Tegut's German exit: How Migros sealed its €600 million disaster
It's official: the orange giant is pulling out of Germany entirely. After years of failure, Migros is selling its subsidiary Tegut to German rival Edeka. What sounds like a routine transaction is, in truth, the end of one of the most expensive ventures in Swiss corporate history. We're talking about a loss that's nothing short of staggering: €600 million is what this debacle has cost. A fiasco that won't be forgotten anytime soon in the halls along the Limmat.
A billion-euro grave in the provinces
Remember when Migros, with its green cross logo, proudly expanded into Germany? Back in 2013, it treated itself to organic specialist Tegut, paying a hefty price. The idea was simple: combine the Germans' expertise with their strong foothold in the organic market and make a big splash together. But the plan backfired. The market is fiercely competitive, and Germans are loyal shoppers – just not to Migros. For years, the books were in the red, and fat profits from Switzerland had to plug the hole in Hesse. It was a bottomless pit, and now the Zurich-based retailer has finally put a lid on it.
What now for the stores?
For around 300 Tegut locations, the deal means an uncertain future under new ownership. Edeka, the market leader, is taking the helm. This has concrete implications, including for branches many of us might know from travels:
- Tegut... gute Lebensmittel Perlach: The branch in Munich's affluent suburbs will likely soon operate under the green Edeka banner. Whether the organic range will remain as extensive is the big question now for regular customers in Perlach.
- Tegut... gute Lebensmittel Triebstraße: The city-centre branch in Kassel's Triebstrasse is also affected by the takeover. For the staff there, a period of uncertainty begins – will they be taken on? What will happen to their employment contracts?
The big unknown is the identity. Tegut was always a bit different: organic-focused, rooted in Hesse, with a certain charm. Edeka is more the edgy, efficient giant. Whether the soul of the brand will remain on the shelves? I'll venture a guess: probably not.
The price of failure
Let's stick to 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. Imagine what could have been done with that money: investments in digitalisation, expanding branches in Switzerland, or simply a fat dividend for cooperative members. Instead, it was burned in a hopeless fight for market share in provincial Germany. The Migros leadership, with President Andrea Broggini and CEO Mario Irminger, is now clearing the decks – a tough but necessary cut. They are refocusing on the core business, on Switzerland. It hurts, but it's the only right decision after years of stumbling.
An obituary for the Swiss dream in Germany
For us observers, this is a lesson in expansion. Not every brand works everywhere. Migros is a cultural asset in Switzerland, 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 failed spectacularly. Now they're pulling the plug, and Edeka is buying up the remains. It's the end of an era that never really got to begin. An expensive experiment that proved only one thing: the orange just isn't as sweet everywhere.