Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Migros Family Cooperative Built a Swiss Retail Empire
Transcript
- Lucas: In 1925, a Swiss man named Gottlieb Duttweiler loaded five old Ford trucks with coffee, rice, sugar, and pasta, and drove them into working-class neighborhoods around Zurich. He sold those goods at prices thirty to forty percent below the established grocers. He didn't own any warehouses, he didn't have a storefront, and most of his early customers were housewives who couldn't believe the prices. That was the birth of Migros. Luna: And today, Migros is the largest retailer in Switzerland. It does something like thirty billion Swiss francs in annual sales. It owns banks, insurance companies, hotels, a publishing house, even a chain of gas stations. All from five trucks. Lucas: Right. And what's wild is that Migros is technically not a family business in the usual sense. Duttweiler and his wife, Adele, controlled it for decades, but they deliberately structured it so that the business would never be owned by their heirs. They turned it into a cooperative—owned by its customers. Luna: So the 'family' here is more of a metaphor. It's the Duttweiler family's ethos and values that got embedded into the company's DNA, even after the family stepped back. Lucas: Exactly. And that ethos was remarkably consistent. Duttweiler believed that the purpose of a business was to serve the consumer, not to enrich shareholders. He famously said, 'We don't want to make profits, we want to make good products at fair prices.' And he meant it. Migros's profit margins have historically been razor-thin—often under one percent of sales. Luna: But the company is incredibly strong financially. How do you build a retail empire on one percent margins? Lucas: Volume and efficiency. Migros owns its own supply chain, but with a twist. Duttweiler hated vertical integration in the traditional sense—he didn't want to own farms or factories because he thought that would create conflicts of interest. Instead, Migros built its own brands, like M-Budget, and sourced directly from producers, cutting out middlemen. The company also reinvested almost every franc of profit into lowering prices or expanding services. For decades, Migros paid no dividends. None. Luna: And they used that cash to build things like the Migros Club Schools, which offer adult education courses, and the Migros Cultural Percentage, which dedicates one percent of annual sales to cultural projects. That's about three hundred million francs a year now. Lucas: The Cultural Percentage is one of the most remarkable corporate philanthropy programs anywhere. It funds everything from art exhibitions to language classes to sports programs. And it's not a PR stunt—it's written into the cooperative's bylaws. When Duttweiler introduced it in 1957, he said, 'A business that takes from society must give back to society.' Luna: But the early years were brutal. Duttweiler faced fierce opposition from the established retailers and from the cartels that controlled food distribution in Switzerland. They called him a communist, a price-dumper, an American-style capitalist. There were boycotts, smear campaigns, and even legal challenges. Lucas: One of the most dramatic episodes was the 'Coffee War' of the 1930s. The coffee cartel tried to cut off Migros's supply. Duttweiler responded by importing coffee directly from Brazil, bypassing the cartel entirely. He sold it at cost, just to prove a point. The cartel eventually backed down, but not before Migros had established itself as the champion of the consumer. Luna: And that david and goliath narrative helped build immense customer loyalty. By the 1940s, Migros had a million members—in a country of about four million people. Lucas: That's the key to the Migros story. The cooperative structure means that the customers are the owners. Every year, members vote on the board of directors. They share in any surplus, though it's usually reinvested. And they get a say in major strategic decisions. It's a form of democratic capitalism that's survived for a hundred years. Luna: But it hasn't been easy. In the 1990s and 2000s, discounters like Aldi and Lidl entered the Swiss market. They undercut Migros on price for basic items. Migros had to respond. Lucas: And they did. They accelerated the M-Budget line, which is a no-frills private label that competes directly with the discounters. They also invested heavily in fresh food and service, which the discounters couldn't match. Migros's advantage is that it owns the real estate—many of its stores are in prime locations that competitors can't access. And the cooperative's cost of capital is essentially zero, because it doesn't have to pay dividends to outside shareholders. Luna: So they could afford to wait out the discounters. And it worked. Aldi and Lidl have a combined market share in Switzerland of maybe ten percent. Migros still has around twenty-two percent. Lucas: And that's in a market that's notoriously expensive and competitive. The Swiss retail scene is one of the most concentrated in the world, with Migros and its main rival, Coop, controlling over sixty percent of grocery sales. Yet prices have actually fallen in real terms over the past decade, partly because of Migros's pricing discipline. Luna: But what about the family? Duttweiler had no children. He and Adele adopted a son, but he wasn't interested in the business. So how did the transition work? Lucas: That's the fascinating part. Duttweiler didn't want a family succession. He wanted the company to be owned by the people who made it successful—the customers. Starting in 1941, he transferred his shares into a cooperative structure. By the time he died in 1962, the cooperative owned everything. The Duttweiler family name lives on through the Gottlieb Duttweiler Institute, a think tank he founded, but the family has no ownership or control over Migros. Luna: That's incredibly rare. Most founders want to pass on the empire to their kids. Duttweiler actively prevented it. Lucas: He believed that inherited wealth and power lead to complacency and corruption. He once said, 'The worst thing that can happen to a good business is to fall into the hands of inheritors.' That's a pretty radical statement for a family business show. Luna: Yeah, well, it makes you think about what 'legacy' really means. Migros's legacy isn't a dynasty. It's a set of principles—low prices, quality, social responsibility—that have outlived the founder by over sixty years. Lucas: And it's still going strong. In 2025, Migros reported revenue of about thirty-two billion francs. It employs over one hundred thousand people. And last year, it invested over one billion francs in lowering prices and modernizing stores. Luna: That's the kind of long-term thinking that most companies only talk about. Migros actually does it. And it got me thinking: these deep-dive stories take a lot of research and editing to get right. If listeners find value in them, a couple of dollars a month is genuinely what keeps these going. You can support the show at buy me a coffee dot com slash fexingo. It makes a real difference. Lucas: Totally. And we're grateful to everyone who helps keep this ad-free and independent. So, back to Migros—one of the most interesting tests the company faces today is generational. As younger Swiss consumers become more globalized, they're drawn to brands like Whole Foods and Trader Joe's. Migros has to stay relevant. Luna: They've responded by launching organic lines like Bio-Familia and by opening stores that focus on local, artisanal products. They also have a strong online grocery operation, Migros Online, which grew fast during the pandemic. Lucas: And they're experimenting with smaller-format stores in city centers, because the traditional Migros hypermarket model is less suited to urban lifestyles. The cooperative structure gives them the flexibility to experiment because they're not under pressure from quarterly earnings. Luna: So the same structure that helped them survive the cartels and the discounters is now helping them adapt to e-commerce and changing consumer habits. Lucas: Exactly. Duttweiler's model was ahead of its time in many ways. He built a business that was resilient not because it was big, but because it was built on trust and shared ownership. That's a lesson that goes far beyond retail. Luna: And it raises a question for other family businesses: would you rather pass on control to your children, or to a set of principles that might outlast any individual? Lucas: That's the Migros question. And it doesn't have an easy answer. But the fact that a company can thrive for a century without a ruling family, without outside shareholders, and with a mission that puts social good ahead of profit—that's something worth studying. Luna: Absolutely. And on that note, next time we'll look at another family business that took a very different path. Thanks for listening.