Power struggle at Migros: winners and losers at Supermarket AG

The Migros supermarket business is the most important part of the Dutti universe and accounts for almost half of total sales. Migros boss Irminger rightly says that “Supermarket business is the core of Migros” and now everything has to give up control of this core.

urgently needed

Still, putting together supermarket activities is a half step in the right direction. No other retailer can own complex structures like Migros. Migros had to do something, and in recent years it has lost its market share to the competition. Migros President Ursula Nold (54) had to admit in an interview with Blick TV, “We were not satisfied with the market development in recent years”. “It needs productivity gains across the entire value chain.”

Only: These increases in efficiency will take some time to take effect. Preliminary work on Supermarket AG will begin next week and the new business unit with around 700 employees is expected to be operational from January 2024. The upcoming – minor – cultural change is causing tension in the headquarters corridors, the transformation will not pass without friction. Irminger says things can get cut off.

Eliminate duplication

Migros will be busy with itself for a while, meanwhile, the world of retail trade is spinning faster with each passing day. In addition, the individual regional cooperatives still have a lot to say, their power is now evenly divided between the supervisory bodies of the FMC and the new supermarket AG, nicknamed MSM.

MSM management also comes from the regions, Diethelm Migros was the chairman of Ostschweiz. Regionalism is both Migros’ strengths and weaknesses: “There are several iterations today, so the value chain is being revised,” says Supermarket AG CEO.

The purpose of joining forces is to make more money again. Migros targets a 2.5 percent EBITDA margin for supermarkets. This means that for every CHF 100 on sale, CHF 2.50 should ultimately remain as profit. Migros is far from that right now.

Customers can hope for lower prices

With the orange giant now having some sort of foreign minister in MGB boss Irminger, Diethelm needs to maintain internal purification and cost discipline. And Nold, the head of the administration, has enthroned above everything else – a clear hierarchy looks different. Even if Nold stressed: “Everyone pulls the same string.”

You have to give Migros a chance for the transformation to work. On the other hand, if the orange giant continues to crackle, the admin floor should also be ready to make further adjustments quickly.

What difference do customers make in transforming the corporate headquarters? Ideally, nothing, this is the opinion of the headquarters and district princes. Because regional products are still available. If all goes as planned, products sold at all branches throughout Switzerland can be supplied more efficiently. If the calculation is correct, the customer should most clearly feel the half digit at lower prices.