Coop, Prisma to remain rivals for a few more months
Due to competition regulations, Coop and Prisma will effectively remain competitors through the summer, despite the former taking over the latter.
The Competition Authority earlier this month gave the all-clear to Coop taking over Prisma, but the rebranding will take some time and will not be complete until year's end.
The regulations mean Coop and Prisma will still be competitors, but once Prisma is gone, Estonia's supermarket landscape will be a major chain down – and one which had charged competitive prices, "Aktuaalne kaamera" reported.
Coop says it will start rebranding stores this September, with all Prisma branding to have disappeared by year's end.
"Our activities are only in the initial stages, and we do not yet know how the work there is to be organized. Despite the Competition Authority granting us permission, we remain competitors until the stores are officially transferred. As of today, we still cannot examine things closely enough to give a comprehensive answer to that question," Coop Eesti CEO Rainer Rohtla said.
As well as no planned store closures, there are no layoffs to be made yet and, in fact, more in-store staff will be hired, Rohtla added, though what proportion of Prisma back-office staff will be taken on at Coop will become clear during the acquisition process. The lag is also due to competition regulations, he said.
"We are not yet permitted to look in detail at what people there are doing, nor can we finalize our new structures before September. It is clear that Coop Eesti's central cooperative needs additional labor, as does the Harju cooperative. Since the Harju cooperative will be taking over most of the Tallinn region and its turnover will double, additional workforce will also be needed there," said Rohtla.
The fate of Prisma's 24-hour outlets and whether any will face closure will be decided later, once sales figures are clear, Rohtla added.
Economist Mihkel Nestor said the transition period also has implications for Coop in that other competitors may be able to lure Prisma's existing customers into their own stores.
"People who shop in stores tend to have fairly strong brand loyalty. People love going to their local store, but often it is also the brand itself that resonates with them. Some are accustomed to shopping at Rimi, others at Prisma. Now one major name is disappearing, and many people will have to find a new local store. It is possible that it will remain the same store they used before, just under a different logo, but some retailers will certainly try to attract those customers to their own stores," Nestor said.
Oleg Gross, owner of the no-frills Grossi supermarket chain, also said some movement in the market will probably take place.
"If Coop pushes ahead with its pricing policy, there may be a hike in prices, meaning price-sensitive customers may start looking for new supermarket chains. At the moment, the cheapest chains in the price comparisons are Lidl, Prisma, and Gross. It is clear that one strong price competitor is now leaving the market," Gross said.
Rohtla said the Coop acquisition process of Prisma should be completed within this calendar year.
Prisma Peremarket owner Finnish retail group SOK announced in April it would be selling the 13 Prisma Peremarket stores it operates in Estonia to Coop. Prisma in Estonia had not reported a profit since 2021, and had reported losses of three to seven million euros per year in the following years.
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Editor: Andrew Whyte
