In recent years, Migros has been going through a cost-saving phase and is taking significant clean-up measures. Despite expert advice to divest from Tegut as soon as possible, the company is holding onto the German supermarket chain. However, despite its commitment to retaining Tegut, the chain has consistently been in the red, resulting in significant losses for Migros.
Migros Zurich 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. 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 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 part of its broader restructuring efforts within the organization, Mi