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In May, he took the top job at Migros, Switzerland’s largest private employer: Mario Irminger (58), Denner’s longtime boss. Since then, the most comprehensive renovation in the history of the Dutti universe has been ongoing. In focus: Supermarket AG. Migros, which is managed regionally, wants to make its main business more profitable by centralizing it in supermarkets. Migros Cooperative Federation (MBG) General Directorate needs to transfer control of the new unit. Still, for his first big interview, Irminger insists on taking photos in the supermarket in the basement of Migros’ headquarters in Zurich.
Blick: Mr. Irminger, the photo shoot should be done in front of the typical Migros bread stand on the premises of the AG supermarket run by Peter Diethelm. Do you want to show your power?
Mario Irminger: When consumers say Migros, they mean the supermarket. This business is the heart of Migros. That’s why it’s important for me to be at the forefront. I’m not interested in a show of force.
Your predecessors were in office for decades. Now the balance of power in the company is changing. How do you deal with this?
It is wrong that the MGB boss is actually the Migros boss and has a say in everything. The situation was no different for those before me. The presidents of MGB and ten regional Migros cooperatives consist of eleven decision-makers with operational responsibility. One of my duties is the external communication of the entire Migros Group. By the way, I didn’t set out to lead as big an empire as possible. I stayed inside as a trader.
You took responsibility for nearly 100,000 employees for 6 months. What does this great responsibility give you?
I am inspired in my work, but the challenges are huge. For example, the issue of climate change interests me very much because Migros is largely dependent on agriculture. Supermarkets and specialty stores are where we need to reposition ourselves to overcome the current challenges within the Migros Group.
They are turning the core business inside out and packaging the supermarkets into a new unit. Was a lawsuit filed against the renovator at Migros?
No, there is no need for a renovator, Migros is in a good financial situation. However, profits shifted away from the core business towards retail (Migrolino, Denner’s note) and Migros Bank, which was performing very well operationally. We have been losing significant market share in supermarkets for over a decade; For example, our Denner was able to benefit much more from population growth during this period. We can sometimes be inefficient and do not always offer our customers the best value for money. We want to get back on the path to success with the new supermarket AG.
What advantages does Supermarket AG provide to customers?
We missed out on renewing our store network in certain regions and continuing to expand with smaller store formats that meet customer needs. Now we’re changing that. We also standardize the range of services and products for our customers throughout Switzerland. Greater efficiency also means we can offer good prices to our customers to ease the increasing burden on households from booming health insurance premiums, electricity prices and more.
Don’t you get bored of your customers when everything can be purchased the same way everywhere?
Not at all, because the ten cooperatives will continue to offer their regional and local products, especially fresh produce.
Will the restructuring lead to staff reductions?
I cannot rule out reducing headcount as we eliminate duplication, which should lead to increased efficiency. We know how many jobs will be lost next year. We currently have 1,700 vacant positions throughout the Migros Group. In Switzerland, we not only have a shortage of skilled workers, we are also rapidly heading towards a labor shortage.
Migros is still very complex, almost no one can get through it anymore. Is this why delegates have such a hard time with restructuring?
Migros has its own, federal and grassroots democratic system. The ability of cooperative members to vote on certain issues whether they want to or not is not available on this scale anywhere in the world. Even though it’s hard sometimes, I think it’s great.
The assembly of delegates will vote on downsizing the MGB administration on November 11. Two months ago you wouldn’t have survived this. What would you like the delegate to propose now?
We propose to significantly reduce the number of administration from 23 to 13 people. There should be only 5 representatives from the regions, 5 external representatives, the president and two employee representatives.
Are you giving up your vote?
Until now, the Head of the General Directorate was also a member of the management. From now on, I will no longer have the right to vote, but I will continue to be there as an advisory member.
These 110 delegates will also vote on the establishment of Supermarket AG. Just a formality?
I am sure that we will find a majority in favor of reducing the size of the administration as well as all agenda items regarding Supermarket AG. This will create the official framework so that we can launch the new unit as planned on January 1, 2024.
You are seen as a manager with “efficiency thinking in your genes”. Why not immediately place the M-Industrial companies under the jurisdiction of Supermarket AG?
Changing the technology base in the core business is a massive project that will keep us busy until the end of 2027. It is not possible for the sector to move here under the umbrella of Supermarket AG.
There is a buzz in Migros factories. Their boss is forced to vacate the position, and other executives, such as Micarna’s CEO, also leave. What is going on here?
There is nothing wrong here. Personnel changes are part of daily business life. Coincidentally, some departures overlap.
Its sales are close to 6 billion, but it was almost making a loss recently. Where did M-Industry, the main supplier of Migros supermarkets, disappear?
Gottlieb Duttweiler, the founder of Migros, helped himself and founded his own industry because many products were no longer available in his stores. More industries were added over time. We have recently lost sight of our main goal for Migros, to produce the best product at the cheapest price. If we reorganize the industry now, we will have to get rid of wildly growing activities.
What should M-Industry focus on?
Our industry must contribute to the country’s supply, become economical again, and regain its competitiveness.
It’s not just M-Industry that’s sick; Specialist shops such as Melectronics, SportX, Micasa and Do it + Garden are also apparently in the emergency department. What is your diagnosis?
It’s not about food, it’s about products that are now often only purchased online and at increasingly lower prices. Margins are falling and captive retail sales, where products such as home electronics, fashion or furniture are sold, are under extreme pressure. We put these expert formats to the test. We must find logical solutions to these because they are an active problem for us today.
When will the first decisions about specialist shops be made?
We will now carefully consider which specialist shops we will continue to work with in the future and to what extent. For example, as Melectronics we are talking about further integration of the product range in Migros supermarkets.
Can specialist shops also be sold or discontinued altogether?
In general, we are examining all options. A decision will then be made sometime next year. However, I would like to emphasize that Migros has a very broad position and other areas are also growing positively.
Do you expect another decline in Migros Group’s profits as in the last fiscal year?
I can’t give an exact number yet. We will grow sales in the single-digit percentage range throughout the group. I expect a much better result in terms of profit than last year. However, this year it is possible that we will have to make value adjustments, for example, regarding real estate.
Inflation also has something to do with annual results. Doesn’t it slow down consumption?
While food inflation rose to 5 percent in Switzerland, this rate was around 20 percent in its northern neighbors. Food has become cheaper for Swiss families in the last few decades. There are two reasons for this: Competition has become fiercer with the entry of two German discount stores into the market, and at the same time Switzerland has benefited from the euro becoming increasingly cheaper than the franc.
But shopping behavior has changed…
…of course that’s the case. Large price increases in healthcare, electricity and rents are having a huge impact on purchasing budgets. Disposable income is constantly decreasing as structural costs increase. This situation affects a large part of the household. So where is the easiest way to save money? If you give up the added value of a product and switch to standard goods or low-priced product lines. We are currently seeing this development in our stores.
What is Migros doing to ease the burden of households?
Taking into account the decreasing purchasing power, we are creating and expanding our product range to ensure that customers from all walks of life can buy products from Migros in their own price range.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
