Migros boss takes stock "We actually think it's wrong" - Irminger criticizes bread price battle
One year after the start of the price-cutting offensive, it is clear that customers are buying, but Migros has not yet made up any ground on the competition. Nevertheless, the group is continuing to expand - and is hoping for immigration.
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- Although Migros has seen an increase in volume thanks to the price cuts on 1000 products, it has not yet been able to win back any market share.
- The low-price strategy costs 500 million francs and is partly financed by cross-subsidization, while Migros simultaneously exerts pressure on brand manufacturers.
- With new stores and investments amounting to two billion francs, Migros also wants to benefit from population growth and increase profitability in the long term.
Around a year after the start of the large-scale price-cutting offensive, Migros CEO Mario Irminger gives an initial interim assessment on SRF's "Eco Talk": yes, customers are buying - and much more frequently.
There has been a "disproportionate increase in volume" in the affected product ranges. However, the retail giant has not yet regained market share, says Irminger.
The starting signal was given on October 28, 2024: Migros lowered the prices of around 1,000 products - from vegetables and fruit to meat and organic items. The aim of the billion-euro campaign was to give customers no more reason to shop at competitors such as Aldi or Lidl.
Since then, the products have been marked with yellow low-price stickers. A challenge to the German discounters - with a high price.
High costs, low margins
Migros is spending CHF 500 million on its low-price strategy. Irminger openly admits that not every product is profitable. Certain items - such as bread - are cross-subsidized.
Under pressure from the market, Migros has had to follow suit with bread prices, although Irminger himself criticizes such price wars: "We actually think they are wrong."
Officially, Migros emphasizes that it adheres to industry guideline prices and does not put pressure on local manufacturers such as Ricola, Rivella or Zweifel. But behind the scenes, other tones can be heard.
Growth through immigration - and new stores
Migros is trying to obtain better conditions, particularly from major brands such as Nestlé, Lindt & Sprüngli and Coca-Cola. One prominent winner: Lindt products are soon to return to the shelves.
Demographic trends also play a role. The high level of immigration each year means potentially tens of thousands of new consumers for the retail trade.
Irminger sees untapped potential here and wants to score points by expanding 140 new stores and renovating existing ones. Two billion francs will be invested in this over the next five years.
Doubts about the strategy
But not all experts are convinced. Jörg Staudacher from the Swiss Institute for Distribution and Retailing sees the strategy as a dangerous development: "Migros is primarily attracting bargain hunters who are disloyal, and is virtually educating customers on price."
The danger: customer loyalty falls by the wayside. Irminger disagrees: "Only a fraction of the products have been reduced in price - around 1000 out of a total of 12,000.
The price reductions are only one part of a comprehensive strategy that also includes investments and increasing efficiency. His goal: to return to profitability of 2.5 percent in four to five years - like his competitor Coop.
