Migros is currently in the process of saving money and undergoing a major cleanup. While many businesses within the company are being let go, such as Melectronics, Sport X, Hotelplan, and Mibelle, the German supermarket chain Tegut remains a holdout despite experts advising to get rid of it as soon as possible.
The decision to hold onto Tegut is a significant one for Migros, as the company is facing major job cuts and scrutiny for unprofitable ventures. In recent years, Migros has sold off several businesses, including Globus, the Glatt shopping center, and catering supplier Saviva. However, Tegut remains a priority for Migros Zurich, with no plans for a sale in sight.
Tegut, a smaller supermarket chain known for its organic products, was acquired by Migros Zurich in 2012. The decision to expand into Germany seemed like a strategic move at the time, but has since proven to be a costly endeavor. Tegut has struggled to turn a profit, with losses totaling over 50 million francs already, not including the initial purchase price.
Experts in the retail industry have pointed out that Tegut’s business model is not sustainable in the highly competitive German market. The company’s focus on premium products and Swiss quality has not resonated with German consumers, who are known for their price sensitivity and lack of brand loyalty. As a result, Tegut has struggled to compete against larger competitors, leading to consistent losses for the company.
Despite the challenges faced by Tegut, Migros Zurich has remained committed to the venture. However, with mounting losses and a difficult market environment, experts are urging the company to consider selling Tegut and cutting its losses. While Migros Zurich remains optimistic about its future recovery, the future of Tegut remains uncertain.