Tegut throws in the towel in Germany: How Migros sealed its €600 million debacle
It’s official: The orange giant is pulling out of Germany for good. After years of struggling, Migros is selling its subsidiary Tegut to German rival Edeka. While this might sound like a routine business deal, it actually marks the end of one of the most expensive adventures in Swiss economic history. We're talking about a loss that really stings: a whopping €600 million down the drain. It's a fiasco that won't be forgotten anytime soon at the headquarters on the Limmat.
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 premium price. The idea was simple: combine their know-how with Tegut's strong foothold in the organic market and make it big together. But the plan backfired. The market is fiercely competitive, and German shoppers are loyal – just not to Migros. Year after year, they were in the red, and the healthy profits from Switzerland had to plug the hole in Hesse. It was a bottomless pit, and now the Zurich-based retailer has finally called it quits.
What's next for the stores?
For the around 300 Tegut outlets, this deal means an uncertain future under new ownership. Edeka, the industry giant, is taking over. This will have real consequences, including for branches some of us might know from our travels:
- Tegut... gute Lebensmittel Perlach: This outlet in Munich's suburbs 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 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: heavy on organic, rooted in Hesse, with a certain charm. Edeka is more of the sharp, efficient giant. Whether the soul of the brand will survive on the shelves? I doubt it, honestly.
The price of failure
Let's look at 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: investments in digitalisation, expanding outlets in Switzerland, or even a fat dividend for cooperative members. Instead, it was burned in a hopeless fight for market share in the German sticks. Migros's leadership, with President Andrea Broggini and CEO Mario Irminger, is now clearing the decks – a tough but necessary move. They're refocusing on the core business, back 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 real lesson in expansion. Not every brand works everywhere. Migros is a cultural institution 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 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.