The work begins for Migros: How to act with regional cooperatives that increasingly lead a life of their own and can hardly be controlled and controlled by the Migros Cooperatives Federation (MGB), which is the center of the group? At the same time, the core business with supermarkets is not really working properly and some cooperatives may even be in the red in this area by 2022.
Only subsidiaries such as Migrol (gas stations, heating oil), Denner Group or Migros Bank, and now also tour operator Hotelplan regularly generate profits and help ensure that the orange giant does not slip into the red.
The alcohol rating showed how deep the cracks were. It was thought that the sale of alcoholic beverages would be allowed if approval was given in individual cooperatives. This alone has caused many to doubt the shared Migros values.
Unable to agree on reforms
The departure of Fabrice Zumbrunnen (52) as Migros boss showed the start of a fierce power struggle between the regional cooperatives and the headquarters. Zumbrunnen was not the tamer needed in this office.
There is a disagreement among Migros experts, who can also evaluate the retailer from within, on which direction the orange giant and its cooperatives should move. One thing is clear: something must be done.
A former senior management member says there is some sort of consensus in some large cooperatives that the superstructure of the FMC is no longer needed. There are four regional cooperatives that specifically shape Migros: the big three – Aare, Eastern Switzerland and Zurich – and the smaller but innovative Lucerne cooperative. Migros seems to be stricken, there have been no structural reforms for decades. Does it really need ten regional cooperatives, maybe three or four larger units with centralized purchasing and logistics could be more powerful and efficient?
Migros specialist asks himself: “If Migros already votes for alcohol, why not for cooperatives?” After all, everyone at Migros is proud of cooperative democracy – both cooperatives and MGB.
Regional customer loyalty
Another source can imagine synergies in procurement and logistics, but is also aware of resistance. It has been said over and over again that a district manager without his own logistics is like a king without a kingdom. In addition, regional roots and proximity to customers should not be neglected. This speaks for the preservation of the existing structure.
Despite tough times in the retail trade, the level of suffering is apparently not great enough: “If only one co-op writes blood-red numbers, it’s willing to go under the FMC’s umbrella or team up with another co-op,” retail expert Gotthard F. Wangler (74) is convinced. says it is. But he also blames the regional princes. “They all sit on MGB’s board of directors, they also have to take responsibility for the entire group.” Wangler believes that only one of the regional leaders of one of the four strong cooperatives in Aare, Zurich, Eastern Switzerland or Lucerne can succeed Zumbrunnen.
Departures on the executive floor
Cooperation with cooperatives and company headquarters is not only a construction site, but also the VQA general directorate itself is increasingly becoming a problem area. After his announced departure, Zumbrunnen won’t break any more big cords until next spring. Sarah Kreienbühl (50), the person responsible for human resources and communication, is leaving Migros at the end of the year. This means that a second position in Headquarters remains vacant. Meanwhile, Kreienbühl’s direct subordinate Personnel Manager Reto Parolini also resigned at the end of January.
Competition also puts a lot of pressure on orange giants, primarily Aldi and Lidl. Both discount companies open ten supermarkets a year, pushing into cities, occupying main train station sites like Aldi in Zurich. Together they have 400 branches in Switzerland and an estimated turnover of around 5.5 billion francs.
For comparison: its discount rival Denner hit 3.8 billion francs last year. Aldi and Lidl thus explore their competitors’ sales and increased price pressure. Your business thrives when people scrutinize their spending, especially when it comes to food and drink, as they are currently doing due to inflation.
The retailer cannot always achieve the price leadership that Migros targets for many products, especially in smaller branches where the product range is narrowed. In a random sample of 30 “K-Tipps” products, Migros ranked fifth after Aldi, Lidl, Coop and Denner.
Ursula Nold (50) would now be needed. However, Migros President remained silent, repeated requests for meeting remained unanswered.