Closure stirs emotions
Last month Danish COOP decided to close Denmark’s oldest retailer: Irma.
We saw consumers protesting, and the media reported that COOP had proved totally unable to run the Irma chain which it took over some 40 years ago.
Two former Irma directors pointed out that COOP itself has driven Irma into a slump.
On the other hand COOP´s own MD pointed out that quite frankly, there was no basis for continuing the Irma chain.
His explanation for the decision appeared to be leadership.
“Many mistakenly believe that Irma customers are just the kind of rich people who don’t care about prices and only shop in Irma. That is simply not the case. Irma shares the most customers with the discount stores, and the discount share among Irma’s customers has just grown and grown, so that an average good Irma customer now shops twice as much in discount stores as in Irma, which has become a supplementary store”.
As someone who has written a thesis about Irma in particular, I can add some more personal views:
Over the last 40 years there have only been a few profitable enough to build any reserves and Irma could not have survived this time period without COOP. When COOP bought Irma no other chains or groups wanted to take over Irma as discount was emerging. Various Irma managements since then have not been able to reformulate Irma into a long-lasting chain concept. Irma benefited from COOP’s economies of scale in logistics and purchasing volume but were not creative enough to set out a direction for a positioning that could lead to the chain’s survival. The iconic Irma director Børge Olsen, who developed the Irma chain to 160 stores (today 70 stores) instinctively understood “Mrs. Jensen´s ” shopping habits but. Irma has never tbeen he same since. Irma’s concept fits a different era, while consumers’ shopping habits have long since moved on.
Perhaps because the business base was vanishingly small. Irma tried several times to open stores outside Copenhagen without success.
if there are not enough customers for a given concept in an industry where margins are low and you are dependent on a large turnover, it unfortunately makes no sense to continue. And certainly not in a country that has among Europe’s largest coverage of grocery stores. A sad day, but an inevitable one too.