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487. Coops “In The Village”: the Power of Cooperation between Cooperatives

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Coop Name: Coop Israel N° of Employees: 1300
City: Jerusalem N° of Members: 15000
Country: Israel Year of formation: 1939
Website: http://www.israel.coop
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About this coop:

COOP Israel is the leading consumer cooperative in Israel, operating the third largest food chain in the country. The cooperative was founded in Jerusalem in 1939. In 1942, COOP began operating neighborhood grocery stores, forming the historic basis of the chain. It has since expanded its activities over the years, absorbing various smaller brands and consolidating its position as a leading retail group nationwide. COOP Israel has 15,000 active members and 1,300 employees all over the country. As of today, COOP Israel operates over 210 points of sale through 3 cross-country sub-chains:

  • COOP Shop– A Chain of 42 neighborhood grocery stores.
  • COOP Shop in the Village– Over 160 groceries and stores in rural areas (constantly expanding).
  • COOP Shop Extra– 7 discount grocery stores located at the outskirts of the cities.
COOP Israel is constantly growing, opening new stores, operating an advanced logistics center, regional distribution centers and a fleet of trucks for self-distribution. New members are joining the cooperative society as the chain endeavors to lower costs in residential neighborhoods and the Periphery, while maintaining a qualitative shopping experience. Coop Israel is an active member of the ICA and recent addition to Cooperatives Europe. Our CEO, Mr. Ofer Feinstein, sits on the EuroCoop Board of Directors. Coop Israel is, now more than ever, fully committed to participating in the Global Movement, and constantly exploring areas for collaboration with other Cooperatives. We are always keen to exchange information, particularly on Cooperative Governance, Best Practices, legislative frameworks, IT and Retail. We are convinced that within the cooperative movement, there is great potential for business cooperation, in areas such as parallel import, joint purchase of equipment and IT innovation. Our IT Department is at the cutting-edge of Business Management Software development, and we are on the lookout for potential partners for our customizable Cloud ERP Software service.

Coop Village

In 2013, Coop Israel and the Communitarian Cooperatives (Moshavim – Residential Collectives that organize the life of their resident-members according to the cooperative ethos) signed a ground-breaking framework agreement on retail services in the Periphery.

By providing quality consumer goods at affordable prices, this agreement empowers small businesses outside urban areas with the buying force and logistics of Coop Israel, the third largest supermarket chain in neighborhood areas in the country.

Due to their relative isolation, these communities face a high supply cost, which has in many cases caused the local-run convenience stores to close or fail. At a time when the entire Israeli retail industry is convulsing, this has made it even tougher on the local shops and has repercussions on the industry as a whole.

By integrating these ‘mom-and-pop’ shops as franchisees under the “Coop Shop in the Village” Brand, the participating outlets benefit from the logistics and bargaining power of a major chain, which translates into lower costs and therefore lower prices for the end consumer. This has empowered the communities as consumers, reviving a moribund sector of activity, all the while broadening the customer base of Coop Israel.

The setup embraces the core principle of giving back to the community (providing consumer goods at affordable prices, revitalizing local business and employment) while creating business opportunities for a primary cooperative. Coop Israel takes no margin and therefore makes no direct profit on sales. The addition of these extra outlets to the chain increases orders, which in turn brings down cost-per-unit and indirectly benefits the Coop’s activity.

After the first year of implementation, the effects were already substantial:

  • Prices have gone down between 15-30% for the consumer
  • Many franchisees are investing, expanding their commercial space to face rising demand
  • Many are also investing in more labor to face rising demand
  • More potential franchisees are asking to join the network daily, leading to new outlets every week, and an ever-growing presence of the Coop throughout the country.

And the trend is continuing.

This is an example of Cooperatives from different sectors working together and creating opportunities at a time when the market is contracting. Where competing brands are shrinking, Coop Israel has successfully drawn on its Cooperative identity to create growth, aid the community and expand its own activity.

Coop Shop “in the Village”: a classic case of successful Cross-Sector Cooperation between Cooperatives.

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Coop Israel
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