Wholesaler cuts many prices "Migros is now putting a lot of pressure on producers"

On Monday morning, Migros announced the reorientation of its supermarkets. blue News talks to an expert: Will Migros now become the new discounter?

On Monday morning, the management of the Federation of Migros Cooperatives gathers in front of the media. The struggling retailer plans to invest CHF 2.5 billion to open new stores, modernize existing ones and reduce prices, according to the press release.

Migros also plans to open 140 new supermarkets over the next five years. The number of stores is to increase from 790 to 930. Price reductions are part of the planned measures. Over 1,000 everyday products will be reduced "to discount level", it is said.

Retail expert assesses

But is this even realistic and will Migros become the new discounter in the future? blue News spoke to a retail expert.

"Lidl and Aldi have recently been running a big discount campaign. I can imagine that this is one of the reasons for the big price reduction at Migros." A similar development can be observed at Coop, for example.

The expert says: "Aldi has very attractive wine prices and the range has grown in recent years. For some time now, Coop has increasingly been offering special prices on its entire wine range." That wasn't the case before. It could be similar at Migros now. To be fair, you have to say that Aldi and Lidl are doing a good job. However, this increases the pressure on Migros and Coop.

Migros' own brands are an important part of the reorientation

Migros is in crisis. That is no secret. Apart from job cuts and the sale of its specialist stores, Migros is now focusing on its own products. The retail expert says: "For Migros, its own products are very important and part of its image. The fact that Migros is now focusing on its own brands is a good thing." After all, this was ultimately the key to its success.

However, there is already a discounter in the Migros universe: Denner. Is Migros now outdoing the in-house discounter with its low prices? The expert says no: "It's clear that Denner is focusing on alcohol and tobacco, as Migros doesn't sell these goods." Migros can therefore focus on its own products, while Denner sells branded products, alcohol and tobacco.

Another advantage of own brands is: "In many places in Switzerland, there is not just one Migros store, but often an Aldi, a Lidl or a Coop nearby. Migros can set itself apart from the competition with its own brands."

Now Migros has to negotiate - if it hasn't already done so

But how can Migros reduce prices if production costs and purchasing margins remain the same? The expert has a guess. "I think Migros is now putting a lot of pressure on producers."

If a retailer wants to reduce prices, it is imperative that production prices change. Otherwise the concept would not be profitable. Migros will or has already had to negotiate hard.