“Orange giant” almost doubles profit

Migros performed better than Coop last year swissinfo.ch

The Migros group had one of its best years ever in 2004, despite market difficulties, with profit up 47 per cent at SFr545 million ($453 million).

The result confirms Migros as Switzerland’s number one retailer ahead of archrival Coop, which saw its profit last year fall by 6.2 per cent.

A national federation of regional cooperatives, Migros said on Wednesday that turnover had increased to more than SFr20 billion.

It added that it had increased its market share in Switzerland in the face of growing competition from discount retailers.

Migros – known affectionately as the “orange giant” – said it was pleased with the result, but kept its joy within bounds. Despite the 47 per cent jump in net income, the profit margin was up by only a modest 2.7 per cent.

“This result has been achieved through the clear strategies, target-setting and measures taken in the individual companies,” commented Anton Scherrer, the outgoing president of the general management – the equivalent of a company CEO.

“We have made progress in every area compared with the previous year.”

While the federation’s retail division recorded only slight growth last year in a saturated market, its leisure, travel and petroleum businesses all grew significantly.

The number of specialist shops – including M-Electronics – increased by 57 to 195, and the SportXX division opened four new branches.

Migros said it expected sales growth of two per cent in the current year and a result at least as good as that of 2004.

Co-op comparison

Unlike Migros, Switzerland’s second biggest retailer, Coop, had to contend with falling profit and turnover in 2004.

Coop, which reported its annual figures in March, described 2004 as a year of consolidation and restructuring.

The retailer said it had been able to convert savings reached through restructuring into price reductions and special offers for its customers.

Coop reported a 2004 profit of SFr320 million, down 6.2 per cent from the year before. Turnover was down 2.3 per cent at SFr14.9 billion.

To compete with Migros, and the threat from discount retailers in Switzerland, Coop has introduced a budget product line.

swissinfo with agencies

Key facts

2004 annual results of Switzerland’s two leading retailers:
Turnover: Migros SFr20.303 billion (+1,4%), Coop 14.9 billion (-2.3%).
Net profit: Migros SFr545 million (+47%), Coop SFr320 million (-6.2%).
Earnings before income and tax (EBIT): Migros SFr543 million (+12%), Coop SFr491 million (-7.5%).