Tegut before the end in Germany: How Migros sealed its 600 million euro debacle
It's official: The orange giant is withdrawing completely from Germany. After years of failure, Migros sells its subsidiary Tegut to its German rival Edeka. What sounds like a normal transaction is actually the end of one of the most expensive excursions in Swiss economic history. We are talking about a loss that has been washed away: the debacle cost 600 million euros. A fiasco that will not be quickly forgotten in the halls on the Limmat.
A billion-dollar grave in the province
Do you still remember the times when Migros proudly expanded into Germany with its green cross? In 2013, they treated themselves to the organic forge Tegut and paid a hefty price for it. The idea was simple: combine the Germans' know-how with their strong foothold in the organic market and make the store big together. But the calculation didn't work out. The market is highly competitive, the Germans are loyal customers - but not Migros. For years we were in the red and the big profits from Switzerland had to plug the hole in Hesse. It was a bottomless pit, and now the Zurich retailer has finally put the lid on it.
What will happen to the shops now?
For the approximately 300 Tegut locations, the deal means an uncertain future under a new flag. Edeka, the top dog, takes over the helm. This has concrete effects, including on the branches that many of us may know from travel:
- Tegut... good food Perlach: The branch in Munich's suburbs will soon run under the green Edeka banner. The big question that regular customers in Perlach are now asking themselves is whether the organic range will remain the same.
- Tegut... good food Triebstraße: The Kassel city center branch on Triebstraße is also affected by the takeover. A period of uncertainty begins for the employees there - will they be taken on? What will happen to your employment contract?
The big unknown is identity. Tegut was always a little different: organic, with Hessian roots, with a certain charm. Edeka is more of an angular, efficient giant. I dare to quantify whether the soul of the brand will remain on the shelves. My guess is: probably not.
The price of failure
Let's stay with the cold mathematics for a moment. 600 million euros loss – that’s not peanuts. That's more than some Swiss SMEs make in a year. Imagine what you could have done with this money: investments in digitalization, the expansion of branches in Switzerland or simply a hefty dividend to the cooperative members. Instead, it was burned in a hopeless battle for market share in provincial Germany. The Migros leadership around President Andrea Broggini and CEO Mario Irminger is now making a clean sweep - a hard but necessary cut. The focus is again on the core business, on Switzerland. It hurts, but it's the only right decision after years of wobbling.
An obituary for the Swiss dream in Germany
For us observers, this is a lesson in expansion. Not every brand name works everywhere. Migros is a cultural asset in Switzerland, a piece of home. In Germany it is simply another foreign supermarket operator. The attempt to build an organic island in a sea of discounters with Tegut failed spectacularly. Now you pull the plug and Edeka buys the leftovers. It's the end of an era that was never really allowed to begin. An expensive experiment that only proved one thing: oranges are not equally sweet everywhere.