Migros slashes prices as franc stays strong
Swiss supermarket retailer Migros announced it is cutting prices by 10 to 20 percent on more than 500 branded products as it takes steps to help mitigate the effects for consumers of a burgeoning Swiss franc.
Earlier this week, competitor Coop began removing 95 products from its stores after a number of suppliers refused to drop the prices of imported goods.
Migros, however, has instead decided to reduce the prices of more than 500 products by up to 20 percent from the beginning of next week. No products will be banned from its shelves.
The move is a response to calls from the government and consumers to lower the prices of imported goods, given the high value of the franc. Swiss supermarkets have been criticized for not passing on lower prices to consumers, Swissinfo reported.
Initial negotiations with suppliers were successful, Migros head, Herbert Bollinger, said on Tuesday.
“We will now achieve price cuts of between 10 and 20 percent“, Bollinger said in a press release. “Hard, but fair, negotiations with long-standing partners have yielded their first results.“
Migros negotiated price cuts for products that were removed by Coop for being overpriced, it said.
Cut-price products include goods from Nestlé (San Pelligrino water, Nestlé Baby), Ferrero (Kinder, Nutella), Beiersdorf (Nivea), Procter & Gamble, Unilever and L’Oréal (Studio Line), according to Migros.
Coop said it will decide in the coming days which further articles are to be removed from its shelves. The retailer spoke last week of ongoing negotiations with its suppliers, and smaller competitors are waiting for the planned delisting, but it remains to be seen how Coop will react to the Migros announcement.
The Swiss branded products association (Promarca) said it does not understand Coop’s actions.
“Of about 100 members surveyed by the association, most of them said they would pass their currency gains on,“ a spokeswoman told NZZ newspaper. “The retailers are using the strong franc to put pressure on their suppliers."
Supermarket chains Denner and Manor are not currently considering taking expensive products off the shelves.
Since the beginning of this year, Migros says it has reduced the prices of more than 4,000 products. A tax deduction of four percent on its entire range led to concessions valued at more than 300 million francs ($381 million), the retailer estimates.
Further talks are taking place with suppliers.