BUSINESS ABROAD: The Swiss Family Migros

Gottlieb Duttweiler is a single-minded Swiss businessman who has spent the past 29 years working successfully toward one goal: bringing prices down. By steadily undercutting competitors, he has built an $85 million-a-year empire that started out with groceries and now includes taxi fleets, clothing stores, sewing machines and movies. In a nation of enterprising moneymakers, Duttweiler is the most enterprising of all. He is also unique in another way: years ago he gave away most of his wealth to his customers.

Duttweiler’s successful price-cutting has frequently brought trouble from his cartel-minded competitors. But “Dutti,” as he is fondly known to his customers, was never fazed by that. When manufacturers of standard brands refused to sell to his cut-rate “Migros” (like demigros, i.e., semi-wholesale) stores, he set up his own factories to turn out everything from soap to noodles. When newspapers turned down his ads, he started a paper of his own. When the government passed laws directed against him and his stores, he formed his own political party, was elected to the Swiss parliament by the biggest vote in history. Last week, to the consternation of the Swiss oil industry, Duttweiler started up a new business: retailing fuel oil. Result: prices immediately dropped more than 20%.

Ford Trucks & Flour. A bulking bear of a man, 66-year-old “Dutti” Duttweiler entered the business world 50 years ago as an apprentice in the Zurich wholesale grocery firm of Pfister and Sigg. Thirteen years later the company became Pfister & Duttweiler. But Dutti’s main career of cutting prices—and conventional corners —began in 1925. Just back from several years as a coffee-and sugar-plantation owner in Brazil, Duttweiler was shocked to discover that a planter netted less for his efforts in raising coffee than the grocer who merely handed it over the counter. To remedy that, Duttweiler invested his savings of $25,000 in five model T Ford trucks and a stock of rice, flour, sugar and other staples, sent the trucks through the streets of Zurich as traveling Migros stores. Dutti’s prices averaged 30% less than those of his competitors, and customers swarmed to buy.

As the rest of the Swiss food industry rose up in arms, Price-Cutter Duttweiler matched them blow for blow. When his business branched out to Basel, the trucks were seized and drivers arrested. Dutti fought back in the courts and won. When, a year later, more trucks were seized in Bern, he showered the city with leaflets from an airplane, got the housewives to back him. As he fought a virtual street-by-street battle into other Swiss cities and villages, competitors set up a national boycott. Manufacturers who sold to him lost other customers, shoppers who traded at Migros trucks were turned away by other stores. Duttweiler started his own plants, broadened his merchandise lines.

Sewing Machines & School. By 1941 Duttweiler had amassed a fortune of $4,000,000. With a characteristic disregard for the conventional, he decided he had little use for great wealth or good living. So he gave away his Migros stores to his family of 120,000 registered customers, one share apiece, turning the whole business into a cooperative. For himself, he kept $250,000. He also turned his estate outside Zurich into an amusement park, moved into a four-room house where he and his wife live without servants, and from which he drives to work in a mouse-sized Fiat two-seater. Duttweiler stayed on as president of the Migros cooperative at $9,000 a year, but three years ago gave up that salary, too.

Migros now has 289 grocery stores—145 of them self-service and ten of them fancy supermarkets—as well as nine butcher shops, three clothing stores, and 70 sales trucks that service rural areas. And Migros has revolutionized other fields as well. In the Depression Duttweiler signed up a number of Swiss hotels, many of them half empty or near bankruptcy, in a plan to provide cheap vacation tours. His Hotel Plan, which offered eight-day, all-expense holidays for as little as $45, caught on quickly, bailed the hotels out, and last year grossed $6,000,000. In 1951 the Migros cooperative organized “Minitax,” which runs a fleet of small blue taxis in Zurich, Lucerne, Lausanne and Geneva, charges fares 30% lower than usual rates. Last summer Migros bought the Turissia sewing-machine factory, cut prices about 13% and has since doubled output. Migros also provides evening schools for adults, runs a book club with 37,000 members, distributes long-playing records at discounts of 42% to 50%, publishes the Zurich daily Die Tat (circ. 35,000), has helped finance such Swiss movies as Marie-Louise, The Last Chance, Four in a Jeep and Heidi.

Because of his remarkable success at home, the governments of Turkey, Brazil and Puerto Rico have asked Duttweiler to help in bringing down their living costs, too. The Greek government invited him to be its guest this month to discuss the possibility of starting a Migros-like system for Greece. Duttweiler, who calls himself a revolutionary in business and a conservative in politics, has the same advice for all in beating down Communism. Says he: “There is no point in fighting Communism with speeches and pamphlets. You have to fight Communism in the kitchen.”