bank, which has a central function in the relationship between members
and business operations in the consumer cooperative movement, primarily through its handling of the
Coop MedMera member card. KF Invest is the financial function for the Group, while KF Sparkassa
administers deposits from members and offers competitive interest rates on savings accounts.
MedMera Bank
u The main objective of MedMera Bank are offered a broad range of financial financial services. Interest in the Coop
is to manage the Coop MedMera reward services, as are a number of partners. MedMera card with Visa – which was
scheme, which gives consumer coopera- MedMera Bank also assists the retail launched very successfully in 2007 – has
tive movement members benefits in the trade with information and advertising continued to increase in 2008. The part-
form of discounts, cheques and offers services, such as monthly mailings of ner programme has also been extended
with both the cooperative movement Coop Mersmak magazine together with over the year, which ensures even more
and a number of partner companies. account and points information and benefits for customers with MedMera
MedMera Bank issues and manages the reward vouchers and targeted offers to cards. Löplabbet and Familjens Jurist –
cooperative movement’s 3.5 million or members. On average, MedMera Bank among others – have been added. All in
so Coop MedMera cards in circulation. communicates with 1.1 million Swedish all, this has helped to bring about an
The bank is also responsible for all card households every month. increase in volume for the reward
acquisitions within the consumer coop- scheme. KF’s acquisition of Daglivs, the
erative movement. The technical infra- Positive development in 2008 biggest supermarket in Sweden, also
structure allows the bank to keep all MedMera Bank focuses primarily on a resulted in an increase in the numbers
checkouts online in all connected stores. large number of private individuals, of new members.
MedMera Bank has been running offering them loans and consumption The Hotel Voucher is one of the most
banking operating since 2007 and is credit linked with the Coop MedMera popular benefits in the Coop MedMera
regulated by the Swedish Financial card. Overall, MedMera Bank has low programme. Members are offered prefer-
Supervisory Authority. Members and risk exposure in respect of credit, while ential rates in a large number of hotels in
consumer cooperative movement stores at the same time a low risk profile policy Sweden and the rest of the Nordic
is applied to investments. Most of the region, as well as in a number of cities in
bank’s customers are private individuals, Europe. Since this scheme started, more
but the bank also aims at public sector than 2 million nights have been booked;
MedMera Bank companies, municipalities and county around 570,000 of which were booked
Board of Directors: Chairman Lars councils. The credit crunch has not in 2008.
Idermark, Johnny Capor, Kent Ryberg, affected MedMera Bank to any appreci- MedMera Bank has shifted its empha-
Thomas Johansson, Laszlo Kriss, able extent in 2008. MedMera Bank has sis from operating mainly as a service
Håkan Smith, Karl Wistrand, Jeanette
Franzén (trade union representative),
opted to follow fully the Riksbank’s organisation for the rest of the consumer
Anne-Marie Rydergren (trade union rep- interest rate cuts. cooperative movement to also actively
resentative), replaced by Susanne Development over the past year has develop and sell new and existing prod-
Hansson in February 2009)
been positive in terms of both the influx ucts. By establishing sales teams and
CEO: Ivar Fransson
of new members and the demand for sales coaches, the bank will be able to
Net sales ex. VAT: SEK 305 million
Profit after financial items: SEK 19.6
million
Average number of employees: 53
22

25. In May 2008, Dagens Nyheter
named Coop MedMera Visa as
the best “food card”.
Coop MedMera card
The Coop MedMera card is a membership
card and it acts as proof of membership
for the local consumer society. This card
give stores and consumer societies more tions in order to prevent crime and is also a key to the rewards programme
support with offering products to mem- fraud. Advanced data storage systems are or reward scheme, as well as other serv-
ices and offers from the consumer socie-
bers. being develop in order to achieve the ties, KF and Coop Sverige as well as other
The option of becoming a member of best security possible, and the cards participating companies; Akademibokhan-
the consumer cooperative movement themselves are undergoing technical deln, Bokus, KappAhl, Löplabbet,
Familjens Jurist, Expert, OKQ8 and Apollo.
online was launched over the year, and development as well. More than 1,200 stores and hypermar-
this has been very successful. The launch of new products and coop- kets, as well as 800 OK petrol stations,
eration with new partners have been are affiliated to the rewards programme.
There are around 3.5 million Coop Med-
Technical development at the given priority of late. Greater benefits for Mera cards among the cooperative move-
cutting edge members are the most important consid- ment’s members – more than 3 million of
The Coop MedMera card is also an eration; while at the same time Med- them. The Coop MedMera card allows
members to register their purchases and
important tool for enhancing service lev- Mera Bank and Coop Sverige are work-
get points which are then converted into
els and developing in-store technology. ing together to try to enhance business reward vouchers. In addition to reward
New services are constantly being devel- benefits as well. Above all, the rewards vouchers, members receive benefits and
oped. For a number of years now, cus- programme and customer database must discount offers for hotels, travel and vari-
ous events, among other things.
tomers with Coop MedMera cards have be used in a way that involves clearer If cardholders collect 5,000 points,
had the option of scanning their own links between the Coop MedMera card they receive a reward voucher which gives
goods in-store, thereby making it easier and the stores; this will also allow finan- a discount in 1,200 stores or on travel or
nights in hotels.
to get through the checkout and pay. cial benefits for members to be enhanced. Coop Mersmak magazine is mailed out
Over the year, too, a number of stores Supplementary services such as to more than a million households spend-
have been fitted out with fast checkouts Bistånd på köpet (develop aid by auto- ing more than SEK 1,200 a month, or
which make 12 or more visits to a store in
offering self-service, a service highly matic rounding off) allow members to a month. There is a special card, called
appreciated by customers in cities who easily donate money to help reduce pov- the KF Inköpskort, for organisations and
are buying only a few goods and are in a erty throughout the world. This allows companies.
hurry. the MedMera scheme to promote bene-
A lot of the technical development in fits in society as well. The prevailing eco- Coop MedMera Visa
progress also involves security, an issue nomic downturn will affect profits over Since 2007 there has been a debit and
credit card, Coop MedMera Visa, which
which is taking on ever more impor- the coming year, and there will be
allows customers to pay with their Coop
tance. The handling of card numbers strong focus on measures to counter this MedMera cards and collect points all over
and personal details is regulated in law in 2009. the world. Coop MedMera Visa is a debit
and demands advanced technical solu- and credit card offering credit options of
up to SEK 100,000. The annual fee is SEK
95 per card. One point is received for
every krona spent, regardless of where
the purchase takes place.
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