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Switzerland's leading brand study proves it, says the local business magazine Bilanz. For Swiss consumers, Migros has an unbeatable brand image. And while rival retailer Coop may have modernised its own brand, it doesn't seem to have helped it much.

Res Zürcher, a loyal Migros customer, has trouble comprehending the figure, Bilanz says. 67 million Swiss francs? That's how much the newspaper says Migros, traditionally Switzerland's leading retailer, plans to spend during 2005 on its corporate redesign. "What's the point?", he asks in a letter to his local newspaper. "I simply can't understand why they are investing so much money when you can hardly see the difference".

When Migros decides to change its looks, the matter resounds far beyond the four walls of the company boardroom, Bilanz says. That's because the chain founded by Gottlieb Duttweiler has grown into a Swiss institution, and that includes its image. Migros is not just a power brand, Bilanz says, it is a piece of Swiss culture, a mirror of the country's society, employing over 80,000 staff - fully 2.5% of the Swiss workforce. 72% of households use a Migros store at least once a week, more than rivals Coop and Denner combined.

Coop is a perfect example of how difficult it is to shape up against Migros. In an attempt to do so, in 2001, the company completely overhauled its image, including the introduction of a new logo and new clothing for its employees, in an exercise which received much praise among professionals. Like Martin Hotz, of the marketing agency Fuhrer & Hotz, who tells Bilanz: "This brand relaunch, in such a short space of time, has few equals." Yet still the company trails.

At least Coop management can rest easy in having brought order to its branding policy. At Migros, on the other hand, a profusion of own labels abounds, most of them based on the letter 'M', but with little logic and lots of confusion, Bilanz says. Despite this, the retailer seems to have lost none of its power of attraction in the eyes of shoppers. Indeed, if one is to believe the results of the latest edition of ad agency Young & Rubicam's Brand Asset Valuator study, as yet unpublished, the gap between Migros and Coop has grown even wider.

Based on personal interviews with more than 1,500 consumers, the study, Bilanz says, offers a detailed insight into the soul of both brands. Coop, it seems, scores relatively high on criteria such as 'fashionable' and 'high quality', yet Migros scores better overall, enjoying the endorsement of consumers in terms of qualities such as 'authentic', 'brave', 'energetic', 'dynamic' and 'social' And while Migros' appeals to all levels of society and across the nation, Coop scores better among young males than among women and older shoppers.

The study appears to show that content counts for more than exterior appearance, Bilanz says. Migros may have a somewhat 'awkward' image, but consumers still shop there happily, interpreting that awkwardness as unaffected authenticity. In addition, one has to take into account that a slick image can awaken expectations which risk being unfulfilled by the actual experience of shopping, says Bilanz.

Coop spokesman Felix Wehrle, on the other hand, disputes that his company's brand image may have suffered. "Our representative surveys show that the value of the Coop brand has risen substantially", he tells Bilanz, citing additional criteria such as 'freshness' and 'dynamism' although not giving concrete figures.

Migros' image, however, is as institutional as it is multi-dimensional. Like no other brand, Migros stands for the development of Switzerland into a modern consumer society, something company head Anton Scherrer recognises. "The secret of the brand lies in the person of Gottlieb Duttweiler", he says. Scherrer sees it as one of his chief responsibilities to continue that heritage, even if Migros is determined to embark on a comprehensive image overhaul.

Duttweiler died in 1962, Bilanz says, when Scherrer was just 20 years old. Yet the culture established by the founder still runs throughout the company. A ban on sales of alcohol and tobacco still exists, for example, as does a commitment to spend a certain percentage of turnover on cultural and social initiatives.

Its own-brand strategy, too, is core to Migros' character. The policy of only stocking Migros-branded goods was originally introduced by Duttweiler in protest at the pricing conditions imposed by major manufacturers. Despite the fact that suppliers grew in strength over the years, Duttweiler stuck to his policy and only recently has migros opened up its shelves again to the likes of Kellogg's and Nestlé.

A successful own-label strategy has many advantages, not least in that it helps traditional retailers to stand up to the growing number of discount chains, Bilanz says. In Switzerland as in the UK, where Tesco has been so successful, the market share enjoyed by discounters remains at less than 10%. In Germany, on the other hand, where only 12% of grocery sales are of 'own label' products, discounters account for 38% of the market. That's why the Swiss Coop is now placing renewed emphasis on house brands such as Betty Bossi and Naturaplan, Bilanz says. And while Coop has an own-label share of sales of 56% compared to Migros' 10%, the two stores are growing ever more similar.

That also means that Migros and Coop are coming into direct competition more frequently. Recent examples have included a high-profile clash in the media over the respective quality of each others' fish fingers, Bilanz says. Then, later the same month, the newspaper Blick, basing its story on research from IHA-GfK, ran with the headline: "Official. Coop overtakes Migros", prompting a rebuttal from the latter, which released its own sales figures to show that the claim was untrue.

Nevertheless, says Bilanz, Migros cannot ignore the aggressive strategy of expansion currently in place at Coop, which has, for example, led to its share of food sales to rise from 20% to 23% over the past 3 years, while Migros' share has only risen by 0.2% to 24.4%. Then there's the price cutting drive of home-grown discounters such as Denner and Pick Pay, as well as competition from foreign retailers such as Carrefour, Aldi and Lidl. So far, Migros' reaction has been muted, Bilanz says, and, rather than panic, the company plans to maintain its resistance in its own style. Beat Mühlemann, who heads Migros' advertising activities, likens his task to that of a hairdresser: "We want to give the stores a new style, without people noticing at once that we've had our hair cut", he tells Bilanz.

Indeed, consumers will barely notice a difference in the project's early stages. Logos and signatures will be gradually phased in by the 10 regional Migros operations between now and the year 2010, meaning also that the quoted cost of 67 million Swiss francs will be spread over a number of years.

Thoe most visible change, Bilanz says, will be the new uniforms sported by the staff, due to be introduced throughout the chain in spring 2005 and replacing clothing that currently varies by region.

Elsewhere, Migros has extended its 'M-Budget' discount range from 160 to 200 articles and plans to double its revenues from the segment during 2004. Then there's the introduction of brands such as Kellogg’s, Red Bull and Nivea, bringing additional income of SFr. 300 million. Migros still has to resolve the proliferation of own brand names within its stores and is examining employing a simple, signature scheme like the one introduced by Coop, Bilanz says.

Despite the redesign, Migros is unlikely to have a 'one-size-fits-all' appearance, however. It's not what people want, says Bilanz, and in any case, they are much more converned with what is on the shelves than how the packaging looks.