Switzerland's largest retailer Migros Group has booked a 22% drop in profit for 2011, as the strong Swiss franc and "consumer tourism" hit the group's results.

Migros said yesterday (28 March) that its profit fell CHF192m (US$212m) to CHF659m during 2011. Losses were seen across all of the company's businesses, with the exception of its banking unit, and were led by a CHF84m fall in profit at the group's food retail business. 

The company said its profits were hit by pricing initiatives it used in a bid to fight off the growing threat presented by the increase in "consumer tourism". Swiss consumers are increasingly travelling to neighbouring countries to do their shopping, propelled by the strength of the Swiss franc against the euro. 

Migros also revealed it had lost market share in Switzerland, where it has been squeezed by increased competition, particularly from German discounters like Lidl an Aldi. Migros' share of supermarket sales in Switzerland fell 0.6 percentage points to 26.7% in the period, the group revealed. 

Sales at the group's retail business were down 3.3% to CHF14.7bn, with Swiss sales dropping 3.4%. The company said it was able to maintain the position of its discount Denner banner, where sales were almost flat at CHF2.78bn. However Globus declined by 2% to CHF788.1m and Interio saw the biggest losses, with a 5.7% drop in revenue to CHF242.7m.

Meanwhile, sales from Migros' manufacturing arm M-Industrie, which includes dairy processor Elsa and chocolate manufacturer Chocolat Frey, increased 0.3% to CHF5.33bn.