Swiss retailer Migros has shed 140 jobs as it struggles to cope with consumers crossing into neighbouring countries to shop because of the strength of the Swiss franc.
The Swiss franc has spiked in value because it is seen as a safe haven from the troubled euro, so shoppers are travelling to France, Italy and Germany to take advantage of cheaper goods, leaving domestic retailers struggling to compete. Certain products over the border in France, Italy and Germany are between 30% and 50% cheaper.
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Migros said today (31 October) it made the redundancies in the southern part of Switzerland as sales have dropped.
A spokesperson for the co-operative said: “The Swiss franc is so strong that lots of people go over the border into France, Italy and Germany to do their shopping and that is why stores in Switzerland have suffered.”
Migros has engaged in a extensive promotional activity but admitted that there is only so much they can do.
“There is not much more we can do at the moment as long as the franc is so strong. The government, the media and us are trying to convince people that it is better for the economy if our consumers to buy in Switzerland”, they added.
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By GlobalData“We hope people think about that as long as the franc is strong.”
Migros’ rival Coop estimates that the money spent in neighbouring countries has trebled from between CHF1-2bn (US$1.1bn) a year to nearly CHF3bn.
