Financial pressure and the failings of decentralisation have prompted an overhaul. Members will have the final say.
Migros is rethinking its structure as financial pressures mount. Its ten regional co-operatives face stiff competition, uneven fortunes and questions about their governance. Last year the Zurich co-operative lost CHF 180m. Its troubled expansion into Germany helps explain why.
An expensive German venture
In 2013 Migros Zurich bought Tegut, a German organic supermarket chain. The investment has cost it several hundred million francs, and the business is now being sold. It is another failed foreign venture for the Zurich co-operative—and an example of the risks posed by Migros’s decentralised structure.
Competition is also intensifying at home. Aldi and Lidl, two German discounters, are squeezing Migros. Its Ticino co-operative is losing money. Supermarkets in Ticino, Basel and Geneva must also compete with shops across the border.
Regional power, regional problems
Each co-operative has its own management, board and accounts, and publishes a separate annual report. This autonomy gives regional bosses considerable power. It has also contributed to governance failures.
A long-running dispute at the Neuchâtel-Fribourg co-operative came to a head seven years ago, when its then president was accused of fraud and embezzlement. Migros’s headquarters in Zurich tried to oust him. Some 50,000 members took part in the ensuing vote, which was marred by falsified ballots. The affair exposed weaknesses in the group’s decentralised governance.
Unequal partners
The proposed merger would unite businesses of markedly different sizes. Zurich is the largest by sales, with annual turnover of about CHF 4bn. Eastern Switzerland employs the most people: 8,466. Ticino is the smallest.
All ten co-operatives support the merger, as they made clear at a press conference in Bern.
A shrinking group
How many jobs the merger would cut remains unclear. Since 2018 Migros has cut or outsourced almost 15,000 jobs. It has sold businesses including Hotelplan, Globus, Melectronics, SportX, Micasa and Mibelle.
The sale of Tegut will take more than 7,000 employees off Migros’s payroll this year. They will transfer to the new owner.
Members must agree
The regional leaderships’ support does not guarantee success. The final decision rests with Migros’s 2.3m co-operative members. At least 25% must vote, and two-thirds of those voting must back the proposal.
In practice, almost anyone can vote: membership is available online, and ballots can be cast electronically. What’s one more vote in Switzerland’s direct democracy?
More on this:
Migros vote information (in French) – Take a 5 minute French test now
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