Regional consumer cooperatives vs. international retail chains: A performance analysis

The rapid expansion of international retail chains in the Fast-Moving Consumer Goods sector raises concerns about the long-term viability of traditional regional consumer co-operatives, which play an important economic and social role in Czech regions. Understanding firm-level economic differences is essential for assessing sustainability, competitiveness, and policy implications. The article aimed to identify and explain differences in economic performance between regional consumer co-operatives and international retail chains in Czechia, with particular emphasis on market share dynamics and the determinants of competitive advantage. The study employed financial ratio analysis, correlation analysis, and fixed-effects panel regression. The dataset consisted of audited financial statements of seven major consumer co-operatives and seven leading international retail chains over the period 2005-2024. The results showed that international retail chains significantly outperformed consumer co-operatives in sales growth, labour productivity, and market share expansion. While co-operatives doubled their sales over the observed period, retail chains nearly tripled theirs. Labour productivity in co-operatives grew more slowly and remained less than half that of chains, contributing to persistently higher personnel cost ratios. Regression results confirmed a strong positive relationship between market share and labour productivity, as well as between market share and leverage, while higher cost ratios are associated with lower market shares. Co-operatives exhibit lower indebtedness, but their conservative capital structures result in lower returns on equity than international chains. Profitability improvements among co-operatives were driven by favourable macroeconomic conditions and extraordinary events, such as the COVID-19 pandemic, rather than structural efficiency gains. The findings can inform management strategies of regional co-operatives, highlighting the need for productivity-enhancing investments, digitalisation, and deeper integration in purchasing and logistics. Policymakers may also use the results when designing measures to support sustainable regional retail structures