Online retailer pulls back from the brink

LeShop aims to make customers' lives easier (LeShop.ch) LeShop home delivery source: LeShop.ch

Online retailer LeShop.ch has turned its fortunes around in just 12 months, thanks to its alliance with Switzerland’s biggest retailer, Migros.

Sales at the internet supermarket jumped by 52 per cent in 2004 and management hopes to reach the breakeven point early next year.

LeShop said on Thursday that the number of its customers had doubled in 2004 to 23,900, while sales for last year were worth SFr33.1 million ($27.8 million).

At the end of 2002, the company almost went under after its main shareholder, the Bon appétit Group, pulled out.

Management said that the addition of Migros products to its line-up of brand name items had boosted sales. LeShop currently offers customers a selection of 6,500 products.

Orders

On average, customers ordered SFr204 worth of merchandise, SFr14 more than a year earlier. Food is the most popular item, with 28 of the 30 most requested articles belonging to this category.

LeShop has also benefited from the reorganisation of its activities, especially in the preparation and shipping of orders.

“Before the reorganisation, we were losing money on every order,” said Christian Wanner, head of LeShop.

This meant that with each new customer, the online retailer had been mounting up additional losses until last year.

but LeShop is still in the red and does not expect to reach the breakeven point before the first quarter of 2006. Wanner reckons that sales will have to total between SFr45-50 million to reach this goal.

Should this happen, the company will be one of the few European online retailers in its sector to be profitable, along with Britain’s Tesco.

More growth

Wanner believes that strong growth should continue this year. Swiss online supermarkets registered the highest growth rate in Europe in 2004 at 53 per cent, plus total sales of SFr49 million.

European sales figures for the sector climbed to SFr2.7 billion last year, with Britain accounting for more than two-thirds of the total.

Switzerland rates fifth in terms of online supermarket sales in Europe, putting it ahead of countries such as Germany and Italy.

But this still represents only 0.14 per cent of Swiss retail sales. Wanner estimates the online sector could eventually generate up to SFr350 million in sales.

swissinfo with agencies

Key facts

LeShop recorded sales worth SFr33.1 million in 2004, but did not release figures pertaining to its losses.
Coop, Switzerland’s second-biggest retailer, sold online goods worth SFr16.2 million.
Customers can choose from 6,500 articles at LeShop, versus 4,000 at Coop.
On average, they spent SFr204 on their order.

In brief

LeShop was created in 1997 near Geneva.

Its main distribution centre is canton Aargau.

LeShop ships up to 130 tonnes of groceries per day.

Three quarters of the company’s customers are women.