Tegut's Exit from Germany: How Migros Sealed Its $650 Million Euro Debacle
It's official: the orange giant is completely pulling out of Germany. After years of struggling, Migros is selling its subsidiary Tegut to German rival Edeka. What sounds like a standard transaction is, in reality, the end of one of the most expensive ventures in Swiss economic history. We're talking about a loss that's staggering: 600 million euros down the drain. It's 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, proudly expanded into Germany? Back in 2013, they snapped up the organic pioneer Tegut, paying a hefty price. The idea was simple: combine German expertise with their 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 bled red ink, with hefty profits from Switzerland having 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 Stores Now?
For the roughly 300 Tegut locations, the deal means an uncertain future under a new banner. Edeka, the market leader, is taking the helm. This will have concrete repercussions, including for stores many of us might know from travels:
- Tegut... gute Lebensmittel Perlach: The store in Munich's suburbs will likely soon be flying the green Edeka flag. The big question for regulars in Perlach is whether the organic selection will remain as extensive.
- Tegut... gute Lebensmittel Triebstraße: The downtown Kassel store on Triebstraße 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: heavy on organic, rooted in Hessen, with a certain charm. Edeka is more of the sharp-elbowed, efficient giant. Whether the soul of the brand will survive on the shelves? I'd venture a guess: probably not.
The Price of Failure
Let's stick with the cold, hard numbers for a moment. A loss of 600 million euros – that's no small change. That's more than some Swiss SMEs generate in annual revenue. Imagine what could have been done with that money: investments in digitalization, expanding stores in Switzerland, or simply a hefty dividend for the cooperative members. Instead, it was burned in a hopeless fight for market share in the German provinces. Migros leadership, under President Andrea Broggini and CEO Mario Irminger, is now cleaning house—a tough but necessary cut. They're 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 name works everywhere. In Switzerland, Migros is a cultural 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 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 only: the orange just doesn't taste as sweet everywhere.