2023-07-25 08:16:48
Migros is working on setting up a new company to centralize supermarket activities. This new structure, endorsed last May, will aim to lower costs, because the profitability of half of the cooperatives is struggling.
The activity of Migros supermarkets is in decline. Half of the ten regional cooperatives are indeed at the limit of the break-even point, according to figures published by the German-speaking daily NZZ.
Among them are those of the canton of Vaud, Valais, Geneva and Ticino, whose operating margin would be less than 1%. That of Zurich would even be in deficit, because despite the increase in attendance, the average basket of purchases has decreased.
Impact of inflation
The retail trade in Switzerland indeed suffered from a sluggish consumer climate last year. Consumption was held back by a decline in purchasing power. The prices of energy, transport, as well as packaging and logistics have risen sharply.
According to calculations by the Federal Statistical Office (FSO), the average annual inflation rate was 2.8% in 2022, compared to 0.6% the previous year. However, over the same period, nominal wages only increased by 0.9%, which means that in real terms, they fell by 1.9% over one year, the OFS had indicated in April.
>> Read once more: Migros posts a decline in profit for 2022
Reorganization
Faced with this drop in consumption, the orange giant is seeking to restructure itself. Migros obtained the support of the ten regional cooperatives last May to reorganize the operation of its supermarkets, which are to be consolidated into a new centrally managed company.
>> Read once more: Migros is working on a new organization via an independent company
The new company will be a subsidiary of the Federation of Migros Cooperatives (FCM), with a specific board of directors and management. Its supervisory body will include representatives of the parent company and regional cooperatives, who will be responsible for market development, operational distribution and the network of points of sale.
Certain tasks, such as the assortment of local products, will therefore continue to be carried out by the regional cooperatives, but the latter will have to collaborate more closely in various fields.
This project aims “to simplify the supermarket activity of Migros and to optimize its organization”. The objective is to “allow customers to benefit from even better value for money” and to regain profit margins of around 2.5%, which will inevitably involve reducing costs.
The future structure should be launched at the beginning of January 2024.
Radio subject: Sylvie Belzer
Web adaptation: edel with ats
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