Migros bosses want to streamline the group’s operational structure
Keystone / Peter Klaunzer
Supermarket chain Migros, one of the largest employers in Switzerland, wants to call time on its tradition of decentralised operations by merging its regional cooperatives.
How did this come about and what happens next?
Migros group’s core business is barely profitable any more, and its supermarkets are struggling with low margins. This is evident from an analysis of the results of the ten regional cooperatives.
Last year, the Zurich regional co-operative made a loss of CHF180 million. Migros in Ticino, in southern Switzerland, is also in the red. Supermarkets in Ticino and Geneva face competition from low-cost chains based in neighbouring countries.
By dissolving the regional societies and merging them into a group cooperative, Migros aims to make savings and streamline operations.
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The previous Migros structure gave each cooperative a great deal of power, giving rise to the term “regional prince”. Each regional cooperative has its own management with its own chair and keeps its own accounts with separate annual reports.
This decentralised organisation has led to several scandals. For a long time, for example, there was turmoil within the Neuchâtel-Fribourg cooperative.
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The Neuchâtel-Fribourg internal conflict escalated seven years ago when its then president was accused of fraud and embezzlement.
Migros group headquarters in Zurich attempted to remove the Neuchâtel-Fribourg leadership, which led to a vote of the 50,000 local cooperative members.
Irregularities occurred during the vote, involving forged ballot papers. The case highlighted the weaknesses of the decentralised organisation.
The regional cooperative in Zurich failed in a foreign venture that squandered several hundred million francs. In 2013, Migros Zurich took over the organic supermarket chain Tegut in Germany. But this resulted in financial losses and the German chain being put up for sale.
This example, too, highlighted the shortcomings of the decentralised organisation.
The Migros group merger will now centralise completely different cooperativee, both large and small. In terms of sales figures, the Zurich cooperative is the largest, with a turnover of around CHF4 billion.
The Eastern Switzerland cooperative, on the other hand, has the most employees, at 8,466. The smallest cooperative is in Ticino. However, all ten cooperatives support the merger.
It remains to be seen how many jobs will be cut following the merger. Since 2018, Migros has shed or outsourced almost 15,000 posts.
Migros has sold off a number of subsidiary companies, including Hotelplan, Globus, Melectronics, SportX, Micasa and Mibelle. The sale of Tegut in Germany will result in the loss of a further 7,000 jobs this year, with the employees transferring to the new owner.
The regional cooperative merger needs the blessing of Migros’s 2.3 million cooperative members who will vote on the proposal. A turnout of at least 25% and a two-thirds majority are required.
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Migros aims for efficiency gains with merger of cooperatives
Translated from German, sub-edited by Matthew Allen/ac
