Migros

Migros () is one of Switzerland's largest enterprises, its largest supermarket chain and largest employer. It co-founded Turkey's largest retailer, Migros Türk, which became independent of Migros Switzerland in 1975.

The name comes from the French "mi" for half or mid-way and "gros", which means wholesale. Thus the word connotes prices that are halfway between retail and wholesale. The logo of the company is a large orange M, which some Swiss newspapers call "the orange giant" (, ). The firm's loyalty card is the M-cumulus card (a play on the word accumulate and a type of cloud formation).

History

Migros was founded in 1925 in Zürich as a private enterprise by Gottlieb Duttweiler, who had the idea of selling just six basic foodstuffs at low prices to householders who, in those days, did not have ready access to markets of any kind. At first he sold only coffee, rice, sugar, noodles, coconut oil and soap from trucks that went from one village or hamlet to another. Later he and his drivers expanded their inventory and in 1926 Duttweiler built his first market, also in Zürich. His second store, in Ticino, presaged the future because it was founded as a cooperative. By 1941 the energetic entrepreneur had built a number of markets but in that year he basically gave the business to his customers by transforming everything from his privately owned enterprises into regional cooperatives, headed by the Federation of Migros Cooperatives (FCM) (, ).

designed Bern's 1987 Migros OM supermarket]] As early as 1935, Duttweiler showed his zest for expansion by founding the Hotelplan travel agency. Later the Migros brand was applied to a weekly magazine, Wir Brückenbauer (now known as Migros Magazin) in 1942. Other ventures were restaurants in 1952, gasoline stations (Migrol) in 1954, language schools (Eurocentres) in 1956, a bank (Migros Bank, Banque Migros) in 1957 and an insurance company, 1959.

Migros opened its first foreign supermarket in the frontier region of France, in Thoiry, in 1993, and its first recreation park, Säntispark, at Abtwil in St. Gallen, in 1986. In 1954 Migros entered the Turkish market, forming Migros Türk in partnership with the Istanbul City Council. This was sold to Turkish group Koç Holding in 1975 and is the largest retailer in Turkey.

Migros today

, ZG, Switzerland]] To this day, Migros keeps the cooperative society as its form of organization. Nowadays, a large part of the Swiss population are members of the Migros cooperative – around 2 million of Switzerland's total population of 7.2 million, thus making Migros a supermarket chain that is owned by its customers.

Reflecting the altruism of its founder, Migros operates a number of evening schools for working adults, featuring classes in cooking, languages and other subjects. It has obligated itself to spend one percent of its annual turnover for financing cultural projects in a broad sense; the sub-organization taking care of this is called Migros Kulturprozent ("cultural percent"). An example of the Kulturprozent's activity is its own record label Musiques Suisses often featuring little-known works from Swiss music history.

The supermarkets are categorized in the three size classes of M, MM and MMM.

Migros acquired some notoriety in 1977 when it fired its severest internal critic, Hans A. Pestalozzi.

M-Budget and Migros Sélection

. The M-Budget chocolate is just visible on the bottom shelf.]] In 1996, influenced by the budget ranges in supermarket chains in Australia, Migros made their budget range called M-Budget with 70 products aimed at those with low incomes and large families. Now it has grown to 330 products including mountain bikes, snowboards, mp3 players, milk chocolate, jeans, shoes and lighters. M-Budget products have a standardized packaging color scheme, consisting of a grass green background with the Migros logo in small white text repeated over it.

Many of these products are produced in limited quantities rather than as an integral, permanent part of the Migros line. Whether they become permanent depends on their success. This, combined with the considerable brand recognition that Migros enjoys, conveys a certain amount of desirability to the rarer products. As a result, M-Budget items will sometimes be considered collectibles, as it is not always sure that they will ever be produced again.

To promote the range, in the early 2000s, Migros developed M-Budget Party with tickets costing CHF 9,90 including free non-alcoholic drinks (cola, lemonade and orange juice) and snacks (crisps, chocolate and cakes).

In 2005, together with Swisscom, Migros launched M-Budget Mobile, a pay-as-you-go mobile phone company.

Also in 2005, Migros introduced a premium line called Migros Sélection, featuring for the most part food products typically associated with higher budgets and prepared in different fashions than is available through general stock. Sélection products also have their distinctive packaging, with pearl white and gold color schemes.

In April 2006, Migros announced the M-Budget credit card, an initiative between FCM, GE Money Bank and MasterCard, originally with an annual rate of CHF 4,40, which is low compared to credit card annual rates of CHF 100 for a MigrosBank MasterCard Argent credit card. The card was ready by the autumn 2006. After Coop, the biggest competitor of Migros, announced a credit card without any annual rate, Migros scrapped its annual charge. Migros later announced the full details of the credit card, it will have an APR of 9.9% and the ability to gain cumulus points (1 point per 2 francs).

The Migros ethic

Migros sells neither alcoholic beverages nor cigarettes in its flagship supermarkets, but some retailers acquired by Migros continue selling these products; this includes Globus, Migrol and Denner stores, as well as their online shopping service LeShop.ch. Migros does not sell racy magazines, either.

Companies

Swiss Migros:

Migros – supermarkets

LeShop.ch – an online supermarket (cooperation started in 2004 - 80% of shares bought in 2006)

Migrol – petrol stations

M-electronics – electronics retail stores and internet music download service

OBI – Do it yourself stores

FitnessPark – fitness centres

Do it+Garden Migros – Do it yourself stores and garden centres

Micasa – furniture stores

MigrosBank – bank (it is the fifth-largest in Switzerland)

Golfpark – public golf courses

Change Migros – currency exchange

Ex Libris – bookshops

Migros Klubschule – adult education centres

SportXX – sports shops

Eurocentres – language schools

Chocolat Frey – chocolate manufacture

Migros Magazin – the company's sales magazine

Hotelplan – holidays company

Florissimail – postal flower service

Monte Generoso Railway, railway owned by Migros

Globus Group (became part of Migros in 1997)

Interio – furniture stores

Globus – department stores

Globus Herren – menswear stores

Office World – office supplies (not the British Office Worlds, owned by Staples)

Globi – a cartoon character who is mascot of the Globus Group, often refers as Switzerland's Mickey Mouse.

Competitors

The main competitor is Coop, Switzerland's second-largest supermarket chain, a cooperative like Migros, but with a more centralized organization. Amongst the smaller competitors are the Manor department store chain, and more recently Aldi. Although Aldi is a very large international supermarket group, it entered the Swiss market only recently (Aldi opened its first Swiss shops in 2005) and thus operates just a few branches at the present time. However, it is expected that Aldi will become one of the major competitors of both Migros and Coop, as it managed to set established supermarket chains in other countries under heavy pressure through an aggressive discount strategy. A further competitor is Lidl which established its first Swiss supermarkets in March 2009.

In January 2007, Migros acquired a majority stake in Denner Discount, effectively merging the largest and third largest food retail chains in Switzerland. According to both companies, the move was effected in order for the Denner chain to better compete with increasing foreign competition.

Criticism

Some critics like Sorgim, a Swiss non-profit organization (its name is Migros backwards), claim that Migros has lost touch with its founder's ideals. They say that the cooperative is not governed democratically by its members as it was once envisioned by Duttweiler. It is argued that instead, through various amendments to the by-laws, it is now the executive board that decides over all major business matters and policies.

See also

References

External links

Migros Switzerland website, in German, French & Italian

*Migros Germany website, in German

Migros Sélection website, in German, French & Italian

Sorgim's website

Category:Companies of Switzerland Category:Cooperatives in Switzerland Category:Supermarkets of Switzerland