German supermarket chain Tegut is set to disappear as its parent company, Migros, abandons its efforts to restructure the business. The move will impact approximately 7,400 employees. A plan for the disposition of the stores is already in place.
Fulda/Zürich – The future of Tegut is in doubt as the supermarket chain faces complete closure. Migros, the Swiss retail company that owns Tegut, announced it will withdraw from the German market, effectively ending operations for the brand.
The decision, made in Zürich, follows a period of restructuring and cost-cutting measures. According to a report by Lebensmittelzeitung, Migros has opted for a “controlled exit” rather than continuing to invest in a struggling operation. Approximately 7,400 employees have been informed of the decision, and the Tegut brand is expected to be discontinued.
Tegut to Exit German Market as Parent Company Pulls the Plug
“Despite significant cost savings” last year, which more than halved Tegut’s losses, the market environment has deteriorated, leading to further revenue declines, Migros stated. An analysis concluded that Tegut is “not economically viable in the long term.” Migros is reportedly prepared to capture substantial write-downs as a result of the move, according to the Lebensmittelzeitung report.
The company’s objective was to preserve as many jobs as possible through a sale. Finding a buyer outside the existing German retail landscape proved unfeasible, leading Migros to approach competitors. A contract with Edeka has already been signed, Migros confirmed.
Edeka will acquire a “substantial portion” of Tegut’s nearly 300 stores, including a significant number of retail employees, the logistics center in Michelsrombach, the Herzberger Bakery, and Smart Retail Solutions, which operates the Teo locations in Germany.
According to Lebensmittelzeitung, approximately half of Tegut’s stores will be acquired by Edeka. Rewe is also expected to take over a high double-digit number of stores. The transactions are still subject to approval from the German Cartel Office. The Tegut’s works council has commented, stating that employees are “affected” by the news.
Tegut is not the only supermarket chain facing difficulties. Feneberg, a chain affiliated with the Edeka group, recently filed for insolvency. (Source: Migros statement, Lebensmittelzeitung)
