Coop-medlemmer i nord får mye mer tilbake – slik fungerer systemet

Customers of Coop in Northern Norway can receive a shopping dividend of 5,000 kroner, while those in Eastern Norway are limited to 1,000 kroner for the exact same purchase.

The discrepancy is attributed to weak local competition, according to professors at the Norwegian School of Economics (NHH).

Where shoppers choose to live can significantly impact the amount of money they receive back from their grocery purchases. The Coop system, comprised of 57 independent cooperative societies, implements widely varying rates for shopping dividends.

For a family that spends 100,000 kroner annually on groceries, the differences are substantial:

• Coop Nord: A five percent dividend returns 5,000 kroner.
• Coop Øst: A one percent dividend returns only 1,000 kroner.

has members in Troms, Nordland and Finnmark. has members in Oslo, Akershus, Østfold, Buskerud and Innlandet.

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A Subsidy for Northern Norway

Øystein Foros, a professor at the Norwegian School of Economics (NHH), points out that many customers are unaware they are members of a local society rather than a national entity.

“The Coop system is based on members sharing the surplus. Their slogan is, of course: We are owned by our members. Many are likely unaware that they are members of a local cooperative. It’s not as if you have a share in Coop Norway,” says Foros.

See how large a shopping dividend your Coop society provides here.

Despite the fact that logistics are theoretically simpler in central Eastern Norway, it’s the districts that receive the highest percentages. Foros believes national pricing effectively leads to a geographical redistribution of wealth.

“People in Northern Norway also benefit from the chains’ national pricing. In that sense, there’s a subsidy for Northern Norway here. Without national pricing, food would likely be more expensive in the districts,” he says.

Cheapest Food in the North

In cities like Tromsø, the high dividend means Coop has a significant competitive advantage over Kiwi and Rema 1000 on price, assuming customers shop at Extra, Coop’s low-price concept.

“In a city like Tromsø, this means that the membership benefits significantly outperform the discounts at Kiwi and Rema 1000. This assumes shopping at Extra, as Coop’s other concepts are more expensive.”

Kiwi offers only , while Rema only offers discounts on some items through its app.

Foros concludes that the high dividend creates an unexpected effect on the actual prices Northerners pay compared to the rest of the country.

“A five percent shopping dividend means that food prices in practice will be well below what people pay in areas where the dividend is only one percent. Many will be surprised to learn that you probably get the cheapest food in Northern Norway.”

Les også: Coop Customers in the South Lose Out: – Completely Crazy

Weak Competition Drives High Dividends

Foros has followed the grocery industry for many years. He researches, among other things, competition economics, and has been commissioned by Rema 1000 in the so-called price hunter case.

Professor Frode Steen at NHH is also very familiar with the grocery industry. He leads the Foods research program, which is funded by Norgesgruppen.

Steen believes the explanation for the large differences in customer dividends lies in market power. Where competition is weakest, Coop makes the most money, which it can then distribute back to its members.

WEAK COMPETITION: High shopping dividends are found in areas where Coop has a strong market position, says NHH Professor Frode Steen
Photo: Erik Molland (Nettavisen)

“I believe that local competition is weaker in many of the areas where Coop pays the highest dividends. Coop is strong in Central and Northern Norway. There, they have a market share of around 45 percent. In Eastern Norway, it’s only 20 percent and in Southern Norway 30 percent,” says Steen.

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Nettavisen has previously written about the skewed competition in many of the country’s municipalities. In some places, Coop is dominant, while in others, Kiwi and the other Norgesgruppen stores are completely dominant.

Steen points out that when the distance between stores increases, customers become locked into their local cooperative because the alternatives require a long journey. This gives Coop a more stable income.

“The fact that Coop is so large in the districts can make operations here more profitable. There’s less chance that customers will switch stores. It doesn’t pay off when people have to drive a long way to get to one of Coop’s competitors.”

Lack of Opportunity to “Shop Around”

Steen explains that the lack of local competition means that customers miss out on price benefits that exist in more competitive areas, especially when it comes to the opportunity to take advantage of price differences.

“If Coop stores are more alone locally, customers can’t shop around at the different chains. Then they lose the opportunity to take advantage of the fact that different products can be priced differently. This can manifest itself through smaller local promotions or more expensive product selections,” says Steen.

“At the same time, loyalty to the local store and the wide selection play a big role in profitability in the districts.”

Steen points out that many are willing to pay more to maintain the offer.

“Many choose to support the local retailer because they want to keep the local store. At Coop, the stores can offer almost anything to customers. A Joker store can’t get the customer a coffee maker, they simply don’t have it in their assortment,” says Steen.

Historical Reasons for Dividend Differences

Communications Director at Coop, Harald Kristiansen, believes it’s positive that attention is being drawn to their ownership model. He confirms that there are local variations, but points to other reasons than market power.

“There are historical reasons why the cooperative societies have different economies and therefore different levels of shopping dividends. How the cooperative societies prioritize is determined by the locally governing bodies, where the members are represented,” says Kristiansen.

A BOOST TO REMA AND KIWI: – Many customers choose Coop precisely because they want the surplus to go back to customers and the local community rather than to a small owner family, says Communications Director at Coop, Harald Kristiansen
Photo: Nina Lorvik (Nettavisen)

He emphasizes that while the stores largely have national prices and promotions, costs such as transport and rent can vary.

“The variation in shopping dividends is about the financial solidity and priorities of the individual cooperative. This is determined by the members through governing bodies,” he explains.

Kristiansen agrees with the NHH professors that local affiliation is a key factor, but believes the motivation behind the loyalty is about more than just a lack of alternatives.

“Many customers choose Coop precisely because they want the surplus to go back to customers and the local community rather than to a small owner family,” Kristiansen concludes.