340 branches in Germany
Tegut is cutting more than 100 jobs
15.11.2024Reading time: 1 Min.
Bad news for the grocer Tegut: The Swiss parent company Migros is taking the red pencil.
The grocer Tegut, based in Fulda, has to save money and cut jobs. A total of 120 full-time positions in central services would be cut and new operators would be sought for around ten percent of the branches, said the parent company, Cooperative Migros Zurich. In addition, managing director Thomas Gutberlet from the founding family will be leaving the company; he has been in the post since 2009. Tegut recently had around 340 branches in Germany, employing around 7,700 people there.
“Tegut has not been able to exploit the existing market potential in recent years,” Migros Zurich continued. “The company reports inadequate sales and profitability development.” Tegut’s sustainable positioning is currently having a difficult time.
“It is very regrettable that Tegut employees have to leave the company. It is very important to us that the reductions are implemented in the most socially responsible way possible,” said the managing director of the Migros Zurich cooperative, Patrik Pörtig.
With an above-average share of regional products and organic goods, Tegut was successful for many years in Hesse, southern Lower Saxony, Thuringia, Rhineland-Palatinate, Baden-Württemberg and Bavaria, but was then taken over by the Migros Zurich cooperative at the end of 2012. According to the announcement, Thomas Gutberlet has decided to leave the company. Sven Kispalko from the Zurich cooperative will take his place.
How can consumer sentiment influence the success of a retail company’s restructuring efforts?
Interview between Time.news Editor and Retail Industry Expert
Time.news Editor: Thank you for joining us today. We recently reported that the German grocer Tegut is cutting over 100 jobs as part of a restructuring effort initiated by its Swiss parent company, Migros. What do you think drove this decision?
Retail Industry Expert: Thank you for having me. The primary driver behind Tegut’s decision to cut jobs seems to be financial pressure from its parent company, Migros. Like many retailers, Tegut faces challenges such as increased competition, rising operational costs, and shifting consumer behaviors, which necessitate a reevaluation of its cost structure.
Time.news Editor: That’s a significant number—120 full-time positions are being eliminated. How do you think this will impact the company’s operations in Germany, particularly with their 340 branches?
Retail Industry Expert: The impact will likely be multifaceted. On one hand, cutting jobs may provide immediate financial relief, which could help stabilize Tegut’s operations. On the other hand, losing full-time staff can lead to increased workloads for remaining employees, potentially affecting customer service and operational efficiency. In the long term, if these cuts aren’t part of a larger strategic plan, we could see a decline in brand loyalty among consumers.
Time.news Editor: It’s interesting to hear you mention consumer behavior. How do you think consumer sentiment towards Tegut might evolve in light of these layoffs?
Retail Industry Expert: Consumers today are more conscious of corporate ethics and employee treatment than ever before. If customers perceive Tegut as prioritizing profits over its employees, it might damage the retailer’s reputation. Conversely, if Tegut communicates its plan effectively, emphasizing the need for these changes to enhance service and product value, it might mitigate any negative consumer reaction. Transparency is key.
Time.news Editor: With the competitive landscape in the retail sector continually evolving, what strategies do you think Tegut should consider moving forward to position itself better in the market?
Retail Industry Expert: Tegut could benefit from investing in technology to streamline operations and enhance the shopping experience. Revamping their digital presence and online grocery options could also attract more customers. Moreover, focusing on sustainability and local sourcing is a growing trend that could resonate well with consumers looking for ethical shopping options. Diversifying their product lines and offering exclusive products could also help set them apart from competitors.
Time.news Editor: Those are practical strategies. Given the closure of physical branches in the past few years in various chains, do you think Tegut may also need to consider this route?
Retail Industry Expert: Yes, branch optimization might be necessary. They should analyze their performance metrics and customer footfall in different locations. If certain branches are consistently underperforming, it may be more beneficial to close them rather than continue incurring losses. This would allow Tegut to concentrate resources on the more profitable locations and potentially reinvest in enhancing those stores.
Time.news Editor: Thank you for your insights. It sounds like Tegut has a tough road ahead, but with a strategic approach, they could navigate these challenges effectively.
Retail Industry Expert: Indeed, it’s a challenging time for many retailers, but by being agile and responsive to market demands, Tegut can find opportunities in this uncertain landscape. Thank you for having me.