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Coop tests controversial pricing policy

Switzerland’s biggest retailer, Coop, is testing out personalized pricing in its online store, offering some customers higher reductions than others on the same products.

Coop tests controversial pricing policy
Photo: Coop

Coop @ home hopes the new system will lead to higher turnover, Sunday newspapers reported.

The test has been launched against the backdrop of falling sales as shoppers take advantage of lower euro prices over the Swiss border.

August Harder, Coop’s head of IT, told the Schweiz am Sonntag that new software developed in Germany is being used to analyse individuals’ shopping orders.

In recent weeks reductions and special deals have been adjusted in line with these orders, with customers receiving personalized money-off coupons for certain items.

“We are still in the testing phase but hope to play a leading role in this area in Switzerland,” Harder said.

For the time being, personalized pricing is limited to Coop @ home with its range of food and near-food products.

“But if the test is successful it could be expanded to all our online stores as well as our shops,” Harder told the paper.

The test phase is expected to run until early 2016.

Coop’s biggest competitor, Migros, has ruled out adopting a similar pricing policy in its online store, LeShop.

“We want to treat all our customers equally and not discriminate against anyone on the basis of price,” spokesman Dominique Locher said, according to the newspaper report.

The Swiss consumer protection foundation criticized Coop over the move.

Spokesperson Sara Stalder told the 20 Minuten newspaper that offering lower prices in return for data was unfair and she warned customers would be indignant at paying different amounts for basic goods.

A number of retailers abroad have employed differentiated pricing. Amazon had to apologise to customers in 2000 when it became clear it was charging customers different amounts for its DVDs.

Even President Barack Obama has weighed in on the issue, warning against personalized pricing in a report issued in February, the newspaper said.

 

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OPINION & ANALYSIS

Will Switzerland be able to feed itself in the future?

Amid a worsening climate crisis and an increasingly unstable world food system, Clare O’Dea looks at what Switzerland and its population need to do to ensure there is enough food on the table in the years to come.

Will Switzerland be able to feed itself in the future?

Faced with a growing global population, the climate crisis and increasingly degraded agricultural land, the challenge of how to feed the world in the near future is one of the burning issues of the day. 

Russia’s invasion of Ukraine has created a multitude of additional food security problems, contributing to already rising global food prices and rising input costs for agriculture, such as energy and fertilisers. 

Meanwhile, Switzerland’s food self-sufficiency rate is relatively low for Europe at around 50 per cent. The government’s new agriculture strategy for 2050 has set the seemingly modest goal of maintaining that level.

The 79-page strategy document, like most such publications, does not look beyond 2050. But this is just the point when climate change and increasing demand for food are expected to intensify.

Should we be alarmed?

One thing the Covid-19 pandemic showed was that not all countries are equally affected by a global crisis. Money is usually the main protection against disaster, but leadership, preparedness, and the ability and willingness to respond quickly are also important. 

For domestic food production over the next two to three decades, hope still rests on two main pillars – boosting productivity in a sustainable way, and changing consumer behaviour. There’s not much else that can be done. 

EXPLAINED: Why Switzerland’s inflation has rate stayed low compared to elsewhere?

The bad news is that the Swiss population is not eating a well-balanced diet and the average intake of calories is too high.

People are not eating enough dairy products, pulses, fruit and vegetables and consuming too much meat, sweet things and alcohol. 

We all know this.

But did you know how harmful this love affair with our stomachs is? The strategy document spells it out: “The environmental impact of consumption could be halved if people adopted a healthy diet, based on the nutritional recommendations.”

With a different portfolio of food grown in Switzerland corresponding to a healthier diet, the self-sufficiency rate would increase too. Consumer behaviour is changing but not radically or quickly enough. It’s hard to see the harm being reduced without enforced measures of some kind. 

READ MORE: Seven products that are becoming more expensive in Switzerland

Another crying shame of our food system and lifestyle is that a third of the food produced by farmers ends up being wasted between field and fork. All that energy, money and ecological impact for nothing. 

Although food self-sufficiency carries its own risks – vulnerability to local shocks, extra pressure on the environment – being too reliant on imports is not ideal. Overall, the EU is a net food exporter. But the Swiss government has made it clear that Switzerland will continue to rely significantly on imports for the foreseeable future. 

One simple reason is the limited availability of agricultural land. Currently 36 per cent of Switzerland’s land surface is given over to agricultural production and pasture. Farmers have to compete with growing urbanisation and, of course, the non-negotiable presence of the mountains that cover 60 per cent of the land’s surface.

During the Covid-19 pandemic we saw that money can, up to a point, buy you health. Switzerland nabbed so many of the globally available vaccines that it has had to donate or destroy surplus. Money can also buy you food, and this, along with proximity to supply, puts Switzerland is a rather secure position. 

In fact, Switzerland came fifth out of 113 countries in the Global Food Security Index which considers the issues of food affordability, availability and quality, as well as natural resource and resilience. By which we could conclude that everything is under control. 

The victims of this year’s global food crisis – the 323 million people who will become acutely food insecure, according to the UN – live in the countries that routinely appear at the bottom of such indexes. 

Nevertheless, according to the Swiss agricultural research body Agroscope, we should not feel a false sense of security. Apart from dependence on foreign countries and climate change, power supply is one of the key threats to Swiss food supply. 

In its latest annual assessment of threats to food supply, Agroscope wrote that the probability of and the potential damage from a serious power shortage are particularly high compared to other risks. “Supplies of vital foodstuffs would be massively affected, the effects would be manifold, and would not be overcome quickly.”

If the worst comes to the worst, Switzerland stockpiles compulsory stocks of essential goods for bridging in case of crisis and shortages. Mandatory storage facilities around the country hold three to four months’ worth of basic foodstuffs like sugar, rice, cooking oils, cereals and animal feed. 

Coffee, opiates and nuclear fuel: What are Switzerland’s ‘strategic stockpiles’?

Is that reassuring? Three months doesn’t feel like a lot.

These stocks are only released when the economy itself is no longer able to satisfy demand. In any case, Agroscope says “household emergency stocks are of great importance”.

I don’t know about you, but I’m off to the supermarket.

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