Tegut's Exit from Germany: How Migros Sealed its €600 Million Debacle
It's official: the orange giant is pulling out of Germany completely. After years of struggling, Migros is selling its subsidiary Tegut to German rival Edeka. What sounds like a run-of-the-mill transaction is, in truth, the end of one of the most expensive ventures in recent Swiss corporate history. We're talking about a loss that's genuinely staggering: the debacle has cost them a cool €600 million. It's a fiasco that won't be forgotten anytime soon in the corridors of power back in Zurich.
A Money Pit in the Provinces
Remember when Migros, with its green cross, proudly expanded into Germany? Back in 2013, they treated themselves to the organic specialist Tegut, paying a hefty price. The idea was simple enough: combine their own know-how with Tegut's strong foothold in the German organic market and really make a go of it. But the plan backfired. The market is fiercely competitive, and German shoppers are loyal – but not to Migros. Year after year, they were in the red, and the healthy profits from Switzerland had to plug the hole in Hessen. It was a bottomless pit, and now the Zurich-based retailer has finally put a lid on it.
What Happens to the Shops Now?
For the roughly 300 Tegut locations, the deal means an uncertain future under a new flag. Edeka, the market leader, is taking the reins. This will have real consequences, including for stores some of us might know from travels:
- Tegut... gute Lebensmittel Perlach: This branch in Munich's commuter belt will likely soon be flying the green Edeka banner. The big question for regulars in Perlach 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 employees there, a period of uncertainty begins – will they keep their jobs? What will happen 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 a sharp-elbowed, efficient giant. Will the soul of the brand survive on the shelves? I have my doubts. If I had to guess, I'd say probably not.
The Price of Failure
Let's stick with the cold, hard numbers for a moment. A €600 million loss – that's not exactly small change. It's more than some Swiss SMEs turn over in a year. Just imagine what could have been done with that money: investments in digitalisation, expanding stores in Switzerland, or even a tidy dividend for cooperative members. Instead, it was burned in a hopeless battle for market share in the German provinces. Migros's leadership, under President Andrea Broggini and CEO Mario Irminger, is now clearing the decks – a tough but necessary move. They're refocusing on the core business, on Switzerland. It's painful, but it's the only right decision after years of stumbling.
An Obituary for the Swiss Dream in Germany
For those of us watching, it's a cautionary tale about expansion. Not every brand works everywhere. In Switzerland, Migros is a cultural institution, a piece of home. In Germany, it was just another foreign supermarket operator. The attempt to build an organic island with Tegut in a sea of discounters has failed spectacularly. 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. An expensive experiment that proved one thing: the orange just doesn't taste as sweet everywhere.