Tegut's German Exit: How Migros Sealed Its €600 Million Disaster
It's official: the orange giant is pulling out of Germany completely. After years of struggle, Migros is selling its subsidiary Tegut to German rival Edeka. What sounds like a straightforward transaction is, in truth, the end of one of the most expensive ventures in Swiss corporate history. We're talking about a loss that really stings: a whopping €600 million down the drain. It's a debacle that won't be forgotten in a hurry in the boardrooms along the Limmat.
A Money Pit in the Provinces
Remember when Migros, with its green cross, proudly expanded into Germany? Back in 2013, they snapped up organic specialist Tegut for a tidy sum. The idea was simple: combine German expertise with their strong foothold in the organic market and make a real go of it together. But the plan backfired. The market is fiercely competitive, and German shoppers are loyal – but not to Migros. Year after year, the German arm bled red ink, and healthy profits from Switzerland had to plug the hole in Hesse. It was a bottomless pit, and now the Zurich-based retailer has finally put the lid on it.
What Now for the Stores?
For the around 300 Tegut locations, the deal means an uncertain future under new ownership. Edeka, the market leader, is taking the reins. This will have a tangible impact, including on branches some of us might know from our travels:
- Tegut... gute Lebensmittel Perlach: The store in Munich's commuter belt will likely soon be flying the green Edeka banner. The big question for loyal Perlach shoppers is whether the organic range will stay as extensive.
- Tegut... gute Lebensmittel Triebstrasse: The city-centre store on Triebstrasse in Kassel is also affected by the takeover. For the staff there, a period of uncertainty begins – will they keep their jobs? What happens to their contracts?
The big unknown is the identity. Tegut was always a bit different: focused on organics, rooted in Hesse, with a certain charm. Edeka is more of the sharp-edged, efficient giant. Whether the soul of the brand will survive on the shelves is debatable. My guess? Probably not.
The Price of Failure
Let's stick with the cold, hard numbers for a moment. A €600 million loss – that's no small change. It's more than some Swiss SMEs turn over in a year. Just imagine what could have been done with that money: investment in digitalisation, expanding stores in Switzerland, or even a tidy dividend for cooperative members. Instead, it was torched in a futile battle for market share in the German provinces. The Migros leadership, with President Andrea Broggini and CEO Mario Irminger at the helm, is now clearing the decks – a tough but necessary move. They're refocusing on the core business, on Switzerland. It's a painful but ultimately the only right decision after years of stumbling.
An Obituary for the Swiss Dream in Germany
For us observers, this is a cautionary tale about expansion. Not every brand name works everywhere. In Switzerland, Migros is an institution, a piece of home. In Germany, it's just another foreign supermarket operator. The attempt to build an organic island with Tegut in a sea of discounters has spectacularly failed. Now they're pulling the plug, and Edeka is picking up the pieces. It's the end of an era that never really got started. A costly experiment that proved one thing only: the orange doesn't taste as sweet everywhere.