Denner: The Strategic Challenge For A Swiss Retail Discounter

Denner AG is a leading food discount retailer in Switzerland. It has 591 of its own stores and 269 run as a franchise called Denner Partner; its revenues amount to about CHF 4 billion. Historically 25% of Denner’s revenue has come from alcohol and tobacco sales. Although Denner is positioned in a highly competitive market, the foundations are changing rapidly. Food retail discounters have developed over the last years, and customer expectations of performance have risen, especially since the market entry of Lidl and Aldi. Therefore, Denner is in an environment where it needs to adapt quickly and continually. Denner was acquired by Migros – the biggest food retailer in Switzerland – in 2010 with the clear goal of enriching the offer within the whole group. A second reason for the acquisition was that Migros is not allowed to sell alcohol and tobacco, in accordance with its bylaws. Since the Covid pandemic, retail and food trends seem to have changed for good. In addition, the prospect of Migros starting to sell alcohol is forcing Denner to rethink its current strategy. COO Urs Kneubühler is charged with advising and convincing the board of the best strategic direction to ensure future growth and revenues, while taking into account the opportunities and threats arising from new food and retail trends.