Mié, Oct 26th 2022
Fabrice Zumbrunnen announced this week that he will step down in 2023 as the head of Migros, Switzerland’s largest retail company, supermarket chain, and employer.
“I’ve decided to start something new,” Zumbrunnen said late Tuesday adding that the recent years had been “demanding, but also exciting.”
The announcement comes as a surprise to many. The 52-year-old from Jura has been with Migros for 26 years – the last five of which he has served as president of Migros Cooperatives Group. His predecessor, Herbert Bolliger, served 13 years in the role.
Fabrice Zumbrunnen will leave Migros in March of 2023.
The Zumbrunnen effect
Although the big orange “M” has become synonymous with cooperative grocery stores around the country, Migros’s reach has been much further than just feeding Switzerland. The nearly CHF 29 billion company also owns Migros Bank, Hotelplan, Denner, LeShop, gas stations, electronics markets, fitness centers, Micasa furniture stores, golf courses, language schools, a railroad, a Zürich shopping mall, Galuxus online shop, dental centers, and more.
When Zumbrunnen took the position in 2018, the company’s profitability was declining rapidly as it lost out to its biggest competitor, Coop supermarkets. Zumbrunnen launched the “Fast Forward” efficiency program to streamline all services. But it apparently wasn’t enough to change the bottom line, so in 2019 Migros sold off its upscale department store chain Globus, Interio furniture stores, furniture brand Depot, and its e-bike service M-Way. In addition, Zumbrunnen cut 290 jobs at Migros’s headquarters, mostly in the marketing and IT departments.
Trimming the fat may have unknowingly prepared Migros for the Covid-19 pandemic. While service industries and transportation industries were hit hard, grocery stores boomed. The Swiss were forced to stay home to cook all their meals. Moreover, they could not cross into France and Germany as they often had to buy groceries at discounted prices. Migros’s business soared. In 2021, Migros raked in about CHF 670 million, 240 million of which went to Migros Bank.
A struggle between “new” and “old”
But the real acid test has been how can Migros remain profitable post-pandemic, and Zumbrunnen seemed to sense that as he strived for a new kind of Migros under his leadership. But the “old” Migros persisted.
To illustrate, Zumbrunnen opened the question of whether the historically alcohol-free cooperative would begin selling booze and profiting off lucrative alcohol sales. The issue was then opened up the public for months, but the heads of the ten cooperatives made the final call. In June, all 10 voted to remain dry as they have for the past 95 years. For all of Zumbrunnen’s efforts to transform Migros, his voice was still drowned out by the heads of the cooperatives.
According to early figures for 2022, Migros’ financials are declining again. Add in inflation and a European recession; and, the future of Migros does not look as rosy as it did in 2021.
“It’s a situation that we’ve never been confronted with before,” Zumbrunnen said in an interview earlier this year.
Mixed reviews
“As far as I know, all cooperatives are currently in the red,” a Migros insider told Zürich outlet Inside Paradeplatz. He added that Zumbrunnen “didn’t manage anything, not a single significant course setting – nada.”
When Zumbrunnen was elected to President, he squeaked by with a narrow majority. Perhaps it is because of his Swiss-French roots (he’s the only President to be from Switzerland’s Romandie area) or perhaps it is because of scandal that affected his home cooperative. While he was serving as the head of the relatively small regional cooperative of Neuchâtel-Fribourg, the cooperative was accused of rigging votes.
Meanwhile, the Board of Director President Ursula Nold, praised Zumbrunnen for streamlining the company, strengthening Migros’ profitability, and growing its online presence. Although Zumbrunnen’s plan to make its online retailer Galuxus a competitor of Amazon has fallen short, it has done well in the past two years.
“Migros is the undisputed market leader in Swiss retail and has been able to assert itself as number 1 both in stationary business and in online trade, as well as being the largest private employer in Switzerland,” Nold told local outlet NZZ.
What’s next?
Zumbrunnen’s possible successors are Jörg Blunschi, the head of Zürich Migros cooperative, Mario Irminger, the head of Denner, and a McKinsey rising star named Matthias Wunderlin, according to IP. Migros has always promoted from within when it comes to the President’s seat, so Blunschi appears to the be frontrunner. Whoever takes over Zumbrunnen’s position will likely be in for interesting start.
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