Migros faces sales drop at border stores: CEO
The boss of Migros, Switzerland’s top retailer, says its stores near the European border will have to cut operating costs because of an expected drop in sales of five percent or more due to the strong Swiss franc.
Herbert Bolliger, CEO of the cooperative group, made the point in interviews with SonntagsZeitung and other media over the weekend.
Bolliger said Migros would have to adjust its workforce at its stores near the border, but he told 20 Minuten newspaper there would be no layoffs because of the currency problem.
“The hours of work (at such stores) have to be adjusted,” he said.
“This will be done by not replacing people who leave or by reducing work assignments.”
The franc rose by more than 20 percent after the Swiss National Bank last month abandoned a policy of maintaining a 1.20 floor against the euro.
The stronger franc has made cross-border shopping even more appealing to Swiss residents living near the borders of France, Germany, Austria and Italy.
Bolliger noted that the high franc is also good for Swiss consumers because the price of goods imported from the European Union are cheaper.
But revenue growth will be challenging for Migros subsidiaries such as Chocolat Frey and Mibelle (beauty products, personal care and nutrition) that are usually strong in exports, he told 20 Minuten.
The combination of these factors means that wages for Migros workers cannot be expected to go up as they have in the past, he indicated.
Migros, however, has a “very healthy financial foundation”, Bolliger added, touting various business divisions that are gaining market share, as well as the success of units in countries such as Germany and Austria.