Grocery's Internationalization Challenge
- Marion Heil
- 20. März
- 4 Min. Lesezeit
Migros has just announced it will be withdrawing from the German market and selling Tegut. The Swiss cooperative has owned the Hessian supermarket chain since 2013, thirteen years of effort, restructuring, and mounting losses in one of the world's most competitive grocery markets. Edeka will absorb most of the roughly 300 stores; Rewe is taking up to 40 more. The Tegut brand will disappear. Nearly 7.400 employees are caught in the middle of a transaction that nobody wanted and everyone saw coming for a while.
It is a clean and recent illustration of what the market has seen time and again: the gap between what looks like a sensible international retail strategy on paper, and what actually happens in a market that doesn't bend to fit.
Grocery internationalization often is difficult
Walmart entered Germany in 1997. By 2006, it had left, selling its 85 stores to Metro at a reported loss of around one billion dollars. It is one of the more instructive case studies in international retail expansion, and it is not the only one.
Carrefour has exited more markets than most retailers have entered. Marks and Spencer's international grocery adventures have been, to put it diplomatically, a learning experience. And closer to home, several Central European grocery expansions that looked strategically compelling on paper have quietly been unwound over the past decade.
The German grocery market is structurally difficult...
Examples like this had been suggesting for some time: Germany is a market that resists outside operators in ways that are structural, not incidental.
The German grocery market is exceptional in European terms, and not in a comfortable way for new entrants. Discounters hold around 38 percent market share, the highest in Europe. Private label penetration continues to rise. Margins are among the thinnest on the continent. The Schwarz Group (Lidl and Kaufland) and Aldi between them have shaped consumer price expectations over decades in ways that are simply very difficult for a smaller or differently-positioned operator to absorb.
... so is the Austrian grocery market
The Austrian market offers its own version of this dynamic, worth noting for DACH-focused boards. The top four players (Spar, Rewe/Billa, Hofer, and Lidl) hold 92 percent of revenue, according to the latest NielsenIQ data for 2025/26. Discounters have grown their combined share to more than 25%. In that context, any new entrant or repositioning play faces essentially the same structural challenge as in Germany: a highly consolidated market with deeply embedded price expectations and very little tolerance for an unclear value proposition.
Why does internationalization so often go awry?
Tegut's specific problem was its positioning. It was a quality-focused, mid-sized Vollsortimenter trying to carve out a premium niche in a market that, as Migros confirmed in its own exit statement, "the specific positioning and comparatively small company size" made economically unviable in the long term. Even after cutting operational losses by more than half, the market dynamics kept deteriorating.
The strategic thesis, that a well-run quality supermarket could find its lane in Germany, was not obviously wrong. It just collided with a market structure that doesn't leave much room for middle positions.
Leadership is key...
What also strikes me about these cases, from an executive search perspective, is not the strategy. The strategy often makes sense, on paper, at the time. What strikes me is the leadership profile that needs to be deployed to execute it.
International retail mandates are routinely mispriced in terms of candidate profile. By mispriced, I mean that the skills genuinely needed to lead a cross-border retail expansion are different from the skills needed to run an established retail operation in a home market. And the two are often confused.
The skills genuinely needed to lead a cross-border retail expansion are different from the skills needed to run an established retail operation in a home market.
Running a mature grocery business in a country where your brand is established, your supplier relationships are decades old, and your real estate portfolio is locked in, is a scale management challenge. It requires excellent operators.
International expansion is something else: it requires people who can build from scratch in an unfamiliar regulatory, cultural, and competitive environment, while maintaining the discipline to know when the thesis is not working.
That second profile is genuinely rare. And it is not always found by simply taking a strong market MD and giving them a bigger geography.
... and so is culture
There is also a question of what actually travels across borders in food retail. The answer, in my experience, is less than you would assume. Private label know-how travels reasonably well. Operational efficiency methodologies travel, with adaptation. Brand equity, customer loyalty, and supplier terms very often do not. The executive who built a winning position in a home market by leveraging twenty years of embedded supplier relationships cannot recreate that in a new market in three years.
The cultures question is also underestimated. Not in the obvious sense of "German consumers don't like American-style stores," although that was very much part of the Walmart story. But in the organizational sense: the leadership style, decision-making norms, and people management expectations that work in one retail culture can be deeply counterproductive in another.
Needed: Specific search briefs
What does this mean in practice? When a board is considering an international retail mandate, whether an expansion into a new market or the leadership of an already-operating international business, the search brief needs to be significantly more specific than "strong retail background plus international exposure." It needs to identify candidates who have actually built and scaled something in an unfamiliar environment, not just overseen an existing operation from a regional headquarters.
These candidates exist. They are just not always the ones with the most familiar names on the shortlist.
Grocery has been teaching the sector expensive lessons about internationalization for thirty years. Tegut will not be the last chapter.
ABOUT THE AUTHOR
Marion Heil is the founder and managing director of Board+CEO Advisors, a Vienna-based executive search and board advisory boutique. She advises listed companies, family businesses and investors on C-suite, leaders and supervisory board appointments across DACH and CEE.
