Migros boss announces change of course "We made customers pay for mistakes for too long"

After years of expansion mistakes and loss of market share, Migros is now planning a massive price-cutting offensive. CEO Mario Irminger admits to missteps - a radical change of course should win back customers.

Mario Irminger, President of the Executive Board of the Federation of Migros Cooperatives, is not sparing in his criticism of Migros' past: customers have paid high prices to finance the company's failed expansion strategy. "You can certainly draw that conclusion," he says on SRF's "Samstagsrundschau".

In recent years, Migros has bought and founded numerous companies, but has now sold most of them again. According to Irminger, Migros has been punished by the market for this strategic U-turn: "There is a reason why we have lost over five percent of our market share in the last ten years."

Migros had reacted too late to the changing needs of customers, including lower prices and the trend towards smaller stores. In order to catch up, the company announced price cuts at the beginning of this week: Around 1000 everyday items are soon to reach the price level of the discounters Aldi, Lidl and Denner.

Products cost more than the competition for days

The price offensive got off to a bumpy start: for days, for example, lamb's lettuce cost more online than at the competition. The price correction was only made after the recording of the "Samstagsrundschau", as SRF writes.

Despite initial problems, the announced 1000 price reductions are to be implemented gradually by next year. Irminger quantifies the expected savings for the first time: "We expect customers to buy the same amount at a total of CHF 350 to 370 million less per year."

Measured against the total turnover of Migros supermarkets, however, this corresponds to a discount of only around three percent. Irminger defends the measure and emphasizes that the price reductions could have a long-term impact of up to two billion on sales over the next four to five years.

Pressure on suppliers to increase

The price cuts are causing concern among farmers. Although Migros has given assurances that farmers will earn the same amount despite the lower prices, questions remain unanswered - especially if price competition intensifies further. However, Irminger promises: "We'll see it through - that's my promise." The pressure on international suppliers, on the other hand, is to be increased.

The radical upheaval at Migros began at the start of the year when the sale of the sports, electronics, garden and furniture stores and the reduction of 1500 jobs were announced. Criticism of Migros had become loud, above all because even pregnant women and women on maternity leave were affected by redundancies. Irminger admits mistakes: "These were individual cases that were unfortunate."

Costs for organic products and Swiss meat too high

The Migros brand traditionally stands for sustainability and animal welfare, but even here there are compromises: The goal of applying the same minimum standards to imported meat as for Swiss meat has been abandoned. Imported organic products are also not subject to the strict Bio Suisse guidelines.

According to Irminger, the costs would be too high. Although Migros continues to provide information on ecological issues and sustainability, Irminger emphasizes: "We don't want to educate the people. We sell what is in demand."

With this price and strategy offensive, Migros is facing a balancing act between cost reduction and customer loyalty - while at the same time struggling to preserve its "DNA".