The German supermarket chain, Migros, is currently facing major job cuts and scrutiny for unprofitable ventures. Despite this, the company has decided to hold onto its smaller supermarket chain, Tegut, despite experts advising to get rid of it as soon as possible.
Tegut was acquired by Migros Zurich in 2012 in an effort to expand into Germany. However, this decision has proven to be a costly endeavor. Tegut has struggled to turn a profit, with losses totaling over 50 million francs already. Experts in the retail industry have pointed out that Tegut’s business model is not sustainable in the highly competitive German market. The company’s focus on premium products and Swiss quality has not resonated with German consumers, who are known for their price sensitivity and lack of brand loyalty. As a result, Tegut has struggled to compete against larger competitors and consistently lost money.
While Migros Zurich remains committed to the venture, experts are urging the company to consider selling Tegut and cutting its losses. However, with mounting losses and a difficult market environment, the future of Tegut remains uncertain.
