Mega downsizing and profit collapse: Migros lost momentum – Coop is catching up strongly

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Just bronze instead of the usual gold. As GfK’s annual reputation report published a few days ago shows, Migros’ good reputation is no longer a guaranteed success. GfK market researchers conclude that the orange giant “loses out especially in terms of social and moral appreciation.” And he fell to third place, still a place on the podium.

But that’s not all: Migros now also needs to write off 15 million francs in connection with the failed financial con artist René Benko (46) and the Signa group. It’s child’s play compared to the mega value adjustment that Migros has publicly announced for 2023: half a billion francs! The majority of these are related to real estate, investments and IT projects. There are no details about this.

You’re not used to this kind of imitation coming from a major distributor. Migros never made a loss. According to Migros, this is the worst result since 1985. The result of the huge loss: Profits fell by 62 percent to 175 million francs. Last year, 459 million profits were made.

Migros Bank saved from red figures

Without Migros Bank, which contributed 313 million francs to the group’s results, Migros would have been at a loss. It is difficult to imagine what would have happened without the financial subsidiary. However, it is out of the question for Migros to go bankrupt, as some financial media predicted.

Migros boss Mario Irminger (58) has made clear again over the last twelve months that the orange empire remains financially sound despite the decline in profits and is not effectively financed from external sources.

Migros lost momentum

But what Irminger cannot deny is that his company is not in good shape at the moment and Migros is losing momentum.

When the GfK reputation survey was actually implemented, Migros employees and the public became aware of this huge discount. Migros showcased Hotelplan, SportX, Mibelle and Melectronics on February 2. Since then, the subsidiaries have been looking for a buyer. They no longer have a place in the Migros universe.

Boss Irminger can’t provide any news on the status of sales on Tuesday, even if the 8,000 affected employees had hoped for it. What really bothers the Migros boss: It takes a particularly long time to find a socially acceptable solution for Dutti icon Hotelplan.

This means precious time will pass, and opponent Coop clearly has the momentum on his side.

Symbolically, Coop CEO Philipp Wyss (58) did not hold his annual media conference in a windowless corporate conference hall like Migros. In mid-February, he proudly and cheerfully spoke of business figures in front of astonished supermarket customers of the Coop megastore in Oberwil BL.

Coop also dropped in the reputation rankings (from 7th to 8th). Other than that, things are going great for Wyss. There is no need for a major renovation, but it has managed to increase its market share.

Migros versus Coop: The two giants and their numerous companies together control around 80 percent of Swiss retail trade. A direct comparison shows that in terms of total number of employees, Migros lags behind Coop after layoffs.

Migros continues to be the largest private sector employer in the country. But here too Coop can lay the groundwork. Bike World, Do it + Garden, Obi and Micasa are also put to the test. “We are making significant losses in specialty stores and this is reducing our profitability,” says Irminger. He promises to communicate the decisions in the summer.

Migros is still slightly ahead in supermarket sales. In terms of total sales, Coop surpassed its rival. Once all four sales are completed, the difference will increase by another 3 billion francs.

Ultimately, Irminger no longer expects larger value adjustments in the future: “This adjustment was necessary and is a one-time thing.” You don’t want to be back to where you are today in three to five years.

The only question is whether it will take 3-5 years for Migros to get back on track.

Source :Blick