Migros Zurich’s Bumpy Path in Germany: A Closer Look at Tegut
In recent years, Migros has been undergoing significant changes to reduce costs and streamline operations. Several subsidiary companies, including Melectronics, Sport X, Hotelplan, and Mibelle, have decided to leave the company. However, despite expert advice to divest from Tegut as soon as possible, Migros Zurich has decided to retain the German supermarket chain.
Migros Zurich acquired Tegut in 2012 with the goal of expanding its business and generating additional revenue. Twelve years later, it’s clear that this 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 presented challenges for the company.
Trading expert Thomas Roeb has emphasized the need for Migros to exit quickly from Tegut in order to avoid further losses. He suggests selling the company and absorbing the depreciation before focusing on core business in Switzerland. Despite assurances from Migros Zurich that Tegut will return to profitability by 2024, experts believe that improvements may not come until after that year. The persistent losses from Tegut have raised concerns among executives about deviating from the company’s strategic focus.
The tough market competition in Germany and changing consumer behavior have made it difficult for Migros Zurich to sustain Tegut in its current state. With a need to refocus on core business and mitigate further losses, it may become inevitable for Migros to divest from Tegut. As the company evaluates its options, uncertainty surrounds the future of Tegut amidst broader restructuring efforts within the organization.
Overall, while some subsidiary companies are leaving Mikros this year, Mikros Zurich is holding onto German supermarket chain Tegut despite expert advice suggesting otherwise. The persistent losses from Tegut have raised concerns among executives about deviating from Mikros’ strategic focus amidst broader restructuring efforts within the organization.
