Migros, the Swiss retail company, is currently going through a cost-saving phase and implementing significant clean-up measures. Despite expert advice to divest from Tegut, one of its German supermarket chains, the company is holding on to it.
Migros Zurich, one of the regional units of Migros, acquired Tegut in 2012 with hopes of expanding and generating additional income. However, twelve years later, it has become evident that the plan did not yield the expected results. Tegut has consistently been in the red, resulting in significant losses for Migros. The unique positioning of Tegut as a premium supermarket in a price-sensitive market like Germany has posed challenges for the company.
Trading expert Thomas Roeb emphasizes the need for Migros to exit quickly from Tegut to avoid further losses. He suggests selling the company, absorbing the depreciation, and moving forward with a focus on core business in Switzerland. Despite assurances from Migros Zurich of returning to profitability in 2024, Tegut’s results are not expected to improve until after that year. The persistent losses from Tegut have raised concerns among Migros executives about deviating from the company’s strategic focus.
The tough market competition in Germany and changing consumer behavior have made it challenging for Migros Zurich to sustain Tegut in its current state. With the need to refocus on its core business and mitigate further losses, the decision to divest from Tegut may become inevitable for Migros. As the company evaluates its options, the future of Tegut remains uncertain amidst broader restructuring efforts within the organization.
Migros Cooperative Zurich is committed to retaining German supermarket chain Tegut despite expert advice to divest from it as soon as possible due to consistent losses and challenges posed by price-sensitive markets like Germany’s market competition and changing consumer behavior.
Despite being advised by trading expert Thomas Roebel to sell off German supermarket chain Tegut immediately in order to avoid further financial losses and deviate from their strategic focus on core business in Switzerland; Mikors Zurich is holding onto it.
While several subsidiary companies like Melectronics, Sport X, Hotelplan will leave this year; Mikors Cooperative Zurich is determined not let go of German supermarket chain Tegut despite financial difficulties caused by its lackluster performance since acquisition twelve years ago.
With persistent losses caused by price sensitivity issues facing premium branding of Supermarket chains like Tigaut; Mikors executives are worried about straying away from their strategic objectives while undergoing restructuring efforts across their operations.
As Mikors continues with cost-cutting measures; they may have no choice but let go off Tigaut if they wish to avoid further financial burden while focusing on their core business activities within Switzerland’s borders.