Migros seeks greater efficiency

Related tags Supply chain management Business Shopping mall Migros

Migros, the Swiss co-operative food retail group, is to carry out a
review of head office functions with a view to cutting costs by up
to 15 per cent. The Swiss retail market has been hit by recession
this year, and cost reduction is being seen as an increasingly
important part of most supermarkets' day-to-day business.

The Fédération des coopératives Migros (FCM) groups together the 10 regional retail co-ops which trade under the Migros name, and it has begun to play a more important part in the running of the business in recent years, assuming a number of administrative functions which were previously carried out by the regional groups.

These functions include supply chain management, recruitment, purchasing and marketing, all major elements of the modern retail trade but which FCM was not originally set up to manage on such a large scale. As a result, the organisation has drafted in the McKinsey consultancy firm to help it improve efficiency and cut costs.

The aim of the review is to cut costs by 10-15 per cent in key areas such as infrastructure and personnel, while other potential cost reductions will also be highlighted in areas such as purchasing and marketing.

The company said that it expected the review of its operations to lead widespread changes in the organisation and working practices in a number of key areas, possibly leading to job losses. The company stressed, however, that it would work hard to find alternative positions for those employees affected by the review in a bid to keep redundancies to a minimum.

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