Market position expanded at home and abroad in 2009

The Migros Industry Group further expanded its market position, both in Switzerland and abroad, in a difficult market environment. Despite sharply falling sales prices, it achieved revenues of CHF 5.186 billion (previous year CHF 5.099 billion), which translated to a plus of 1.7 per cent. Domestic growth was generated with the Migros Group as well as with third parties in Switzerland. Revenues from the supply of the Migros channel increased by 2.0 per cent, with Denner, LeShop and filling station shops performing particularly well. Business with third parties in Switzerland increased by 2.5 per cent. This was primarily due to further expansion of the Catering business. Exports performed at previous year levels in local currency terms. Currency losses (€ and £) and reluctance to purchase premium products impacted on income considerably. Geographically, the main focus of international business was in the large European markets such as Germany, the UK and France.

Quality and innovation thanks to independence

The Industry business is a core element of Migros' differentiation strategy. Migros' Retailing benefits from independent, high quality, innovative and reasonably priced articles and product lines produced by the Group's own industrial companies Aproz Sources Minérales SA, Bischofszell Nahrungsmittel AG, Chocolat Frey AG, Delica AG, Dörig Käsehandel AG, Estavayer Lait S.A., Jowa AG, Mérat & Cie AG, Mibelle AG Cosmetics, Micarna SA, Midor AG, Mifa AG, Mifroma SA, Mifroma France SA, Riseria Taverne S.A. and Scana Lebensmittel AG.

Targeted market expansion

The focus of business expansion in the year under review was on extending activities in Catering, using potentials within the Group and in targeted further development of innovation and sales potential. The Group established its first own sales and marketing structures in North America in order to continue to push forward its well-running business activities there. To this end, Migros established M Industry USA Inc at the end of September and M Industry Canada in October.

The synergy potential within this business sector was the subject of targeted exploitation in the year under review. This included the optimisation of sales, innovation and investment processes as well as increased collaboration of Management beyond the individual business units.

Investment in production site Switzerland

In the year under review, around CHF 150 million was invested in growth and rationalisation projects within operations in Switzerland. Bischofszell Nahrungsmittel AG saw a platform for convenience produce go into operation. Elsa in Estavayer-le-Lac also saw the first stage of the ELSAvenir project completed on schedule. With this, the company is on track to become one of the most productive dairies in Europe. Jowa invested heavily in the expansion of store bakeries in order to be able to provide even more oven-fresh loaves before close of business.

Energy savings

Business expansion in the year under review focused on extending activities in Catering, exploiting potentials within the Group and in targeted further development of innovation and sales potential. The Group established its first own sales and marketing structures in North America in order to continue to push forward its well-running business activities there. To this end, Migros established M Industry USA Inc at the end of September and M Industry Canada in October.

Migros' industrial companies are also making great efforts in the field of energy saving. Together with other business units, they are cooperating with the Energy Agency for the Economy (EnAW) and are spending considerable sums on energy-savings measures. Last year, Micarna and Bina implemented heat-recovery projects and Chocolat Frey completed the ISO 14001 certification process with respect to its environmental management. MIFA has also developed energy-saving complete and colour laundry detergent for the “Total” brand, which, thanks to low dosage and when washing at low temperatures, reduces pollution by up to 53 per cent compared to other detergents.

Outlook: Targeted growth

The Migros Industry Group will continue to pursue a growth strategy on the basis of strong industry in Switzerland. Within Switzerland, strategic growth will rest on exploiting opportunities within the Migros Group and on expanding Catering activities. International business will be further developed with the aim of achieving CHF 700 million in revenue by 2012. The focus will be on strengthening marketing in key markets and on expanding product ranges.