The end of Tegut has been contractually agreed, reports Neue Züricher Zeitung today as the first of many media. Owner Migros Zurich does not want to pump any more money into the loss-making German retail company. Last year alone, it had to write off 270 million Euros for Tegut, with the withdrawal costing a total of up to 600 million Euros, according to Swiss media reports.
According to information from the Lebensmittel Zeitung, most of the 298 sales outlets of the Fulda-based regional retailer will go to the Edeka regions Hessenring, Southwest, South Bavaria and North Bavaria. A smaller portion will be taken over by the Rewe Group. The antitrust authorities still have to give their approval. For Edeka Group, the takeover is at least an opportunity to increase its presence in the Rewe-dominated Rhine-Main area and Eastern Hesse.
The stores will be converted to the IT systems and processes of the new operators, and the Tegut brand will also disappear. Like Edeka Group currently does, Tegut works with GK at the checkouts and uses an SAP system for merchandise management.
Seamless price and quantity forecasting
In a showcase project, Tegut was one of the first companies to tackle price and inventory optimisation seamlessly out of the same forecasts, using Relex for quantities and Competera for prices. It will be interesting to see whether this promising approach will also appeal to Edeka, which has decided to use Relex instead of SAP for replenishment automation and optimisation.
The highly acclaimed mini-stores, which Tegut operated largely unmanned under the name Teo, will be transferred to Edeka headquarters along with their operating company Smart Retail Solutions. It is very likely that Edeka Group will further optimise and expand this format in order to be able to offer food in structurally weak areas throughout Germany and to operate 24-hour convenience stores where legally possible.
Teo franchise system enriches Edeka Group
There are now over 42 Teo stores in Germany, some of which are freestanding in the typical tiny house design, while others are located in existing properties. Migros has also brought Teo to Switzerland – as reported by The Retail Optimiser.
From the outset, Smart Retail Solutions’ goal was to operate the autonomous tiny stores with franchisees outside the Tegut world. Smart Retail Solutions moved away from its previous owner Tegut in the branding of its Teos some time ago: instead of Tegut orange, all Teos are now decorated in mint blue, which, however, clashes with Edeka’s blue.
